The Nasdaq index recorded its largest weekly decline since April

On November 10th local time, the US stock market suffered a cumulative decline across all sectors last week. The Nasdaq index dropped by more than 3%, marking the largest weekly decline since April this year. The bubble risks in the AI sector and doubts about profitability began to emerge among investors. However, on Friday, the US stock market experienced a V-shaped reversal. Signs of loosening in the government shutdown situation appeared, and market sentiment improved somewhat. Nevertheless, there were still doubts about whether the government could reopen this week. At that time, Trump declared April 2nd as "Freedom Day" and threatened to impose "equivalent tariffs" on countries around the world, causing investor confidence to decline. Meanwhile, the non-farm payroll report for this month was still absent, and the US stock market entered a "dive" state in the morning session due to the impact of the survey data from the University of Michigan showing that "US consumer confidence dropped to the lowest level in more than three years".

The Nasdaq index recorded its largest weekly decline in more than half a year (3%), mainly due to the bursting of AI valuation bubbles, the impact of Trump's tariff policies, and data shortages caused by the government shutdown. Its influence was widespread and involved multiple aspects. First, it affected the internal US stock market. The market value of the seven major companies - Microsoft, NVIDIA, Apple, Amazon, Meta, Google, and Tesla - evaporated by over 1 trillion US dollars in a week. Among them, NVIDIA dropped by 7%, Microsoft by 5%, and Meta by 6%, indicating market doubts about the sustainability of AI capital expenditures and debt financing models. DBS Bank warned of the high valuation problem of AI stocks, and Goldman Sachs predicted that the US stock market might experience a 10%-20% correction in the next 1-2 years. If the AI narrative is refuted, it may repeat the 38% deep correction of the internet bubble in 2001. At the same time, UBS's trading desk estimated that if the S&P 500 index dropped by 1%, it would trigger 20 billion US dollars of programmed selling, and a drop of 3% or more would trigger 280 billion US dollars of selling, forming a vicious cycle of "the more it drops, the more it sells". If the S&P falls below the 6600-point critical line, the hedging funds that had previously stabilized the market will turn to forced selling, exacerbating market volatility.

Second, the sentiment and capital flow in the financial market. Investors' concerns about the sky-high valuations of AI-related companies intensified, leading to a rapid withdrawal of funds from technology stocks. The market value of NVIDIA, Microsoft, Meta, etc., related to AI, evaporated by approximately 1 trillion US dollars this week. Among them, NVIDIA's single-week decline exceeded 7%, with a market value loss of nearly 350 billion US dollars. Institutions such as Goldman Sachs and Morgan Stanley warned that the US stock market might experience a 10%-20% correction in the next 1-2 years, further dampening market confidence. At the same time, traditional safe-haven assets such as gold have experienced short-term declines and their long-term allocation value has been re-evaluated; US bond yields have risen, attracting some safe-haven funds. The linkage between the cryptocurrency market and technology stocks has strengthened, with Bitcoin rebounding to 10.375 thousand US dollars, reflecting the rapid switching of funds between risky assets.

Third, the transmission effect on global financial markets. The Nikkei 225 index of Japan dropped by more than 4% in the week, marking the worst performance since the beginning of April; the Straits Times Index of Singapore, the KOSPI of South Korea, and other indices were also affected. The Hong Kong stock market, due to the strong correlation between Chinese mainland stocks and US technology stocks, was under pressure in the Hang Seng Technology Index, but some high-quality stocks (such as Alibaba and Tencent) performed relatively well due to their stable fundamentals. Emerging markets, due to their reliance on foreign capital, experienced increased volatility. In India and Vietnam, sectors with a high proportion of technology stocks saw significant declines, with funds flowing into US dollar assets or gold as a safe-haven asset. Gold and silver, due to market concerns about the失控 of the global economic situation， lost 1.61% and 1.58% respectively in the US market. Additionally， the oil market， affected by the downward adjustment in demand expectations， has reached its lowest level in nearly two years.

This significant decline of the Nasdaq index has triggered a series of ripples in the financial market like a domino effect， even casting a shadow of consumption contraction and growth slowdown on the US real economy. In the future, the market will closely monitor AI narrative verification, the shift in the Federal Reserve's policies, and the evolution of geopolitical risks. These factors may become the key variables determining whether volatility can converge.