When the Hype Fades, the Fundamentals Shine”

As Speculative Corners of the Market Tumble, Some Investors Are Cheering

By Putiton Newsroom | November 5, 2025

U.S. stocks slid sharply Tuesday, but it wasn’t the major indexes drawing the most attention — it was the unraveling of the market’s most speculative corners that had traders talking.

Riskier assets long favored by retail investors — from meme stocks and leveraged ETFs to cryptocurrencies and plays on lithium, rare-earth minerals and nuclear power — all tumbled as investors reassessed the path of interest rates.

The Roundhill Meme Stock ETF (MEME) plunged 6.7% to a record low of $7.64, according to Dow Jones Market Data, marking its weakest close since tracking began in 2021. The fund had only recently been rebooted, following the liquidation of a similar product two years ago at the height of meme-stock mania.

Meanwhile, Bitcoin briefly dropped below $100,000 for the first time since June, extending its slide to nearly 20% from its record highs.

“I am delighted by what’s happening,” said Andrew Slimmon, head of the applied equity advisors team at Morgan Stanley Investment Management.
“What is being brought down are the things that were too speculative in nature.”

Slimmon noted that the pullback is hitting precisely the sectors that soared after Federal Reserve Chair Jerome Powell hinted at possible rate cuts during his late-August speech in Jackson Hole. “Money-losing tech stocks, rare-earth miners, and leveraged tech funds really took off after Powell’s comments,” he said.

Now, as investors adjust to the Fed’s firmer tone — with Powell recently emphasizing that another rate cut in December is “far from a foregone conclusion” — the speculative trade is rapidly losing steam.

“If rates stay higher, it takes the sizzle out of those stocks,” Slimmon said. “And that’s good long-term for the market.”

For disciplined investors, the cooling of speculative fever may be a sign of returning balance. As Slimmon put it, “This is what late-cycle bull markets look like — the froth burns off before fundamentals reassert themselves.”