Analysis of the U.S. Stock Market Plunge: Macro Expectations Reversal, Tech Bubble Burst

Recently, U.S. stocks have experienced consecutive sharp declines, with the S&P 500 dropping 2.6% in a single day, marking the largest one-day decline in nearly a year; the Nasdaq plummeted over 4%, retreating nearly 10% from its all-time high, approaching a technical correction. The immediate trigger was the May non-farm employment data: 172k new jobs, far exceeding the expected 85k. The data completely shattered the expectation of rate cuts this year, and the market shifted from pricing in “three rate cuts” to “possibly resuming rate hikes within the year.” Crédit Agricole even predicted that the Federal Reserve would raise interest rates three consecutive times. The tightening expectations suddenly intensified, becoming the final straw that crushed overvalued tech stocks.

The deeper reason is that the microstructure of the tech sector is extremely fragile: the Philadelphia Semiconductor Index has surged over 96% this year, deviating 35% from the 50-day moving average, with an RSI over 83, in a state of near 25-year extreme overbought conditions. Goldman Sachs’ risk appetite index rose to its highest since 2021. The Broadcom earnings guidance fell short of expectations, interpreted as a sign of slowing AI demand, triggering a “stampede” sell-off in the semiconductor sector—PhilSemiconductor dropped over 10% in a single day, the largest decline since March 2020. Giants like Nvidia and Qualcomm evaporated over one trillion dollars in market value in a single day.

Additionally, the massive IPO of SpaceX (about $75 billion) drained market liquidity, geopolitical tensions pushed oil prices higher, and the VIX fear index soared over 60%. Both Guolian Minsheng and Huatai Securities pointed out: non-farm payrolls are just the fuse; the real reasons are the “sticky inflation + extremely crowded positions + macro expectation shifts” resonating together. Currently, U.S. stocks are in a fierce transition from a “rate cut trade” to a “tightening trade,” and short-term volatility risks have not $NVDAX been alleviated.