It is unimaginable how fragile the US stock market is.

Yesterday, the US released the latest CPI data, which was only slightly lower than expected, causing a significant drop in the US stock market and triggering a violent shock across the entire financial market.

In the end, not only did the Dow Jones Industrial Average fall by nearly 1,300 points, but Europe also turned from a gain to a loss, and gold and crude oil also fell simultaneously, while the exchange rates of the yen, euro, and yuan plummeted rapidly.

01, US stocks

At 8:30 PM Beijing time last night, the US released the latest CPI data. As soon as the data was released, the global financial market took a reverse trend.

At that time, the US stock market had not yet opened, but in the futures market, all three major indices experienced a straight dive.

The chart above shows the futures performance of the Nasdaq Index. In the chart, we can see this rapid dive, which was close to 13,000 points before the news was released, and within just a few minutes after the news was released, it had already fallen by nearly 500 points, and by the time it closed, it was only 12,100.

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Subsequently, the performance of the US Nasdaq Index indeed exceeded expectations.

The Nasdaq Index had already fallen by more than 2.9% at the opening, and then it continued to fall throughout the day, further declining by the time of closing, and finally closed down by 5.16%.

The Dow Jones Industrial Average closed at 31,104 points, down 3.94%, with a decline of 1,276 index points. The Dow's one-night decline completely erased the gains from the previous five consecutive trading days.02, CPI

If one were to judge solely by the market's performance, it might seem as though there has been an earth-shattering bearish news release. In reality, it's not that bad; it could simply be said that the United States' financial situation is too fragile.

The CPI data released yesterday stood at 8.3%, which, it should be noted, is not an extraordinary figure for the United States. As can be seen from the chart above, since January of this year, the U.S. inflation rate has already been above 7.5%. In fact, after March of this year, the U.S. CPI data has not been worse than it is now, with several months showing higher figures, even reaching a terrifying 9.1% in June.

Moreover, compared to the previous two months—9.1% in June and 8.5% in July—the 8.3% in August indicates a further downward trend. From these perspectives, it suggests that inflation in the United States has been somewhat controlled and has begun to show signs of peaking and retreating.

However, due to the U.S. economic community's overly optimistic view of its own situation, the expected CPI was 8.1% beforehand, so the actual announced 8.3% greatly exceeded expectations.

At the same time, because of the previous optimistic expectations, everyone believed that the Federal Reserve would appropriately slow down its interest rate hikes in the future. However, it now appears that the Federal Reserve has no choice but to continue adopting an aggressive approach with substantial interest rate hikes.

It is for these reasons that panic selling has emerged in the U.S. stock market.

03, Individual Stocks

The President of the United States claims that these data indicate that there is not a significant problem with the U.S. economy. On the contrary, these data suggest that previous efforts to control inflation have achieved some progress; it's just that the market needs more time to wait for better results.Regardless of the circumstances, the decline in U.S. stocks last night has set a new record for the largest single-day drop in nearly two years.

Currently, the probability of the Federal Reserve adopting a 100 basis point interest rate hike in September has reached one-third, and it is highly likely that significant interest rate increases will continue to be maintained over the next few months.

In terms of individual stocks, technology giants have suffered significant declines. Nvidia and AMD fell by 9%, Amazon by 7%, and Apple, Google, and Microsoft all saw drops exceeding 5%. Tesla also fell by more than 4%.

Chinese concept stocks were not spared, with widespread declines, and the China Golden Dragon Index fell by 3.27%. However, Ideal and Future saw miraculous increases, rising by 2.8% and 1%, respectively.

04, Other

The European stock market, which was rising yesterday, turned down after the release of the U.S. CPI data, and by the time of the closing. The declines in the UK, France, and Germany all exceeded 1%.

A similar situation occurred in the commodity market, where gold and crude oil were initially rising, but they also fell after the news was announced.

The Japanese yen continues to depreciate significantly, approaching the 145 mark, the euro has fallen back below 1.0, and the offshore exchange rate of the Chinese yuan has once again reached 6.98. It is very likely that it will break through 7.0 around the time the U.S. officially announces the interest rate hike.