U.S. stocks plunge unexpectedly; high-leverage ETFs, AI uncertainty, and crypto liquidations cited as triggers
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The Nasdaq 100 index fell 1,000 points in 27 minutes, and the S&P 500 wiped out $1 trillion in market value, reversing from a 1% gain at the open to a 3% decline. US PCE inflation rose to 4.1%. Apple announced price increases of up to 25% for Mac and iPad due to soaring AI chip costs; Apple shares fell nearly 6%, erasing $220 billion in market value. The Kobeissi Letter believes that widespread high-leverage ETFs, AI uncertainty, and massive cryptocurrency liquidations are the main drivers of increased volatility, and expects market volatility to continue.
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