Momentum stocks see sharpest drop in two months, signaling a potential market shift.

Momentum stocks, which had surged rapidly, experienced a significant reversal on Thursday with the iShares USA Momentum Factor ETF (MTUM) dropping 1.8%, marking its worst daily performance since late March. This pullback follows warnings about the rapid price increases in momentum stocks, suggesting a correction phase may be underway. Investors should watch for further volatility as the market adjusts to these changes.