[Voice of the Observer Network]
"It's a bolt from the blue..." Michael Brown, senior research strategist at Pepperstone Group, wailed to US media.
Everything should be thanked by Trump.On October 10, local time, the poor American president, the emotional threat to restart the tariff bar.But the tariff blackmail first scared the U.S. stock market "heart disease".
On the same day, U.S. stocks met the "Black Friday" again, suffered the worst sale in six months. U.S. stocks three major indices fell collectively, the index fell 878.82 points, falling 1.9%; the index fell 820.20 points, falling 3.56%; the S&P 500 index fell 182.60 points, falling 2.71%; the S&P 500 index recorded the largest single-day drop since April.
The market value of the seven largest tech giants of the United States evaporated overnight about $7700 billion, Tesla fell over 5%; Amazon fell 5%; Apple, Meta fell over 3%; Microsoft, Google fell over 2%; NVIDIA fell 4.89%.
Economic concerns dragged down copper prices and oil prices at the same time. Crude oil prices plummeted by more than 4%, and commodity prices from soybeans to wheat and cotton fell sharply. The Chicago Board Options Exchange Volatility Index (CBOE), regarded as Wall Street's "panic gauge", surged about 32% to its highest level since June.
According to the Wall Street Journal on the 11th, Trump's tariff threat also affects various types of trade-sensitive enterprises, including automotive manufacturers, clothing manufacturers, and even healthy cosmetics enterprises.
The report explained that these Wall Street professionals had previously believed that this year’s market ups and downs had been “immunized” to trade tensions, but from the current backlash scale, some investors worry that technology stocks are still vulnerable to political winds; while the sale of bank stocks more exposed to a potential concern: the current U.S. economy has weakened, and any trade friction re-emerging with its largest importing source could evolve into a recession.
Art Hogan, chief market strategist at Riley’s Wealth Management, said: “It’s not the first time since April that the market has suffered a breakdown, but this time it seems like a big deal enough to get the wheel off track.”
“This is clearly not the news traders want to hear!” wrote Steve Sosnick, chief strategist at Interactive Brokers, annoyed in a report, “We’ve been accustomed to the overall upward, relatively calm market situation, so the stock market’s rapid crashes are quite shocking.”
Nindex dropped 3.56 percent, the biggest single-day drop since April
According to Reuters, Sosnik also complained, "Obviously, Trump's remarks are of no benefit to the market. We managed to survive the worst stage of tariff concerns, but now we find ourselves facing a new round of storm, and his tone is too aggressive."
“This is definitely the wrong direction for the trade relationship between the two countries.Given the fast pace of market sales, this is definitely not a favorable market move,” he added.
The Wall Street Journal reported that in the past few months, the market has been resilient in the face of tariff threats from the White House. But now, investors with high returns and positions in highly valued stocks have to take a new look at the risks of a trade war seriously.
Michael O 'Rourke of Jonestrading, a large U.S. brokerage trading institution, added to Bloomberg, "Greed in the U.S. stock market far outweighed fear throughout the summer, and this high degree of complacency exposed investors to risks. This round of selling may turn into a larger correction, especially if the trade truce ends."
“Trump hit the market again in a rush and brought more questions,” Robert Pavlik, senior portfolio manager at Dakota Wealth, also noted that the market’s high optimism had been questioned by the “excessive valuation bubble” before Trump spoke.
The long-term rally has significantly pushed up corporate valuations, which continues to fuel investor concerns. Nowadays, the market is extremely sensitive to any disturbance and is particularly vulnerable to shocks.
Bloomberg also mentioned that since the market crash triggered by tariffs in April, the S&P 500 index has risen sharply with optimistic expectations for artificial intelligence and expectations for the Federal Reserve to cut interest rates. The index's valuation is now close to one of its highest levels in 25 years, which means that the market has little buffer left to deal with negative news.
Sam Stovall, chief investment strategist at CFRA Research, is already sweating profusely."The bull market will not end because of 'old age', it will only die because of' fear', and the biggest fear of a bull market is a recession."