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A similar fall in Oil is only thing which is stopping the start of the next bull market in India. Been saying for a while now, though Korea and US offers huge returns, risk reward favours India, more so for peace of mind! Index falling 5-10% every alternate weeks isnโt good for health :)
๐จ EVERYTHING THAT COULD GO WRONG FOR MARKETS WENT WRONG TODAY.
S&P 500 down -1.65%, wiping out $1.14 trillion.
Nasdaq down -2.60%, wiping out $1.11 trillion.
Gold down -3.38%, wiping out $1 trillion.
Silver down -6.9%, wiping out $280 billion.
Bitcoin down -6.31%, wiping out $80 billion.
In total $2.5 TRILLION wiped out in a single session. These were not isolated moves. Everything started breaking at the same time.
It started with the jobs report this morning.
The US economy added 172,000 jobs in May. Wall Street expected 88,000. That is almost double.
On any normal day, strong jobs is good news. But inflation is already at 3.8% and oil is sitting at $90. A labor market this strong tells the Fed it cannot cut interest rates and may actually need to raise them.
The probability of a rate hike this year went from 40% to 57% in a single day. That spooked every investor holding tech and growth stocks because higher rates mean those stocks are worth less today.
Then the AI trade started cracking.
Yesterday Broadcom reported record earnings: revenue up 48%, AI chip sales up 143% and the stock still crashed 12.6%. The reason was simple.
Broadcom did not raise its AI revenue targets for the year. Investors had expected it to. That single miss made people ask a question they had been avoiding for months: are we paying too much for AI stocks?
That question got louder today when a research firm called SemiAnalysis revealed that Nvidia's next-generation AI chips will need significantly less memory than everyone assumed, roughly half of what the market was pricing in.
Memory chips are what companies like SK Hynix and Samsung make. SK Hynix fell nearly 10% today. Samsung fell over 6%.
South Korea's entire stock market crashed 5.5% in a single session. Japan's semiconductor stocks did the same.
And then Anthropic added fuel to the fire by publishing a report warning that AI is getting close to the point where it can improve itself without human help and calling for a global pause in AI development.
Coming on the same day as the memory demand news and Broadcom's miss, it fed a single growing fear across the market: what if the AI boom is moving faster than the business models can keep up with?
Underneath all of this, there is a liquidity problem nobody is talking about.
SpaceX goes public next week at a $1.75 trillion valuation. Anthropic just filed to go public. OpenAI is next.
These three companies together are worth $4 to $5 trillion. Fund managers need cash to buy into these listings.
But cash levels are already at their lowest since early 2024. The only way to raise cash is to sell what they already own. That selling is happening right now.
The new Fed Chair Kevin Warsh will also hold his very first policy meeting in 11 days. He was appointed by Trump with the expectation of cutting rates.
He is now walking into a situation where inflation is high, oil is high, and the job market is running hot. Investors do not know what he will do.
When nobody knows what the most powerful central banker in the world will decide in less than two weeks, the safest move is to reduce risk today.
Everything that could go wrong, went wrong at the same time. A hot jobs report, a collapsing ceasefire, a crack in the AI trade, a trillion dollar liquidity drain, and a Fed meeting with no clear outcome.
@DeepIceValue LOL. You waited for one 20% pull back after 500% rally to post this? Honestly, I wouldnโt hold them if they didnโt exit at this price because they have earned it. What they own is at least 10x more than what they exited! Calling others delusional is funny!
Rameshbabu Praggnanandhaa is the Champion of Norway Chess 2026! With an incredible win on demand against Vincent Keymer in the final round, Praggnanandhaa wins one of the strongest tournaments of the year scoring 18/30 points, 2 classical wins against World no.1 Magnus Carlsen, and an incredible 4-game Winstreak to finish the event!
A huge congratulations to Praggnanandhaa, his team and his family- this is undoubtedly the biggest achievement of his career so far, and what a way to get there!
Graphic: Anmol Bhargav
#chess #norwaychess #Praggnanandhaa
Rajavel - I suggest you first apologize for the nasty and unfounded allegations you passed against Thalaivar Rajinikanth whom Annamalai respects a lot as he mentioned even today in his speech before doing this advertisement for him.. I donโt think Annamalai needs any advertisement frankly..