Dow tumbles 1,000 points, S&P 500 posts worst day since 2022 in global market sell-off: Live updates
www.cnbc.com
The U.S. stock market fell under pressure amid a broad global equity market sell-off. The losses come after the Nasdaq Composite fell into correction on Friday.

The main points:

  • Apparently, the direct cause was Japan raising its interest rates. Apparently investors globally used to borrow yen (which had low interest rates) and then invest elsewhere, turning a quick profit on the difference between the yen's interest rate and the return of the investment. When the yen's interest rate went up, a bunch of investors started selling off their yen assets, which carried over to the US market.

  • The issue was exacerbated by recent reports of US economic shrinkage.

  • Most stocks and all major indexes have dropped significantly

  • Tech companies particularly affected. Especially Nvidia, Apple and Tesla. Also, US-based and Taiwan-based chip manufacturers.

  • Cryptos are crashing, as investors are liquidating assets

  • Japanese and Korean stock markets were also severely affected directly, with similar downwards spirals.

  • European markets started getting affected as well.

I have no idea about the yen actually being the culprit to this. I'd say it's probably a contributing factor or a catalyst. But we've been seeing the US tech companies faltering for some time now, after the US initiated a trade war with China. Chinese tech companies have been making huge strides in the past year alone, while Western tech companies remained stagnant or regressed.

My interpretation, at least as far as the fire-sale involving US tech companies, is that they've been losing ground to China for some time, and they've been underperforming in the stock market for a while (recall that Nvidia's stock has been dropping for the past 2 weeks or so). Whatever arbitrary event caused Wall Street investors to start dumping their stocks, the recent poor performance of American tech companies made them a prime target for unloading stocks first. In essence, the US tried to start a tech and trade war with China and ended up shooting its own foot. Meanwhile, China yet again proven to be taking the right actions.

Worth noting, that there's talks that the US Federal Reserve could have taken actions to prevent this crash being so severe, but they didn't. The Fed says there's still time to act and there's nothing to worry about, without elaborating further.

This is entirely my own speculation, but it's quite possible that a crash was expected and was allowed to unfold to blow up in Trump's face when elected. It just happened a few months earlier than expected.

Edit: I'm not an economist, and I'm not involved in finances, so if anyone would like to correct me on anything, feel free. Also, apologies for using CNBC, but it was the only place I found that listed the events neatly, without dressing them up (and with minimal intrusion of Cookies notifications)

    • KrasnaiaZvezda@lemmygrad.ml
      ·
      3 months ago

      AI is great. Even if the tech stagnated for a few years a lot of improvements could still happen to what is available now and toghether with proper implementation of what's available could lead to quite a few good to amazing things. Too bad capitalism is trying to move its progress　towards what is bad for workers.

      Death to capitalism and let's do what we can to see the US balkanize as soon as possible.

      • CCCP Enjoyer@lemmygrad.ml
        ·
        3 months ago

        The present "AI" trend is yet another planet incinerating scam predicated and entirely reliant on the continued theft of human creativity for the sole benefit of capital.

      • knightly [none/use any]
        ·
        3 months ago

        Large language models suck. The tech is stagnant because there's no new training data or tweak to the model that could possibly resolve the structural issues.

        It's going down just like crypto. Not to disappear forever, but to fade into the background where the only remaining users are scam artists and their marks.

        • loathsome dongeater@lemmygrad.ml
          ·
          3 months ago

          I don't understand the argument that there is little new data. There already is so much data to train them on. My guess is that if the technology was hypothetically much more advanced than it is right now, and LLMs were what their peddlers market them as, then with the available data you could cover much much more use cases than are covered right now.

          • CCCP Enjoyer@lemmygrad.ml
            ·
            3 months ago

            Human beings learn more from a just a tiny fraction of the input that LLMs require. It's pretty convenient that tech bros always want to pump bigger and bigger datasets as a solution to the shittyness of LLMs, rather than admit humans are vastly more important, skilled, original, creative and interesting than a fucking gigawatt-sucking datacenter.

          • knightly [none/use any]
            ·
            3 months ago

            You misunderstand, I'm not saying that there is no new data to train them with, I'm saying that they can add as much data as they want but it won't solve the problems.

          • huf [he/him]
            ·
            3 months ago

            they trained these things on shit found on the internet, right? but the internet is now AI-poisoned, you cant use it to train another generation again. well, you can but it'll be even worse than the current ones.

            sure there's still lots of unpoisoned data out there, but it'll be a LOT more expensive and a LOT more work to gather it now.

  • HaSch@lemmygrad.ml
    ·
    3 months ago

    And it will go up again, and down again. Stock markets are an awful predictor of a country's actual economic state, they are more of a mystic ritual that is said to foretell the value of economies. In reality, you have to do a detailed, real-time calculation of all the capital and labour assets of a country to gauge its economic state and figure out what it could do with them; which, granted, is considered heresy under liberal rule

  • coolusername@lemmy.ml
    ·
    3 months ago

    I think it's just hedge fund market manipulation, in particular Morgan Stanley and Goldman Sachs. Ending of yen carry trade is the most legit news.

    I live in Taiwan and by law they require institutions to post their trades every day. American hedge funds were selling like .015% of their stock and sending stocks down 3-10% daily, shortly before the recent meltdown.

    Vix backwardation shows that people don't think this is going to last and I think citing meh economic data as a reason for why stocks going down is absurd. In the past poor economic data always meant stocks went up as it meant the fed was more likely to cut.

    Personally I think the US is going to get perpetual high inflation with it being reflected in the stock market, especially as BRICS takes hold and the US won't be able to export inflation as easily.

  • davel [he/him]@lemmygrad.ml
    ·
    3 months ago

    The tech contractions are getting closer together. Someone should go boil some water.

    The dip happened because:

    • blah
    • blah
    • blahdy
    • blah

    Business journalism always has the answer to why line go up or down or neither up nor down.