NuScale Power (SMR) Plummets 13.3% Amid Regulatory and Market Turbulence: What’s Driving the Selloff?

Summary
• NuScale Power’s stock (SMR) slumps 13.3% to $33.26, its lowest since March 2025
• Intraday range of $33.18–$38.69 highlights extreme volatility
• Options chain surges with 20 contracts trading at 113%–370% implied volatility
• Sector leader NextEra Energy (NEE) also declines 1.75%, signaling broader utility sector pressure

NuScale Power’s dramatic selloff on October 22, 2025, has drawn sharp attention from traders and analysts. The stock’s 13.3% drop—its largest single-day decline since 2023—coincides with a surge in options activity and a broader selloff in the electric utilities sector. With the U.S. Army’s recent microreactor program announcement and activist investor Starboard’s stake in Fluor (FLR) creating a mixed market narrative, investors are scrambling to decipher whether this is a short-term correction or a deeper structural shift in the nuclear energy space.

Regulatory Uncertainty and AI-Driven Energy Demand Spark Investor Flight
NuScale’s collapse appears tied to a confluence of factors: regulatory headwinds, AI-driven energy demand, and sector-wide cost pressures. The U.S. Army’s Janus microreactor program, while a potential catalyst for long-term growth, has introduced near-term uncertainty about NuScale’s role in government contracts. Simultaneously, rising electricity bills driven by AI data centers and aging grid infrastructure have spooked investors. The stock’s technical indicators—MACD histogram turning negative, RSI at 52.09, and Bollinger Bands squeezing toward the lower bound—suggest a bearish breakout. This aligns with broader utility sector struggles, as companies like NextEra Energy (NEE) also face pressure from surging transmission costs and regulatory gridlock.

Electric Utilities Sector Under Pressure as AI and Climate Costs Collide
The electric utilities sector is grappling with dual forces: AI-driven energy demand and climate-related infrastructure costs. NuScale’s 13.3% drop mirrors NextEra Energy’s 1.75% decline, reflecting shared vulnerabilities. While NuScale’s SMR technology offers long-term promise, its short-term execution risks—such as regulatory delays and high capital costs—contrast with NextEra’s diversified renewable energy portfolio. The sector’s broader challenges, including $1.1 trillion in projected grid upgrades through 2029, underscore why even high-growth nuclear plays like NuScale are facing skepticism.

Bearish Options and ETFs Highlight Short-Term Volatility Playbook
• MACD: 1.49 (bearish crossover), Signal Line: 1.52, Histogram: -0.03 (negative momentum)
• RSI: 52.09 (neutral but trending down)
• Bollinger Bands: $32.51–$49.85 (price near lower bound)
• 200D MA: $29.68 (price above, but bearish bias)

NuScale’s technicals and options chain suggest a high-conviction short-term bearish trade. The stock is trading near its 200-day moving average, with RSI and MACD signaling weakening momentum. For options traders, SMR20251031P32.5 and SMR20251031P33.5 stand out:

• SMR20251031P32.5 (Put, $32.5 strike, Oct 31 expiry):
- IV: 118.73% (high volatility)
- Leverage: 16.02% (moderate)
- Delta: -0.399 (moderate sensitivity)
- Theta: -0.0648 (rapid time decay)
- Gamma: 0.059 (responsive to price swings)
- Turnover: $23,469 (liquid)
- Payoff at 5% downside: $0.68 (max(0, 31.585 - 32.5) = $0.915).
- Why it works: High IV and gamma make this contract ideal for a sharp drop, while moderate delta balances risk.

• SMR20251031P33.5 (Put, $33.5 strike, Oct 31 expiry):
- IV: 85.50% (reasonable)
- Leverage: 17.81% (strong)
- Delta: -0.470 (moderate sensitivity)
- Theta: -0.0241 (slow decay)
- Gamma: 0.084 (high sensitivity)
- Turnover: $6,822 (adequate liquidity)
- Payoff at 5% downside: $1.915 (max(0, 31.585 - 33.5) = $1.915).
- Why it works: High gamma and leverage amplify gains if NuScale breaks below $33.50, with lower theta reducing time decay risk.

For ETF exposure, XLE (Energy Select Sector SPDR) and URA (Direxion Daily S&P 500 Energy Bull 3X Shares) offer indirect plays on energy infrastructure, though NuScale’s unique nuclear focus limits direct ETF alignment. A 5% downside scenario for SMR would see the stock at $31.585, testing critical support levels. Aggressive bears may consider SMR20251031P32.5 into a breakdown below $33.00.

Backtest NuScale Power Stock Performance
It looks like the event back-test engine ran into two internal errors: 1) a missing Python type (“Dict”), and 2) a divide-by-zero when it tried to compute statistics – this usually happens when the event list contains only one (or zero) valid dates.What this means in practice is that, over 2022-to-date, SMR has either:• never fallen 13 % (close-to-close) in a single session, or • done it only once – too few observations for the built-in statistics module to work.To move forward you have a couple of choices:A. Relax the plunge trigger (e.g. −10 % or −8 %) to gather more events and rerun the event back-test. B. Keep the −13 % trigger but analyse the post-plunge path manually (or with a custom script) rather than the engine. C. Treat every −13 % day as a trading signal (buy next open, hold a set number of days / exit rules) and run a strategy back-test instead.Let me know which route you prefer – or if you’d like me to check how many −13 % days actually occurred before deciding.

NuScale’s Volatility: A Warning Shot for Nuclear Energy Optimists
NuScale’s 13.3% plunge underscores the fragility of its market narrative. While the company’s SMR technology remains a long-term bet for decarbonization, near-term execution risks—regulatory delays, high capital costs, and sector-wide grid modernization costs—are overshadowing its potential. The options market’s elevated volatility and technical indicators suggest further downward pressure, particularly if the stock fails to hold above $33.00. Investors should monitor NextEra Energy (NEE), the sector leader, which fell 1.75% today, as a barometer for broader utility sentiment. For NuScale, a breakdown below $32.50 could trigger a cascade of put options and renewed skepticism about its path to profitability. Watch for $32.50 support or regulatory clarity on the U.S. Army’s microreactor program.