On October 10th, local time, the three major US stock indices plummeted, with the S&P 500 and Nasdaq Composite both experiencing their largest single-day declines since April. Large technology stocks fell across the board, with Nvidia's stock price plummeting 4.89%, wiping out $228.7 billion in market value overnight.
By the close of trading that day, the Dow Jones Industrial Average fell 878.82 points, or 1.90%, to 45,479.60; the S&P 500 fell 182.60 points, or 2.71%, to 6,552.51; and the Nasdaq Composite dropped 820.20 points, or 3.56%, to 22,204.43.
Semiconductor and cryptocurrency stocks led the declines, with the Philadelphia Semiconductor Index plummeting 6.32%. Circle fell over 11%, Arm over 9%, AMD, Qualcomm, and Coinbase over 7%, Micron Technology over 5%, ASML over 4%, and Intel over 3%. Bitcoin plummeted from $122,000 to a low of $101,500, a maximum drop of 17%. Over 1.62 million accounts globally were liquidated in the past 24 hours.
Large technology stocks also fell across the board. Nvidia closed at $183.16, down 4.89%. Tesla fell over 5%, Amazon fell about 5%, Meta dropped nearly 4%, Apple fell over 3%, Microsoft fell over 2%, and Google fell nearly 2%.
Among Chinese concept stocks, the Nasdaq China Golden Dragon Index fell 3.32%. NIO fell over 10%, Xpeng Motors fell over 8%, iQiyi fell over 7%, Baidu and Tencent Music fell over 6%, Li Auto and Alibaba fell over 5%, Futu Holdings fell over 4%, and JD.com fell over 3%.
The three major U.S. stock indices are core indicators of the overall performance of the U.S. stock market. The Dow Jones Industrial Average primarily covers traditional industries, consumer goods, and finance, and is often considered a barometer of the U.S. economy. The S&P 500 index encompasses 500 U.S.-listed companies across a variety of sectors, including technology, finance, healthcare, consumer goods, and energy, representing approximately 80% of the total market capitalization of the U.S. stock market. The Nasdaq focuses on technology and growth companies, encompassing sectors such as semiconductors, software, internet, and biotech (e.g., Nvidia, Tesla, and Amazon), with technology stocks accounting for over 60% of its index.
On the news front, the ongoing government shutdown has forced hundreds of thousands of federal employees to take unpaid leave, halting some public services, and delaying the release of key economic data (such as non-farm payrolls). Policy uncertainty has exacerbated market panic.
The U.S. Department of Labor announced on October 10th that due to the government shutdown, the Job Openings and Labor Turnover Survey (JOLTS) report, originally scheduled for October 4th, the Consumer Price Index (CPI) data on October 11th, the Producer Price Index (PPI) data on October 13th, and the September Employment Situation Report on October 6th will be postponed.
Furthermore, Federal Reserve Chairman Powell has recently issued warnings regarding overvaluation of the U.S. stock market. The U.S. stock market had previously experienced a prolonged rally, with the three major indexes repeatedly hitting new highs. Taking the S&P 500 index as an example, its forward price-to-earnings ratio is hovering near its highest level since 2021. The cyclically adjusted price-to-earnings ratio (CAPE), a key indicator of US stock valuations, had risen to its highest level since the end of 2021 as of the end of August. Looking at the revenue of its constituent companies, the S&P 500's current 12-month forward price-to-sales ratio is 3.12, the highest level since records began in January 2000.
JPMorgan Chase CEO Jamie Dimon recently stated that the risk of a sharp correction in the US stock market is significantly increasing within the next six to two years. He pointed out that "many uncertainties" are creating a highly volatile environment. Specific risks include geopolitical tensions, fiscal spending policies, and global militarization.
