Three reasons for the plunge:
1. Panic spread:
The shadow of economic recession looms!
The Fed's urgent interest rate cut is actually an early response to the hidden worries of economic recession. Weak employment, sluggish consumption... The US economy may have entered the brink of recession. The interest rate cut has become the vanguard to resist the economic winter.
2. Expected backlash:
The market's "greed" is hard to fill!
But the market reacted coldly to the expectation of interest rate cuts, and investors only saw "nothing more". 25 or 50 basis points have long been expected to be digested, and the market is eager for more intense stimulation. The news of interest rate cuts has become a catalyst for selling.
3. Stock God Warning:
Buffett's liquidation caused panic!
To make matters worse, Buffett's liquidation in early September was like a bolt from the blue, and market confidence collapsed instantly. The stock god withdrew, investors followed suit and sold, and the market fell into a vortex of plummeting.
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