NEW YORK: Wall Street just spent the week ricocheting between the macro and the mania.
Investors digested mixed inflation data, positive developments in the Middle East conflict and sharp moves in oil prices.
At the same time, a scramble for SpaceX exposure spilled far beyond the company’s stock sale, as investors sought alternative ways to participate in one of the most anticipated public debuts in years.
The result was a market struggling to settle on a single narrative, with investors lurching between macroeconomic developments and speculative trades.
By one measure, the Nasdaq 100 this week posted its largest average intraday swings since April 2025.
SpaceX became the week’s flashpoint. Retail investors submitted more than US$100bil in orders for the offering, overwhelming allocations available through brokerages. But unlike past initial public offering (IPO) frenzies, demand did not stop at the traditional order book.
Investors unable to secure shares have been looking for exposure elsewhere. That helped drive big pre-IPO inflows into funds including the US$2bil Baron First Principles Exchange Traded Fund (ETF), while fuelling activity across a growing network of alternative trading venues.
Polymarket has generated more than US$25mil of volume across SpaceX-related contracts.
The activity also spilled into crypto- native markets, with investors trading perpetual futures linked to the company on the decentralised platform Hyperliquid.
What once would have been a straightforward IPO story increasingly played out across multiple trading venues simultaneously.
“That we are seeing a proliferation in ETFs that tie to crowd-favourite stocks speaks to moment,” said Peter Atwater, the president of advisory firm Financial Insyghts.
“The crowd is now speculating on its own manic impulsiveness with the most potency it can find.”
More than 20 SpaceX-linked ETFs have already been filed, ranging from leveraged and inverse products to options-based strategies.
A leveraged ETF tied to SpaceX surged more than 80% before grinding to a halt last Friday, according to data compiled by Bloomberg and information posted on the Cboe exchange’s website, citing regulatory concern.
ETF issuers that once waited months after an IPO to launch related products are now racing to file almost immediately, underscoring the speed with which Wall Street moves to package speculative demand.
“There is room for speculating for sure, but I would rather investors invest,” said Nancy Tengler, chief executive officer at Laffer Tengler Investments, who has a long-term conviction in the company.
The products used to express speculative views are becoming large enough to influence trading in the broader market.
Strategists at Nomura estimate leveraged ETFs more broadly now generate roughly US$8bil of rebalancing demand for every 1% move in the market, while options positioning contributes billions more.
Barclays Plc recently estimated that similar flows tied to major US leveraged ETFs reached a record ahead of the sell-off earlier this month.
Such products do not determine market direction, but they can amplify prevailing trends, turning bursts of enthusiasm, or anxiety, into larger swings.
“The speculative ecosystem also argues for bigger swings around related names, because when exposure is built through leveraged products, rallies and reversals can both move faster than investors expect,” said a strategist. — Bloomberg
