Qianjiang Evening News·Hourly News Reporter Liu Xianxin
After the US stock market plummeted last Friday, the US stock market collapsed again on Monday!
During the session on Monday, the market reported that the Federal Reserve may approve a 75 basis point interest rate hike at this week's meeting. The news heightened fears about inflation, with the three major stock indexes extending their losses.
At the close of the market, the Dow Jones Index fell 2.79% to 30516.74 points; the Nasdaq Index fell 4.68% to 10809.23 points; the S&P 500 Index fell 3.88% to 3749.63 points.
Nasdaq index trend chart
Dow Jones index trend chart
S&P index trend chart
Statistics show that the current Dow Jones index is down about 17% from its historical high, and the Nasdaq index is down more than 33% from its historical high. The S&P 500 Index fell more than 21% from its historical high, and also entered a technical bear market after the Nasdaq Index.
The fear index "VIX" rose 22.59% on Monday, indicating that investors are selling risky assets aggressively. Inflation data hit a 40-year high on Friday, with U.S. investors expecting the Federal Reserve to raise interest rates by 50 basis points later this week. However, the latest news is that the Federal Reserve may approve a 75 basis point interest rate hike at this week's meeting, exceeding market expectations and igniting panic in the market.
Chinese concept stocks also fell sharply on Monday, with the Nasdaq Golden Dragon Index falling 6.73%.
Among the popular Chinese concept stocks, TAL fell 13.83%, Weilai fell 11.85%, Alibaba fell 10.31%, Pinduoduo fell 9.24%, Baidu fell 7.69%, Xpeng Motors fell 7.21%, Jingdong fell 4.19%, and Li Auto fell 2.94%, Tencent Music fell 2.51%; New Oriental rose 5.49%.
Well-known companies with large declines in US stocks
Nasdaq 100 component stock decline list
Chinese concept stock decline list
European stocks also fell across the board on Monday. Among them, the German DAX index fell by 2.43%, the French CAC40 index fell by 2.67%, and the British Rich List fell by 2.43%. The 100 Index fell 1.53%.
Song Xuetao, chief macroeconomic analyst at Tianfeng Securities, said that investors in the A-share market can be less anxious about the U.S. inflation data in May. Because four of these data are expected price increases (air tickets, accommodation, energy and food), which together account for the majority. Unexpected price increases are mainly related to automobiles. China’s Yangtze River Delta has fully resumed work and production. Price increases caused by supply impacts are only temporary.
Tianfeng Securities’ buyer’s point of view is that although the main factors that troubled the market in the early stage still exist, such as geopolitics, overseas interest rate hikes, inflation, epidemic and other risks, recently there have been continuous implementation of stabilizing growth policies and the marginal relief of the impact of the epidemic. Therefore, the stage of greatest downward pressure on the economy may be passing. On the other hand, the continued sporadic outbreaks of the epidemic in some areas still have an impact on market sentiment, but the rebound pattern is still there, and the growth value is relatively balanced.
Huatai Securities believes that as U.S. inflation continues to hit new highs and as U.S. economic growth slows, U.S. stocks may face greater uncertainty. The U.S. stock market has accumulated huge gains since 2008 under the environment of loose money and low interest rates. However, historical rules show that the U.S. stock market will generally experience a large decline after 2-3 Kitchin cycles. In this round, the U.S. stock market has been declining in all three cycles. , the year-on-year series has fallen into the negative range. However, as of the end of 2021, the U.S. federal government debt is nearly US$30 trillion, inflation data in May continued to hit a nearly 40-year high, and interest rates have been declining for a long time since the 1980s and are currently at extremely low levels. This means that the Federal Reserve and the U.S. government have extremely limited room for monetary and fiscal policy, and it is difficult to adopt operations such as easing monetary policy and lowering interest rates to support U.S. stocks similar to those used during the 2008 subprime mortgage crisis. U.S. stocks continue to plummet and there are no signs of stabilization. There is still great uncertainty in the market outlook. We should be careful to guard against the risk of further decline.
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