Ares Management Plummets 2.9% Amid Market Turmoil: What’s Fueling This Selloff?

Summary
• Ares Management (ARES) reports Q2 EPS of $1.03, missing estimates by $0.06
• Revenue surges to $1.35B, outpacing forecasts by $310M
• Intraday range widens to $173.7–$181.49 as sector-wide fears amplify

Today’s 2.9% drop in ARES underscores a broader selloff in financials driven by a weak July jobs report and looming trade war fears. Despite stellar revenue growth and a $46.5B in new lending commitments, Ares’ shares are caught in a sector-wide downturn as investors price in aggressive Fed rate cuts and economic slowdown risks.

Broader Market Fears Overshadow Strong Earnings
The 2.9% decline in ARES is not a reflection of its fundamentals but a symptom of systemic market anxiety. A weak July jobs report (73K new jobs, 4.2% unemployment) and new tariffs on 92 countries have amplified fears of a global slowdown. These macro risks have pushed traders to price in an 80% probability of a September rate cut, a scenario that pressures bank margins and alternative asset managers. Ares’ high Dynamic PE of 672x and exposure to interest-sensitive credit strategies make it particularly vulnerable to rate-driven volatility.

Diversified Financials Reeling as Blackstone Slides 2.03%
The Diversified Financials sector is in freefall, with Blackstone (BX) down 2.03% and regional banks like Truist (TFC) falling 3.5%. Ares’ 2.9% drop aligns with sector trends, as investors rotate out of high-multiple plays amid rate uncertainty. Unlike traditional banks, Ares’ business model (fee-based AUM growth, $572B AUM) is less tied to net interest margins but remains sensitive to liquidity conditions and investor risk appetite.

Navigating the Volatility: Options and ETF Strategies for ARES
• 30D MA: 177.52 (above current price) • 200D MA: 169.00 (below) • RSI: 61.8 (neutral) • MACD: 4.03 (bullish divergence) • Bollinger Bands: 172.20–189.62 (current price at 180.16, near lower band)

With ARES trading near 30D support at 174.38 and 200D resistance at 167.75, short-term volatility remains elevated. The 52W range (110.63–200.49) suggests a bearish bias in the near term, but long-term fundamentals (24% AUM growth) remain intact. No leveraged ETF data is available, but options offer tactical entry points.

Top Option 1: ARES20250815P180
• Type: Put • Strike: 180 • Expiry: 2025-08-15 • IV: 34.94% • Leverage: 38.43% • Delta: -0.46 • Theta: -0.03 • Gamma: 0.03 • Turnover: 61,341
• IV at mid-range, moderate delta, high gamma for price sensitivity
• This contract offers a balance of leverage and responsiveness to price declines, ideal for a 5% bearish move (targeting $171.15). Payoff estimate: max(0, 180 - 171.15) 38.43% = ~$3.40 per contract.

Top Option 2: ARES20250919P180
• Type: Put • Strike: 180 • Expiry: 2025-09-19 • IV: 35.59% • Leverage: 20.41% • Delta: -0.45 • Theta: -0.05 • Gamma: 0.02 • Turnover: 885
• Slightly lower leverage but higher theta decay, suitable for a longer-term bearish play
• This contract’s lower turnover suggests it’s less liquid but offers extended exposure to a potential September rate cut-driven selloff. Payoff estimate: max(0, 180 - 171.15) 20.41% = ~$1.85 per contract.

Aggressive bears may consider ARES20250815P180 into a breakdown below $174.38 support.

Backtest Ares Management Stock Performance
The performance of ARES (iShares Core S&P 500 ETF) after an intraday plunge of -3% shows positive short-to-medium-term gains. The 3-Day win rate is 57.37%, the 10-Day win rate is 63.41%, and the 30-Day win rate is 73.36%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 9.04%, which occurred on day 59, suggesting that ARES has the potential for recovery and even exceed pre-plunge levels.

Ares at Crossroads: Watch 174.38 Support and Sector Leadership
The 2.9% drop in ARES reflects a mix of sector-wide macro risks and short-term technical fragility. While Q2 results (24% AUM growth, $46.5B new commitments) remain robust, the stock’s high PE and sensitivity to rate cuts demand caution. Key levels to watch: 174.38 (30D support) and 169.00 (200D MA). Sector leader Blackstone (BX) at -2.03% signals broader financial stress. A breakdown below 174.38 could trigger a retest of 52W low (110.63), while a rebound above 181.49 intraday high may reignite bullish momentum. Investors should prioritize short-term options like ARES20250815P180 and monitor Fed rate guidance and September earnings.