Fed Hikes, Nasdaq Wins: The Week Social Sentiment Got It Right

What a week to be chronically online and mildly obsessed with yield curves. The Federal Reserve raised rates by 25 basis points for the first time since 2023 on Wednesday, Fed Chair Kevin Warsh signaled multiple hikes ahead (inflation at 2% by 2029, per the SEP), and the Dow promptly dropped 631 points like it had somewhere better to be. By Friday, the Nasdaq was up 1.69% and the VIX had collapsed 12.82% to 15.44. Classic market behavior: full panic, then full amnesia.

The biggest social sentiment winner of the week wasn't a stock, it was a thesis. Crypto bulls who spent June through August getting mocked in comment sections were vindicated when $BTC crossed $80,000, up roughly 37% since June 30. The SEC's approval of digital securities trading was the accelerant, and sentiment on both YouTube and X lit up accordingly. $MSTR (Strategy, formerly MicroStrategy) led the Nasdaq 100 with a gain of over 16% on Friday alone. $COIN topped the S&P 500 at nearly 12%, and $HOOD added about 9%. The crypto-linked equity trade that seemed unhinged in July looks pretty sharp right now.

On the rate hike itself, social chatter split hard. Tom Lee of Fundstrat called the sell-off an overreaction in real time on CNBC, arguing 25 to 50 basis points won't topple the economy and recommending buying the dip in cyclicals and tech. Jeffrey Gundlach took the opposite temperature, saying he would have voted for 50 basis points and calling the actual decision a "stun and done" approach. The crowd leaned Lee by Friday, which was the right call given the tape. Meanwhile, Ed Yardeni cut his S&P 500 year-end target from 8,400 to 7,900 and raised his bearish outcome probability from 20% to 30%, citing oil-driven inflation spillover into core prices.

The week's most underrated story in sentiment data was $LMT (Lockheed Martin) and the defense complex, which barely registered noise despite a $24.3 billion F-35 deal with Saudi Arabia hitting the tape. With NATO allies pushing toward 5% of GDP in defense spending and Gulf foreign military sales totaling $44 billion, the defense sector is getting overlooked because everyone is watching oil and crypto. That's usually when you pay attention.

Speaking of oil: Saudi Aramco notified European customers they'll receive no crude next month after a Houthi attack on the kingdom's east-west pipeline. Saudi production sits closer to 7 million barrels per day against capacity of roughly 12 million. Container shipping rates are eyeing record highs, gas nationally sits near $4.47 to $4.50 per gallon, and 30-year mortgages ticked up to 7.19% to 7.2%. The Iran war's $38 billion tab is growing at an estimated $3 billion per month per the CBO. Markets shrugged all of it off on Friday, which is either a sign of remarkable resilience or the kind of complacency that shows up in the highlight reel of future bear market documentaries.

The crowd called the Friday rip, called the crypto surge, and mostly called the Fed overreaction. What nobody called was just how fast the Dow would forget losing 631 points in a single session. If that's not the most 2026 sentence ever written, nothing is.