Spotting Parabolic Moves: Warsh Fed Update & SpaceX IPO

A hot corner of the market just went parabolic, and in this update, we show you how to spot these moves and why they matter for your money. Semiconductor and memory chip stocks like Micron have rocketed higher on AI demand, with Micron running from $100 to $1,200 in just over a year. We walk through what "parabolic" actually means, compare it to past manias in silver, Bitcoin, and 1990s tech stocks, and explain why moves like this often end badly for the people who chase them at the top.

We also check in on the highly anticipated SpaceX IPO, analyzing its recent 30% pullback through the lens of historical first-year IPO drawdowns to demonstrate why caution is required with high-valuation listings.

Next, we look at newly appointed Fed Chair Kevin Warsh's first policy meeting, shifting oil prices, and the U.S. Dollar reaching a one-year high. Finally, we look at the resilient health of the U.S. consumer and a surge in small business applications.

https://www.youtube.com/watch?v=nbco4Jgqk4E

Video Recap

Prefer to read instead of watch? Here's the full breakdown

A parabolic move is a price that goes vertical, and that is the warning sign

A parabolic move is when a price stops climbing steadily and goes nearly straight up, driven by emotion rather than fundamentals. A healthy uptrend looks like a staircase: higher over time, with normal pullbacks along the way. A parabolic move looks like a rocket, a vertical blow-off where buyers pile in for fear of missing out. We pay close attention to these because the steeper the climb, the harder the fall tends to be on the other side.

Semiconductor stocks just went parabolic, and the chart echoes past manias

The charts look a lot like past manias. The semiconductor index just posted a 246% rolling 14-month return, essentially matching its dot-com-era peak of 234% in 1999 and 2000. The clearest example is Micron, the leader in memory chips, the components that give AI its ability to think. Micron climbed from about $100 to roughly $1,200 in just over a year, with most of that move coming in the last few months. That is a near 12x run, and that is what parabolic looks like.

Silver, Bitcoin, and 1990s tech show how these moves often end

Each one fell hard. Silver went vertical in January, and we called it a mania in a post on January 29; it dropped 40% the following week and is now down about 50% from its late-January peak. The Nasdaq went straight up into early 2000 and then fell nearly 80% over the next two years, a period Will lived through firsthand starting his career in 1998. Bitcoin went parabolic twice in 2021, then fell almost 80% from top to bottom, with most other coins falling much further. The pattern is consistent: the vertical move feels unstoppable right up until it isn't.

SpaceX has already given back almost all of its post-IPO gains

SpaceX has given back almost all of its early gains. It priced at $135 with demand so strong that five shares were requested for every one available, opened in the $150 to $175 range, and ran to a peak of $225. As of June 23 it sits at $148, an over 30% slide in about a week and a half. None of this surprised us. SpaceX came public at a roughly $1.75 trillion valuation, trading near 90 times last year's sales, and companies that list at nosebleed valuations have often sold off more than 40% somewhere in their first year. That does not mean SpaceX is a bad business; it means the entry point and the volatility demand real caution.

Fed Chair Warsh held rates steady in his first meeting

Six to nine months ago, almost everyone expected the new Fed chair to be cutting rates. Instead, Warsh left them unchanged at an effective 3.63%. Two things stood out. The Summary of Economic Projections now shows a 3.8% fed funds rate at the end of 2026, up from 3.4% in March, which prices in a possible hike rather than the cut that was expected. And Warsh said he is re-evaluating whether those projections are even useful, forming committees to review how the Fed measures inflation and communicates with the public.

Oil and the dollar are quietly telling the inflation story

Two charts that do not make headlines tell you a lot about where inflation is heading. Oil traded in the high $50s before the Middle East conflict, spent months bouncing between roughly $85 and $110, and in just the last few days dropped to $73 a barrel, its lowest level in three months. That move suggests the market believes the conflict is winding down. Meanwhile the dollar just hit a one-year high near 101, directly contradicting a year of headlines predicting its decline. Foreign holdings of U.S. Treasuries are at a record above $9 trillion, so the story that everyone is fleeing U.S. assets has not matched the data.

