The Fed's remark "a bit expensive" sent US stocks plunging! What caused last night's crash?

Oh my god, last night's US stock market was so thrilling, playing a shocking reversal! It was all red at the opening, but in the blink of an eye, it turned green and made people panic. Why did this happen? To put it bluntly, the market was scared out of its wits.

Recently, the market has already been feeling uneasy because asset prices like stocks and real estate are too high, making it feel a bit "hollow." Then, an important Fed official (Cook) directly pierced this bubble at an event at Georgetown University's business school. She said she feels that asset prices are at historically high levels, and the possibility of a significant drop has increased.

As soon as these words came out, the market sentiment collapsed instantly! It was like a room full of people pretending things weren't expensive, and then the most influential person suddenly said, "Hey, isn't this too expensive?" Everyone immediately realized, "Huh? So you all think it's expensive too?? Then I'll get out first!" And so, the selling wave began. How bad was the drop?

Index-wise: $Dow Jones Industrial Average(.DJI.US) fell 0.84%, $SPDR S&P 500(SPY.US) fell 1.56%, and $NASDAQ Composite Index(.IXIC.US) was the worst, dropping 2.15%, with an intraday plunge of over 1,100 points.

Individual stocks: The "Magnificent Seven" tech stocks all flopped. Particularly dramatic was Nvidia, which initially rose over 5% due to strong earnings but ended up falling over 3% at the close, wiping out over a trillion yuan in market value. This movement fully illustrates the fragility of market sentiment.

Of course, last night's crash can't be entirely blamed on Cook's one sentence—it was a combination of several things:

One is increased skepticism about AI: Even with Nvidia's strong earnings, people are starting to worry whether the massive investments in AI will actually generate real profits in the future. The good news running out became a reason to sell. $NVIDIA(NVDA.US)

Another is the uncertainty about a Fed rate cut in December: Despite reports of decent job growth in September, the unemployment rate rose to 4.4%. This has made it highly uncertain whether the Fed will cut rates in December, leaving the market in a dilemma.

Moreover, the market structure is fragile: Goldman Sachs pointed out that market liquidity is poor, meaning it can't handle large sell orders well, amplifying volatility at the slightest disturbance.

In short: Last night's drama was like the market, already at a high level, feeling "expensive, scared, tired, and skeptical" (overvalued, afraid of being left holding the bag, exhausted after a long rally, and doubting the AI narrative), with Cook's remarks being the needle that popped the bubble.

The market switched from "pretending everything's fine" to "collective sobriety" mode, compounded by concerns about AI profitability and uncertainty about Fed policy, ultimately leading to this high-open, low-close crash.

So, this might not be the end of the world, but it's definitely a loud alarm, reminding everyone that market sentiment is very fragile.

(Investing involves risks; proceed with caution. This article is just casual chatter and does not constitute any advice!)