Stock Market Crash: US stock market in turmoil again - biggest decline in 3 years

The S&P 500 is heading for a fifth consecutive week of decline due to another megacap selloff in the US stock market. This is the longest decline since May 2022. The S&P 500 fell nearly 1% on Friday. The Nasdaq 100 fell 0.9% and the Dow Jones fell 1.1%. Tesla gained, while the market was shocked by the weak outlook of FedEx, Nike, Micron and Lennar.

Why is there such a decline in the market? 1. Decline in tech stocks- Nvidia's 'Death Cross' pattern (where the 50-day moving average goes below the 200-day moving average) scared investors. Selling increased in companies with high valuation.

2. Fear of recession and fear of trade war- Signs of slowdown in the US economy are increasing. Investors are worried about the impact of Donald Trump's trade policies and tariffs. 3. Effect of Triple Witching- On Friday, $4.5 trillion worth of stock, index and ETF contracts expired. This increased volatility and selling pressure. 4. Investors are losing confidence in the 'dip buying' strategy. Recently the S&P 500 suffered a 10% correction, but every bounce back is not lasting long. Traders doing 'dip buying' are incurring losses. Will the market fall further? Morgan Stanley's Michael Wilson believes that:-"New highs are unlikely to be set in the first half of 2025. It will be a slow recovery." According to JPMorgan data:- Last week, $12 billion of retail investment came into the market. Retail investors often sell last, indicating that the market has not yet made a bottom. Will the impact of US tariffs be limited? According to Bank of America's Michael Hartnett:- Germany and China's indexes are showing strength, while the US continues to decline. Investors are not yet ready to believe that US tariffs can lead to a recession. Overall- S&P 500 has fallen for 5 consecutive weeks - The decline in tech companies and high valuation stocks is sharp after 2022. Volatility has increased due to $4.5 trillion derivatives expiry. 

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