New business applications hit a record high, with AI as the driver

Applications for new businesses just hit an all-time high, and AI is the biggest reason. The sharpest growth is among solo entrepreneurs who are not planning to hire at the start. When you line up business-application growth against AI adoption rates, the relationship is clear: the higher the AI adoption, the faster the formation. Early reports suggest these AI-enabled founders are reaching $100,000 and even $1 million in revenue faster than founders did three to five years ago.

The U.S. consumer is still healthy, with room to spend

The U.S. consumer still has room to spare. Household debt-service payments are about 11.3% of disposable income, which outside of the last couple of years is the lowest reading since 1980 and well below the nearly 16% peak before the 2008 financial crisis. That means consumers still have capacity to borrow and spend. And they are spending: the Redbook index, a near real-time read on retail sales, just hit 10% year-over-year growth, its best week of the year and well above the typical 5% to 6%.

Key takeaways

• The semiconductor index just posted a 246% rolling 14-month return, nearly matching its 234% dot-com peak, with Micron running from about $100 to roughly $1,200 in just over a year.

• Past parabolic moves in silver, the 1990s Nasdaq, and Bitcoin all ended in declines of roughly 50% to 80%.

• SpaceX has fallen about 33% from its $225 peak to $148, after pricing at $135 at a roughly $1.75 trillion valuation.

• The average tech IPO has seen a 55% drawdown in its first year of trading.

• Fed Chair Warsh held rates at 3.63%; the Fed's own projection for end-2026 rose to 3.8% from 3.4% in March.

• Oil fell to $73 a barrel, a three-month low, while the dollar hit a one-year high near $101.

• Household debt service sits near 11.3% of disposable income, close to the lowest since 1980, and Redbook retail sales growth hit 10% year-over-year.

Have questions about how this affects your portfolio?

Big market moves and shifting Fed policy can be hard to read in real time, and that is exactly the kind of perspective we bring to every Sentara Capital client relationship. If you'd like to talk through what these trends mean for your specific situation, we'd welcome the conversation.

Contact Us at (770) 509-5305 to Begin Your Journey

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FAQ: Spotting Parabolic Moves

If certain chip stocks are soaring, why would that be a reason for concern?

Because near-vertical "parabolic" moves have historically been followed by steep declines. Silver fell about 50% from its January peak, the Nasdaq dropped nearly 80% after 2000, and Bitcoin fell almost 80% after 2021. A steady uptrend is healthy; a price that goes straight up with plenty of fanfare should give you pause.

What should I do if I already own a stock that has gone parabolic?

The honest answer is that it depends on your goals, your timeline, and how large the position has grown relative to everything else you own. A common pitfall is letting one runaway winner quietly become an oversized share of a portfolio. This is exactly the kind of position-sizing and risk question worth walking through with an advisor rather than deciding in the heat of the move.

Is the U.S. dollar really in long-term decline?

The recent data says otherwise. The dollar just hit a one-year high near $101, and foreign holdings of U.S. Treasuries are at a record above $9 trillion. The widely repeated story that foreign investors are fleeing U.S. assets has not matched what the numbers actually show.

What should investors watch for the rest of 2026?

Watch whether the semiconductor surge cools off or keeps climbing, what Warsh's new Fed committees recommend, and whether falling oil prices open the door to rate cuts later in the year. The direction of the Middle East conflict remains the swing factor for oil, inflation, and rates.

Have a question we didn't cover? Call us at (770) 509-5305.

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Click for Full Transcript

In today's market update, we are going to check in with what looks like a parabolic move in progress in a white-hot segment of the stock market. What is a parabolic move? We're going to answer that. Also, the SpaceX IPO has happened. They've been trading for a couple of weeks now, and we're going to check in and see how that's going. And lastly, applications for new businesses just hit a new all-time high in the U.S. What's the biggest reason for that? We've got that covered and more. Let's dive into it.

