While Wall Street dances in an “everything rally” with stocks breaking record highs daily, gold glittering near $4,000 an ounce and Bitcoin (CRYPTO: BTC) soaring past $125,000, private equity stocks are the only ones not invited to the party, stumbling instead of soaring.

The S&P 500 topped 6,800 and the Nasdaq 100 surged past 25,000, up 14% and 20% year-to-date, yet private equity leaders like Blackstone Inc. (NYSE:BX), Apollo Global Management Inc. (NYSE:APO) and KKR & Co. Inc. (NYSE:KKR) have tumbled double digits in less than two weeks.

These aren't the kind of moves you'd expect when the Federal Reserve is cutting rates and signaling more to come.

So what gives?

Chart: Private Equity Giants Crumble, But Wall Street Barely Flinches

A Bankruptcy That Rattled The Private Equity Market

The shock came on Sept. 30, when U.S. auto parts supplier First Brands filed for bankruptcy, disclosing over $10 billion in liabilities.

In an interview with the Financial Times earlier this month, hedge fund manager ...