During the May Day holiday, the overall performance of U.S. stocks was relatively stable, especially when A shares were about to open. U.S. stocks rose sharply. No matter how you say it did not cause a sudden trend for A shares, this is still something to be thankful for. Yes, but everything changed too fast. Unexpectedly, the US stock market suffered a heavy blow last night. Whether it was , the Dow Jones Index, or the Nasdaq, all the previous big positive lines were swallowed up in one big negative line. The Dow Jones Industrial Average fell as much as 1,400 points during the session. In particular, the Nasdaq index fell as much as 6%. This decline is the largest since September 2020. Why did the US stock market suddenly experience a bloodbath? 
Compared with US stocks, the stock price elasticity of Nasdaq is much higher than Dow Jones . In terms of risk preference, Nasdaq is also stronger than the Dow. In this way, when encountering a crisis, the elasticity The best indexes usually have the biggest declines. Judging from the decline in the Nasdaq sectors last night, it was mainly information technology and consumer discretionary goods. These sectors that usually rise the sharpest suddenly fell sharply. In fact, I am somewhat worried about the market. Although the Federal Reserve calmed the market at its interest rate meeting and denied the previous statement that it would raise interest rates by 275 basis points, the market seems to believe that the rate hike will not exceed expectations if the rate hike is maintained at 50 basis points. A 50 basis point interest rate hike will still pose some threat to market liquidity under the cumulative effect. I think this is the main reason for the Nasdaq's plunge.
Of course, the emergence of moths is not caused by one thing. In addition to the market's liquidity concerns about continuous interest rate hikes, a statement by the former vice chairman of the Federal Reserve actually shocked the market. He felt that short-term interest rates need to be reduced to at least Only by raising it to 3.5% can the soaring inflation be controlled. In fact, this proposal is quite bold. It means that the Federal Reserve still has a lot of room to raise interest rates in the future. It does not seem to be a problem for the market liquidity for the time being, but it is really Raising interest rates by 3.5 basis points seems to cause economic turmoil. This is the same reason that some people have always said that they would raise interest rates by 75 basis points at a time. It is a bit beyond expectations. It has to be denied that these unexpected suggestions are all harmful to U.S. stocks. The sharp drop had a direct impact.
So all this boils down to The possible impact that the Fed's interest rate hike will have on liquidity and the US economy. In addition, the US stock market is currently at a relatively high level. If the market risk appetite becomes lower, it is normal for a bloodbath to occur. It can be said that Prompted by these factors, the U.S. stock market showed a clear downward trend last night. However, the Federal Reserve has always been very adaptable, and a sharp drop in one day does not mean much. Next, we will see how the Fed's wording changes and whether it will have any impact on U.S. stocks. These are the magic weapons for the long-term bull market in U.S. stocks. What impact does
have on A shares?
Every time there is a sharp drop in the US stock market, A-shares will be affected to some extent. We have become accustomed to following the decline rather than following the rise. However, judging from the impact of historical US stock market crashes on A-shares, in most cases there is actually no impact. Generally, there is a probability that A-shares will open lower, but they can usually move higher after opening lower. This means that the impact of the sharp drop in U.S. stocks is only short-lived, and this time is no exception.
From the perspective of A-shares themselves, sometimes there are also the effects of superimposed factors. For example, many market participants are controversial about the extent of yesterday’s rebound. On the one hand, they feel that the sector is scattered and the backbone cannot be seen. On the other hand, there is also a lack of volume and energy. It cannot keep up. This means that there is no unified consensus on the rise of A-shares itself. So even if the US stock market did not fall sharply last night, today's A-share shock seems inevitable. So coupled with the sharp drop in US stocks, it is estimated that today The market will fluctuate slightly during the opening period, so you have to be mentally prepared for this. However, I believe that the market will resume its upward trend after that. After all, policies for the smooth operation of the market are being gradually implemented, so the time span is long. You should still maintain confidence in your feet.
Disclaimer: The content in this article is for reference only and does not constitute any operational advice or tips. The stock market is risky, so please invest with caution!