Before we get into our update, just a thank you. We have crossed over 5,000 subscriptions for the channel, and we appreciate you helping us get there. Our next goal is 10,000, and we're on the way. Thanks again.

So the lead for today is we may have a parabolic move in progress in a key segment of the stock market, and we're talking about the semiconductor chip segment. What we're talking about here is that AI needs a lot of the fast-moving chips from Nvidia, but it also needs chips from just about everyone else. What we've found as AI has advanced is that memory chips, which used to be very cyclical, are needed because they give AI the ability to think. Over the last six to nine months, these stocks have gone up in a way that recently has turned parabolic.

The way to think about parabolic is this: normally, if you have a stock or part of the market that's steadily going up in kind of a stair-step, that's really what you want to see. But sometimes it goes up and rocket-ships its way higher. That's when it gets to be a bit of a concern. We have some charts here to show some parabolic moves over the last 20 years, but let's start by looking at the semiconductor index.

This owns all the chip makers that you know of, Nvidia and Intel, Broadcom, and a lot of other equipment makers. This is a 14-month total return going back into the mid-90s. You'll notice that the top stands out in two places. Back during the dot-com bubble, when that burst, this was up 234% in that 14-month period. That's back when Intel was at the very top, the largest company in the U.S. and leading the pack. Then for the next 20 to 25 years, there were some periods that this went up 100% or so over 14 months. But in the last period of time, it is a 246% return, and one of the leaders is a company called Micron, the leader in the memory chip industry.

This is Micron's chart over the last 10 years. It was slow and steadily heading higher with some sell-offs in between, but notice that late in 2025 it went from about $100 to $400, an incredible move. Then in the last couple of months it has gone from $400 to $1,200. So this is almost a 12x return over the last 12 months. This is parabolic, and we get concerned when we see these kinds of moves.

Let's show you why. We're going to start off looking at something completely different from stocks, and that is silver. This is a chart of silver for the last 10 years. From mid-2025 until early January this year, silver was going up consistently, and then in January it went straight up, a rocket ship. In fact, we did a post, a video on January 29th, where we said this is a mania and we are very concerned with this parabolic move. Silver went down 40% in the next week, and as we film this on June 23rd, silver is now down 50% from where it was in late January. You can see there a parabolic move up, and it has been a hard fall for people who put a lot of money in at the top.

Next up on parabolic moves, one of the definitions of it, is tech stocks in the late 90s. I started my career in 1998 at Merrill Lynch, so I saw this up close. Tech stocks were kind of slow and steady from the early 90s to about 1998, and then they went straight up in late 98 and early 2000 until they peaked, and then we saw a nearly 80% decline in the Nasdaq. Here's the thing that made this so painful. In 99 and early 2000, I was doing cold calls for Merrill Lynch, and when I was calling people, it didn't matter their age. If I was talking about dividend-paying stocks or blue chips, nobody had interest. Everyone wanted tech. In 1999, two out of every three dollars that went into mutual funds went into tech funds. Those people had a tough lesson with the Nasdaq dropping nearly 80% over the next couple of years.

The last parabolic move is a different kind of asset class. We're talking Bitcoin, specifically in 2019, 2020, and then it peaked and went parabolic in 2021, twice. You can see the chart there: late 2020 and early 2021 this thing went up, up, and away. It had a more than 50% decline later in 21 and then went right back to a new all-time high. At that time, we were getting call after call from people saying, is Bitcoin a good buy? What about Ethereum? What about Dogecoin? I kid you not, it was any kind of crypto. We did several blog posts saying this is a mania. And then, from top to bottom over the next year and a half, Bitcoin dropped almost 80%. All the other coins dropped much more than that.

The point here is that when you see a chart, you want something to go up, yes. But when you see those kinds of parabolic moves, the rocket ships higher, that is cause for concern, because oftentimes on the other side it is a bloodbath.

