After Wednesday’s momentum stock slide, Wall Street is racing to figure out if there’s a simple rotation at play or if the bull market is breaking down. The iShares MSCI USA Momentum Factor ETF (MTUM) slid 3.7% on Wednesday, marking its worst day since the tariff-induced market panic in early April. More than 1.8 million shares of the fund — which tracks stocks with strong recent price momentum — exchanged hands in the session, the highest volume going back to mid-November. Momentum stocks’ walloping was somewhat masked by strength in other areas of the market such as consumer staples and banks. The broad S & P 500 ended the session down just around 0.5%. MTUM .SPX 5D mountain MTUM vs. S & P 500, 5-day Now, the Street is scrambling to make sense of the pullback in momentum so investors can decide whether it’s a dip worth buying or a harbinger of a bigger problem. Bank of America’s sales desk called the momentum drawdown the second worst one-day move in the last decade. It sat only behind a day in November 2020, when the announcement of Covid vaccine efficacy spurred a rally. Similarly, JPMorgan’s data assets and alpha group listed Wednesday as the second largest one-day momentum move in more than two decades. Goldman Sachs said its high beta basket has seen high volatility relative to recent history. The bank’s desk said that momentum dips typically make for smart buying opportunities. However, it said that investors should hedge over the short term given there hasn’t been any capitulation signals yet and that the run until now has been strong. “There is no smoking gun” for Wednesday’s move, Goldman’s desk said. “It just happens that the market is chasing the strongest earnings revisions possible, and in the midst of that, short term performance technicals got too extreme.” At its worst point on Wednesday, momentum was showing extreme moves by a standard deviation that was seen during the global financial crisis and Covid, Barclays’ sales and trading team said. However, there’s not a clear signal about where the market could go next based on where the momentum settled. At least immediately, the trade could be in for more trouble. The iShares ETF fell 0.7% in premarket trading Thursday. Alphabet , one of the fund’s largest holdings, slid nearly 6% with its plans to grow capital expenditures appearing to miss the mark for investors. The Google parent’s slide didn’t signal that the broader, artificial intelligence-fueled momentum trade could catch a recovery bid. Microsoft , Meta and Nvidia , which also rank among the ETF’s biggest positions, all traded in the red.