Late night bloodbath! US stocks big dump 880 points, Bitcoin crazy fall 13%, what happened?

On the night of October 10th, Beijing time, the global financial market experienced a "bloody storm."

The three major U.S. stock indexes plummeted sharply, with the decline continuing to widen. At one point, the Dow Jones Industrial Average experienced a big dump of over 880 points. By the close, the Dow fell 1.9%, the Nasdaq plunged 3.56%, and the S&P 500 index dropped 2.71%.

Tech stocks have become a hard-hit area.
Large-cap technology stocks in the US market collectively fell sharply, with TSMC's ADR experiencing a big dump of over 6%, Broadcom and Tesla seeing a big dump of over 5%, NVIDIA and Amazon falling over 4%, and Apple and Meta dropping over 3%, while Microsoft fell over 2%. In after-hours trading, the downward trend continued, with NVIDIA, Tesla, and Oracle all experiencing a fall of over 2%.

Chinese concept stocks are severely affected.
The Nasdaq China Golden Dragon Index fell more than 6%, Futu Holdings fell more than 11%, NIO and JinkoSolar fell more than 10%, Bilibili fell more than 9%, Alibaba, Baidu, and Xpeng Motors fell more than 8%, JD fell more than 6%, and Pinduoduo fell more than 5%.

The European market is also bleak.
European stock markets plunged across the board in late trading, with the Euro Stoxx 50 index falling by 1.75%, and the major stock indices in Germany, France, and Italy all dropping by more than 1%.

Crude oil and cryptocurrencies crashed.
WTI crude oil big dump over 4.24%, approaching this year's low; Brent crude oil big dump 4.62%. Bitcoin at one point suffered a big dump of over 13%, falling below the 110,000 dollar mark, Ether plummeted over 17%, and both Ripple and Dogecoin experienced a big dump of over 30%, marking the largest sell-off wave since early April.

What happened in the market?
Industry insiders have pointed out that market uncertainty has led to a big dump of risk assets, with a surge in demand for downside protection in the derivatives market. Investors are flocking to safe-haven assets such as gold and government bonds, with spot gold prices rising over 1%, surpassing the $4000/ounce mark; the yield on the 10-year U.S. Treasury has fallen to 4.034%.
Why did the market suddenly big dump?
Regarding the reasons for the big dump, there is currently no consensus in the market, but based on various analyses, the main points are as follows:

1. Inflation concerns resurface
Latest data shows that inflationary pressures in the United States continue to rise, raising concerns in the market that the Federal Reserve may be forced to tighten monetary policy ahead of schedule, triggering a sell-off of risk assets.
2. Geopolitical risks intensify
Geopolitical tensions have escalated in various parts of the world, increasing market uncertainty, leading investors to withdraw from higher-risk assets.
3. The technical selling pressure intensifies the fall
As the market fell below key support levels, programmatic trading and stop-loss orders were forced to sell, further intensifying the market's decline.
4. Cryptocurrency leverage collapse
High-leverage trading in the cryptocurrency market triggered a chain reaction of liquidations during price falls, leading to a rapid spread of sell-offs.

How should investors respond?
In the face of severe market fluctuations, investors should remain calm and avoid blindly following trends. Long-term investors may consider accumulating quality assets at lower prices, while short-term investors should control their positions and manage risks effectively.
The market is always full of uncertainty, and how to remain rational amidst the volatility is a compulsory lesson for every investor.