Zhongxin Finance, May 6 (Reporter Xie Yiguan) In the past two days, the US stock market seemed to be on a "roller coaster". It had just experienced a strong rise the day before, and on May 5 local time, it began to fall rapidly, not only completely "swept away" "The day before yesterday's gains, the Dow and Nasdaq also recorded their biggest one-day declines since 2020.

U.S. stocks plummeted: Dow fell more than a thousand points, Nasdaq once fell more than 6%

  During the session on the 5th, the Dow, Nasdaq and S&P 500 fluctuated downwards. The Dow and S&P 500 once fell by more than 4%, and the Nasdaq once plummeted by more than 6%. The decline of the three major stock indexes narrowed in late trading, and as of the close , the Dow plummeted 1063.09 points, or 3.12%, to 32,997.97 points; the Nasdaq fell 647.17 points, or 4.99%, to 12,317.69 points; the S&P 500 fell 153.30 points, or 3.56%, to 4,146.87 points.

The three major U.S. stock indexes closed at the close.

  Large technology stocks fell sharply, Tesla fell 8.33%, Amazon fell 7.56%, Apple fell 5.57%, Google A fell 4.71%, Microsoft fell 4.36%, the five technology "giants" evaporated on the 5th The total market value of about 498.8 billion US dollars .

  After many Chinese concept stocks were included in the "pre-delisting list" by the United States, popular Chinese concept stocks also ushered in a general decline.

Among them, Dingdong Maicai fell by more than 21%, Weilai fell by more than 15%, Xiaopeng Motors and iQiyi fell by more than 13%, Pinduoduo fell by more than 11%, Bilibili and Huya fell by more than 10%, Ideal Auto , Shell fell by more than 8%, Alibaba fell by more than 6%, Jingdong fell by 6%, NetEase and Baidu fell by nearly 6%.

The Nasdaq China Golden Dragon Index fell more than 7%.

Stagflation and recession fears spark volatility in U.S. stocks

  Investors' worries about the economy falling into stagflation or even recession are considered to be the main reasons for the sharp turnaround in the U.S. stock market.

  The Wall Street Journal reported that U.S. stocks plummeted overnight, with some investors skeptical of the Federal Reserve’s rapid rate hikes, fearing that aggressive rate hikes could trigger a recession.

  On May 4, local time, the results of the Federal Reserve’s May meeting on interest rates were released, and they decided to raise the U.S. federal funds rate by 50 basis points to a level of 0.75% to 1%, which is the largest rate hike by the Federal Reserve since 2000.

Federal Reserve Chairman Jerome Powell.

Photo by China News Agency reporter Sha Hanting

  Bloomberg quoted analysts as saying that more and more investors are beginning to doubt that policymakers cannot control prices, and their fears that the economy is falling into stagflation have led to heightened market volatility.

In his speech on Wednesday, Federal Reserve interim chairman Powell ruled out the possibility of a single 75 basis point interest rate hike in the short term. After the market sentiment was appeased, U.S. stocks rose in a release, but when investors recovered, they found that the road ahead was difficult.

  Investor worries are also reflected in the Global Fear Index (VIX), which has surged more than 20% at press time.

At the same time, safe-haven assets such as U.S. Treasuries and the U.S. dollar are sought after.

  On the 5th local time, U.S. bond yields rose collectively. Among them, the 5-year U.S. bond yield rose 9.4 basis points to 3.014%; the 10-year U.S. bond yield rose 10.2 basis points to 3.043%, the highest since November 2018. A new high; the 30-year U.S. Treasury yield rose 8.5 basis points to 3.124%.

  "Cash is King" repeats itself, the dollar rises strongly.

In late New York trading, the U.S. dollar index rose 1.04 percent to 103.5715, the highest since December 2002.

How will US stocks go in the future?

  "As interest rates continue to rise, the relatively sensitive U.S. capital market will face more risks." Li Xunlei, chief economist at Zhongtai Securities, said that in the past decade, many U.S. listed companies borrowed money at very low interest rates to buy back themselves and write off the shares, thereby indirectly increasing the rate of return per share.

After continuing to raise interest rates, the actual controllers of these listed companies will not be able to continue to achieve low-cost arbitrage, which will bring more challenges to the US stock market.

Data map: A customer passes by an egg container in a supermarket in San Mateo County, California.

Photo by China News Agency reporter Liu Guanguan

  CICC believes that the sharp swing in market expectations over the past two days itself also shows that the market is still repeatedly tangled between worrying about the Fed’s actual acceleration of tightening and easing expectations and tightening faster than expected. Judgment of growth prospects.

  "The logic behind it is: if inflation and growth prospects are bleak and pessimistic, the existing tightening path is enough to hit valuations and earnings hard; and if inflation is expected to see an inflection point and growth prospects are relatively solid, then the market may be more pessimistic. In order to focus on the elimination of concerns about faster tightening in the future." CICC pointed out.

  David Wright, a big bear on Wall Street, even believes that the bear market in U.S. stocks has just begun. "The macroeconomic and geopolitical turmoil is worrying investors. No other country in the world will bet so much wealth on stocks. We are at the peak of complacency and the market is currently in the midst of the biggest bear market of its life, which has just begun, and there is a big wave to come.” (End)