In the summer of 2026, any market update has to have a SpaceX update. That has been the hottest story. In our last video, right before the IPO, we talked about how the hype and excitement for SpaceX were unparalleled. We had not seen anything this anticipated in our nearly 30 years in the industry. SpaceX came public at an IPO price of $135. There were five shares requested for every one share that was actually going to be traded, so no matter what platform you were on, it was very hard to get shares at the IPO price. When it went public, the first day it bounced around between $150 and $175, then over the next few days went up to a peak of $225. We figured there was going to be major demand for it. But look at what has happened over the last week and a half: it has steadily started to decline. This morning, on June 23rd, it hit $148, giving up almost all the gains it had accrued. That's an over 30% sell-off in about a week and a half.

Again, not a surprise. We talked about companies that came public with nosebleed valuations, which is what SpaceX did at $1.75 trillion, trading at 90 times last year's sales. Those companies often had sell-offs of more than 40% somewhere in that first year. This is 33% in the first couple of weeks. This doesn't mean SpaceX won't be a great stock to own over the next 5 or 10 years; it very well might. But we knew early on this was going to be very volatile and you had to be very careful.

The companion chart we want to go over is just so interesting to us. SpaceX is the latest IPO to come with a lot of fanfare. It's the most fanfare we've seen, but there have been others with a lot of anticipation. On this screen you'll recognize a lot of these names: Facebook and Twitter, Shopify, MongoDB, Pinterest, Zoom, CrowdStrike, DoorDash, Airbnb, Roblox, Coinbase, Robinhood, Rivian, and more. This chart looks at the first year these companies traded after coming public, all within the last 10 to 15 years. The column on the far right is the maximum drawdown in the first year, from top to bottom. Look at the massive sell-off that almost every one of these names had in that first year. On average, at the bottom, you can see a 55% decline.

Now, a lot of these names took a bloodbath in that first year, but some of these companies bounced back and were some of the best stocks of the last 10 to 15 years. Facebook is the best example of that. CrowdStrike is a great example. But there are some, like Rivian, Affirm, Pinterest, and Snap, that have had a much harder time. Rivian hit almost $170 one week in and it's around $10 now. So you have to be very careful with these IPOs. That's the big takeaway.

It's a lot more fun talking about SpaceX and parabolic moves than the Federal Reserve and interest rates, but it's important, so we're covering it here today. Last week, Kevin Warsh, the new Fed chair who took over for Jerome Powell, had his first Fed meeting and press conference, and we learned some key things. The most important headline was that interest rates didn't change. If you go back six to nine months, almost everyone thought the new Fed chair would be cutting interest rates, but the conflict in the Middle East meant that longer-term rates went higher and inflation went higher, with commodity prices up. As a result, rates were not cut. They were kept flat. This is the effective rate, an overnight rate of 3.63%, within a range of 3.5% to 3.75%.

A couple of interesting things came from this meeting. The first is the Summary of Economic Projections. This is where each member of the Fed puts in their projection of economic growth, inflation, and where they see interest rates at the end of 2026 and 2027. What was notable is that in March this came in at 3.4% for the fed funds rate at the end of 2026, which would have meant a cut to get there. Now it is 3.8%. So not only no cut, that prices in a rate hike by the end of the year. But Kevin Warsh said in the press conference that he is re-evaluating whether these projections are even helpful. He is putting together committees to look at how they measure inflation and whether they should be doing the Summary of Economic Projections, plus three other committees. It's probably good to re-examine what they're doing. He also talked about how, in the past, every member of the Fed was quick to give interviews and speeches about where they thought rates should be, and he suggested that may be too much information, that less may be more. They're going to take a look at everything, and we'll see what comes out of these committees.

The next thing I want to talk about, which ties into this, is oil prices. Oil going up to over $100 a barrel and staying between $90 and $100 for a lot of the last couple of months, while the conflict in the Middle East raged on, is one of the big reasons rates weren't cut. But take a look at what has just happened in the last few days. Oil was trading around the high $50s prior to the conflict, then spent a couple of months bouncing between about $85 and $110. In the last couple of days, oil has gone down a lot, to $73 a barrel, the lowest level by far over the last three months. This is the market saying it believes the conflict is almost over, that the strait is going to be open and left open. We will see if that comes to fruition or if it's hopeful thinking, but it's interesting to see such a move lower in oil.

