Why did the U.S. Nasdaq Index plunge sharply tonight? Has the bull market turned bearish?

What markets fear most is not the decline itself, but investors summarizing everything with a phrase like 'bull-to-bear transition'—overlooking the complex signals from valuation, earnings, liquidity, and market breadth. When facing a sharp Nasdaq selloff, the real risk lies not in how much the Nasdaq falls, but whether A-shares’ own valuations, funding structure, and market sentiment have already reached an overheated, crowded state. A single-day Nasdaq plunge does not necessarily signal the end of a bull market—but it does serve as a warning bell for tech stocks trading at high valuations and exhibiting excessive positioning. To state the conclusion upfront: A one-day Nasdaq plunge does not mean U.S. equities have officially entered a 'bear market'; yet it is unlikely to be an isolated, meaningless noise event. Rather, it likely reflects a concentrated release of prior overvaluation, overcrowded positioning, and elevated expectations—triggered by shifts in interest rates, corporate earnings, or risk appetite. On Monday, A-shares will likely face emotional spillover, especially in sectors mapping closely to Nasdaq—such as technology, semiconductors, AI, computing power, and consumer electronics. Whether this drags A-shares into a deep correction, however, hinges not on how far the Nasdaq falls, but on three key factors: (1) the RMB exchange rate and early reactions in Hong Kong equities; (2) whether northbound funds and institutional investors engage in panic selling; and (3) whether A-shares themselves are already in an overheated, crowded state. Many people, upon seeing a Nasdaq plunge, immediately conclude: 'U.S. equities have collapsed,' 'the bull market is over,' or 'A-shares are doomed.' Such reactions are understandable—but from a market analysis perspective, they’re premature. In financial markets, one of the easiest mistakes is mistaking 'volatility' for 'trend,' or interpreting 'emotional shock' as a 'systemic crisis.' A single large red candlestick can shift short-term sentiment—but cannot, by itself, define a bull or bear market. So why did the Nasdaq suddenly plunge? Typically, several factors converge. First, after valuations become excessively high, sensitivity to interest rates and earnings surges dramatically. The Nasdaq—and especially the Nasdaq-100—is heavily weighted toward large-cap tech stocks, AI-related firms, semiconductors, cloud computing, software, and platform companies. Over recent years, the core driver behind U.S. tech stock gains has been the earnings expansion expectations fueled by artificial intelligence—and investor confidence that leading firms can sustain exceptionally high profit margins. The problem arises when markets assign very high valuations: share prices no longer reflect current profits alone, but instead price in many years of robust future growth. Once U.S. Treasury yields rise, rate-cut expectations are delayed, inflation data disappoints, or certain tech giants issue earnings guidance below consensus expectations, the entire valuation framework compresses rapidly. Tech stocks have long durations—the higher the proportion of future profits embedded in their valuations, the more vulnerable they are to rising discount rates. Second, prior trading has become excessively crowded, making it easy for 'everyone to sell the same batch of stocks simultaneously.' This leg of the U.S. equity rally has featured a notable characteristic: indices appear strong, yet much of the gains stem from just a handful of mega-cap tech names. The more concentrated this structure becomes, the more prone it is to herding behavior. Investors buy into the same narrative: AI boosts efficiency; cloud providers expand capital expenditures; chip demand remains robust; large-language model applications continue rolling out; and industry leaders enjoy winner-takes-all dominance. When the narrative flows smoothly, herding reinforces upward momentum; when the narrative faces challenges, herding amplifies downward pressure—because funds, ETFs, quantitative models, trend-following strategies, and options positions may all be aligned in the same direction. Once profit-taking, stop-loss triggers, reduced risk budgets, or options hedging are activated, the resulting price drop often exceeds what fundamentals alone would justify.

How should we view the U.S. equity market’s performance on September 10, 2026?

On Thursday (September 10), New York crude oil futures surged past $100 per barrel, intensifying market concerns about U.S. inflation—prompting broad-based declines across the three major U.S. indices. At market close, the Dow Jones Industrial Average fell 0.6%, closing at 52,064.10; the S&P 500 dropped 0.58%, ending at 7,591.70; and the Nasdaq Composite declined 0.65%, settling at 26,081.72—marking four consecutive days of losses. Major tech stocks posted mixed results (ranked by market cap): NVIDIA fell 2.37%; Apple rose 3.56%; Google Class C gained 0.61%; Microsoft edged up 0.16%; Amazon dipped 0.2%; SpaceX rose 0.43%; Meta slid 1.42%; and Tesla declined 1.16%. The Philadelphia Semiconductor Index plunged 2.66%. Among its 30 constituent stocks, 25 rose while 5 fell: Lam Research dropped 5.65%; Intel fell 5.57%; ARM declined 3.8%; AMD slipped 3.36%; ASML fell 2.43%; and Broadcom dipped 0.97%. Memory-related stocks broadly retreated: SK Hynix fell 5.2%; Micron Technology dropped 4.9%; Western Digital declined 4.43%; SanDisk fell 4.06%; and Seagate Technology slid 2.66%. The Roundhill Memory ETF (DRAM) fell 4.9%. Amid the memory-stock selloff, the Direxion Daily 3x Long Korea ETF (KORU) plunged 12.52%, while the iShares MSCI Korea ETF (EWY) declined 4.19%. Optical communications stocks also broadly retreated: Lumentum fell 5.39%; Astera Labs dropped 5.33%; CRDO declined 4.53%; AAOI fell 4.3%; Marvell Technology slid 3.43%; Coherent dropped 3.4%; and Corning declined 3.17%.

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Dow Inc Shares Drop $78; Nasdaq Also Lower on Morning of the 10th

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