The Big Short: Regional Bank Edition… Larry’s Forecast: Cloudy With a Chance of Delusion

“Look how they massacred my boy.” -Don Corleone  -me when I opened up my brokerage account today

Hey Mom, remember when I said I wanted to time travel like that Carmen Sandiego game on Windows 99? I didn’t mean back to Trump’s Liberation Day. But here we are… tariffs in the air, markets twitching, and that same “something smells not great” vibe the guy behind me on a plane once said after I opened my beef jerky (true story).

Let’s get to the damages shall we? The Dow got shallacked (-0.6%), the S&P 500 played copycat (-0.6%), and the Nasdaq lost 0.7%... which is impressive, considering Nvidia was still out there doing its best Michael Jordan “and I took that personally” impression.

Speaking of chips, TSMC posted record profits (up nearly 40% last quarter) and hiked its 2025 revenue forecast again. Nvidia, Broadcom, and Micron all caught a quick hit off that. 

But it didn’t last. Even a trillion-dollar GPU supply chain can’t distract investors from the regional banks collapsing like a folding table at a Buffalo Bills tailgate. How bad was it? Well, Zions Bancorporation reported a $50 million hit from two bad commercial loans, while Western Alliance revealed one borrower “forgot” to provide collateral… which is essentially saying, “I bought the house… just not the house.”

And that’s all it took for their stocks to tank like they were auditioning for a reboot of The Big Short. Zions Bancorporation (-9%) and Western Alliance (-7%) went full Fannie Mae and Freddie Mac cosplay, dragging the rest of the financial sector down with them. Jefferies (-4%) tagged along for good measure, proudly living by the regional bank motto: “If they go, we all go.”

But wait, it gets worse. Trump reignited the US-China beef when asked if tensions were easing: “Well, you’re in one now.” Which, to be fair, is a gangster line to drop mid-interview… though it does make you wonder if he’s quietly holding a few too many put options.

Like usual, Treasury Secretary Scott Bessent tried to clean things up on aisle 4, hinting at a possible truce extension, but markets weren’t buying it. Investors have PTSD from the last tariff nightmare… they still flinch every time someone mentions “soybeans.”

Oh, and because this clown car needed one more passenger, the government’s still closed. We’re three weeks into the shutdown, and the Fed’s basically wandering through the woods without a flashlight, mumbling about inflation while tripping over roots. Wall Street’s basically trading off memes and astrology at this point.

Speaking of flying blind, United Airlines dropped nearly 8%, even after beating earnings estimates. Investors saw the report, said “cool story,” and dumped the stock anyway (talk about bad luck). 

Which brings us to our Stock Prophet Watchlist, because usually on a day like this, you’d expect crickets… but not today. VIVK (not the politician one) took off again this morning, marking a 90% long move from yesterday’s alert at 10:48 a.m., while KMRK gave us a solid 24% run before running out of gas. Sure, no triple-digit rockets like earlier this week, but as my mom used to say, “something’s better than nothing.”

As always, you can find the full watchlist on the Stocks.News app… and yes, it’s free. Sweet dreams, legends. See you bright and early tomorrow morning.

If you read all of this, congrats for having a 10 second attention span (better than me). As always, here’s our heatmap for today.

At the time of publishing this article, Stocks.News holds positions in United Airlines as mentioned in the article.