Hua Er Jie Jian Wen·2025-08-20 20:50Core Viewpoint - The U.S. stock market has experienced a significant sell-off, primarily driven by concerns over the Federal Reserve's hawkish stance and the high valuations of technology stocks, leading to a loss of $1 trillion in market capitalization for the S&P 500 index [1]. Group 1: Market Trends - The sell-off, led by technology stocks, has resulted in the S&P 500 index experiencing its largest single-day drop since early August [1]. - The Nasdaq 100 index also saw substantial declines ahead of the Federal Reserve's meeting minutes release, reflecting heightened risk aversion among investors [1][3]. - Nvidia's stock fell nearly 4% before the release of the meeting minutes, while Palantir experienced a maximum intraday drop of over 9%, marking a cumulative decline of 23.87% since August 12 [1]. Group 2: Investor Sentiment - Analysts suggest that the focus of investors has shifted to Federal Reserve Chairman Jerome Powell's upcoming speech, which is anticipated to provide further insights into future policy directions [3]. - There is a division among investors regarding the recent market downturn, with some viewing it as a buying opportunity, while others believe that profit-taking is prioritized due to high market valuations [8][10]. - Concerns have been raised about the concentration risk in technology stocks, as their significant weight in the market could lead to a broader market decline if they continue to underperform [5]. Group 3: Economic Indicators - Despite the recent downturn, some analysts argue that the downside potential for technology stocks may be limited due to global central banks easing policies, which could support global equity markets [9]. - The market has seen a 30% increase since April, but signs of investor fatigue are emerging, particularly as leading growth stocks have underperformed compared to small-cap and value stocks [6][7].