The last chart in this segment is the dollar. We talked about how, last year in 2025, everywhere you turned, financial media were talking about the dollar's decline and how it was going to keep going down. We also heard that foreign investors were fleeing U.S. assets and selling treasuries. We talked in our last video about how foreign investors' holdings of U.S. Treasuries are at an all-time high, over $9 trillion. So it was not the case that they were fleeing treasuries. Take a look at what the dollar has done: it has had a big move up since early May to 101. This measures the dollar versus the euro at about 50%, plus the Japanese yen and a few other currencies. The dollar just hit a one-year high at 101. This is lower than where the dollar was, around 110 to 115, about a year before, but what's notable is that it goes against what so many people said, that the dollar was just going to keep going down. It's at a one-year high. That's notable.

One thing we have wanted to see over the last couple of years is an increase in small business activity, and we've gotten our wish in applications for new businesses. What we're looking at is a four-month moving average going back to about 2005. In light purple at the bottom are people who are likely to add employees when they file their application. That has stayed very steady for about 15 years, and then when COVID hit it went up and stayed up at a solid clip over the last five years. We'd like to see that move a little higher in the future. But in dark purple, we're talking about new businesses where it's a solo entrepreneur not planning, at least at the start, to hire new workers. This has exploded higher since COVID, and we've had another leg higher in the last year.

What's the reason for this? We have a chart that explains it well. This looks at the growth in new business applications on the left, and along the bottom, the rate of AI adoption when someone files their application and is asked whether they plan on using AI as part of their business. What we've found is that on the far right, at that 40% rate of AI adoption, you see the biggest rate of change in applications. Let me simplify it: individuals who are using AI are starting businesses at a much faster clip than those who are not. Time will tell how these businesses end up doing, but the early reports are that these people are getting to $100,000 in revenue and a million dollars in revenue faster than people who started businesses three, four, or five years ago. Very interesting. We'll be keeping a close eye on it.

Our last segment takes a look at the U.S. consumer, which is very important for the health of the economy. The consumer has carried things a lot over the last 15 years. We're looking at a chart of individuals' after-tax income and what percentage is going to pay debt like a mortgage and car loan. This looks back to 1980. You can see this peaked right before the financial crisis, when Americans binged on debt, and that did not end well. The percentage peaked close to 16%, then went down and bottomed early in COVID. A lot of people got money from the government and paid down debt, and others still had jobs but weren't doing much, so they paid down debt some more. It's been steadily moving higher since, but I want to note that at around 11.5% now, this is, outside of the last couple of years, still the lowest percentage since 1980. This means the consumer still has room to take on more debt and do things like buy a house or a car. We like to see that they still have some room, and it also allows them to go and spend money.

And the Redbook index, which we check in on frequently, is a near real-time look at retail sales growth year-over-year. We get this every week. The reason I'm showing it is that it hit 10% last week, its best week of the year. For a long time this was around 5%, 5.5%, or 6%, which is a really good number. 10% is incredible. Yes, higher gasoline is a little bit of this, but more of it is spending on everything else, including Walmart, Costco, Amazon, and those kinds of expenditures. We like to see consumers still out spending. 10% growth, you can't beat this.

So the key takeaways are: do we have a parabolic move taking place in the semiconductor stocks? There are a lot of similarities in the chart to what we've seen from past parabolic moves like silver, Bitcoin, and tech stocks. And with the Fed, Kevin Warsh just wrapped his first meeting, keeping rates the same. It will be very interesting to see what his committees come back with as the year progresses.

If you are new to Sentara, you can go to our website. We focus on retirement planning and investing. If you have an advisor who's not doing one or the other very well, reach out to us. You can talk to a person. We'd love to hear from you. Thanks for watching. Take care.