As the S&P 500 takes a hit of around 1%, risk sentiment has soured once again, following Monday’s brief recovery rally. Despite solid earnings from large cap banks, including JPMorgan Chase and others, driven by trading strength and a recovery in investment bank division fees, the broad-based selling pressure continues to weigh on the market.

The UBS Speculative Growth basket has lost ground once again, down by 2.1% on Tuesday, with factor rotations mirroring Monday’s moves. The notable exception is Rare Earth Minerals, which has gained 1.3% today, likely due to its close tie to the administration’s national security agenda and recent government stake acquisitions.

The Quantum, Rare Earths, and Uranium Miners baskets have experienced violent moves higher on Monday, but are now in the red on Tuesday. Momentum and Volatility baskets have also flipped negative, with AI and Speculative Growth retreating. Cyclicals are once again underperforming Defensives, with the latter losing 70 basis points.

It’s worth noting that JPMorgan Chase’s earnings were generally optimistic, driven by strong trading and a recovery in investment bank division fees amidst the busiest quarter for IPOs since 2021. However, this was insufficient to stem broader selling pressure against well-held longs today.

Overall, the latest developments in the US thematic basket movers suggest that risk sentiment remains a key driver of market movements, with factors such as government stake acquisitions and national security agendas playing a crucial role in shaping investor sentiment. As always, it’s important to stay informed and up-to-date on the latest market trends and developments to make informed investment decisions.