This time, there is no single triggering factor.

Written by: He Hao

Source: Wall Street Watch

From tech stocks to gold to cryptocurrencies, the various hottest trades on Wall Street that were previously being chased by funds every day have now completely turned to a sudden retreat into safe havens.

This time, there is no single triggering factor, unlike last April when the market plunged into panic due to President Trump's trade war. Instead, a series of slowly accumulating messages have continuously sounded alarm bells, triggering market anxiety over asset valuations, and many have long suspected that these valuations have risen too high, ultimately leading investors to almost simultaneously choose to withdraw.

Thursday's market performance once again confirmed this:

The S&P 500 fell 1.2%, marking its third consecutive day of losses; the Nasdaq 100 index expanded its decline, reaching its deepest correction since last April.

Software stocks continued to decline, with AI company Anthropic launching a new model aimed at executing financial research, highlighting the competitive threat posed by new technologies.

Silver prices, which had previously reached historic highs alongside gold, plummeted 17%.

Bitcoin fell 10% in a single day, erasing all gains since Trump won the election 15 months ago, as investors began to close out losing trades financed through borrowing.

U.S. Treasuries rebounded, once again playing the traditional role of a "last safe haven."

Despite exceeding revenue expectations, Alphabet, Google's parent company, saw its stock price pressured downward after announcing ambitious spending plans.

After the U.S. stock market closed on Thursday, Amazon's stock price plummeted 10%, as the company announced plans to invest $200 billion this year, far exceeding analyst expectations, and these analysts have increasingly worried about excessive spending by tech companies on artificial intelligence.

Recent market movements stand in stark contrast to the sentiment on Wall Street at the beginning of the year. At that time, strategists expected the U.S. stock market to experience its longest consecutive rise in nearly two decades. These predictions were based on several assumptions: the AI boom would continue, a resilient economy would continue to support corporate profits, and the Federal Reserve would lower interest rates.

This overall outlook largely still exists, as evidenced by the robust earnings reports released in recent weeks. However, at the same time, the market has refocused on a number of accumulating risks:

• Which companies will be eliminated in the AI wave;
• If Kevin Warsh, nominated by Trump, is confirmed to succeed Powell as Fed Chair, what direction will monetary policy take;
• Whether the asset valuations of gold, Bitcoin, and even tech giants like Alphabet have become too high and are unsustainable in the long term.

The stagnation of momentum is particularly evident in Bitcoin:

For most of last year, the speculative frenzy triggered by Trump's victory drove cryptocurrency prices sharply upward, but since the beginning of this month, with a massive withdrawal of investments, this market has experienced a collapse-like plunge.

On Thursday, as the trading day progressed, the sell-off of Bitcoin further intensified, dragging down other cryptocurrencies, related ETFs, and "crypto vault" companies like Strategy that hold large amounts of Bitcoin.

Later on Thursday afternoon, New York time, Bitcoin briefly plummeted 13%, falling below $63,000, nearly retreating half of the historical high set four months ago.

In the stock market, the declines were relatively mild, but the selling pressure was widespread, with 9 out of the 11 major sectors in the S&P 500 experiencing losses. In addition to concerns about which companies will become losers in the AI technology wave, investors are also questioning whether the massive investments in this technology will ultimately yield returns. The decline in Alphabet's stock price is a reflection of this sentiment.

Regarding the aforementioned trends, industry insiders pointed out:

People are clearly turning to more defensive strategies. This feels more like a market environment where you shoot first and ask questions later. The fear and uncertainty in the entire market are evident.

The recent pullback reflects market concerns: the hottest stocks and assets like gold had previously risen too quickly and should undergo a "clearing." This is a reset. Momentum may have been overly exhausted.

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