Global markets experienced a severe downturn on November 18, dubbed "Black Tuesday," with major indices across Asia, Europe, and pre-market U.S. futures all posting significant losses. Here’s what happened:
**Asian Markets Lead Declines** Japan’s Nikkei 225 plummeted 3.22%, its worst single-day drop since April, closing below 49,000 points. South Korea’s KOSPI fell 3.32%, led by semiconductor stocks amid worsening risk sentiment. Precious metals also tumbled, with gold and silver prices sliding sharply.
**Cryptocurrency Rout** Bitcoin dropped below $90,000 for the first time in seven months, erasing all its 2025 gains. Analysts noted its correlation with equity markets, where weakness in crypto amplified concerns about tightening liquidity and risk aversion.
**A-Shares Under Pressure** China’s major indices closed lower, with the Shanghai Composite down 0.81%, the Shenzhen Component losing 0.92%, and the ChiNext Index declining 1.16%. Over 4,100 stocks fell, while only 1,278 rose.
**Key Drivers of the Selloff** 1. **Geopolitical Tensions**: Fears over Sino-Japanese relations weighed on sentiment. 2. **Japanese Bond Market Turmoil**: A selloff in ultra-long-term government bonds reflected worries about ballooning fiscal stimulus and debt risks ahead of a 20-year bond auction. 3. **Delayed Fed Rate-Cut Expectations**: Markets repriced the likelihood of a December Fed rate cut, heightening uncertainty until clearer signals emerge from September employment data or NVIDIA’s earnings. 4. **AI Valuation Concerns**: NVIDIA’s upcoming earnings report, due post-market Wednesday, is seen as a litmus test for overstretched AI stock valuations. Analysts noted profit-taking ahead of the release, with investors questioning how long the AI-driven rally can sustain.
**NVIDIA in Focus** The chipmaker’s results are pivotal, given its 8% weighting in the S&P 500 and ~10% in the Nasdaq 100. Strategists emphasized its outsized influence: "This isn’t hyperbole—it’s the most important earnings report of the year." Concerns over GPU depreciation cycles and tech valuations add to the scrutiny.
Market participants await clarity from NVIDIA’s performance and macroeconomic data to gauge whether the downturn marks a correction or a deeper shift in risk appetite.
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