After Black Monday, did the Nasdaq (NAS100) enter a bear market?

Event Review: U.S. Stocks Suffered the Worst Single-Day Plunge in 2025

On March 10, local time, the U.S. stock market ushered in "Black Monday", and the three major stock indexes plummeted. The Nasdaq Composite Index (NAS100) plunged 4%, the largest single-day drop since September 2022, closing at 17,468.32 points, a cumulative decline of 13.4% from its all-time high in December 2024. The Dow Jones Industrial Average and the S&P 500 fell 2.08% and 2.7% respectively, and market panic spread to almost all sectors, especially technology stocks.

The market value of technology giants represented by the "Big Seven" evaporated by more than US$750 billion in a single day: Apple (AAPL) fell 4.85%, Nvidia (NVDA) fell 5.07%, Meta (META) and Google's parent company Alphabet (GOOG, GOOGL) both fell by more than 4%. Tesla (TSLA) plunged 15%, the largest single-day drop since September 2020, and its market value was halved from its high in December last year, becoming a landmark event in the deterioration of market sentiment.

Bear market alarm sounds: Nasdaq is only one step away from the critical point

According to technical analysis standards, a 20% drop in the stock index from its high is defined as a "bear market". Currently, the Nasdaq has fallen 13.4% from its historical high. If the decline continues, there is only 6.6% room left to the bear market. Peter Cardillo, chief economist of brokerage Spartan Capital, pointed out that the Nasdaq index has entered a technical adjustment range, and the US Treasury yield has continued to decline (the 10-year Treasury yield has dropped from 4.8% to 4.218%), indicating that the market's concerns about economic recession have intensified, and "the possibility of a bear market is already quite high."

Multiple reasons behind the plunge

Policy uncertainty and recession expectations

Trump's tariff policy has been repeated: The United States' wavering attitude towards imposing tariffs on Canada, Mexico and other countries has intensified market concerns about rising global supply chain costs and corporate earnings pressure.

Government statements have caused panic: Trump did not rule out the possibility of a recession in an interview, saying that "the economy is in a transition period." This statement was interpreted by the market as tacit approval of the risk of recession, further undermining confidence.

Debt ceiling and fiscal deadlock: The US government may be shut down due to the failure of congressional negotiations, which has exacerbated policy uncertainty.

The valuation bubble of technology stocks has burst

Technology stocks represented by Tesla were previously highly valued (Tesla's price-to-earnings ratio is still over 100 times), but under the multiple pressures of declining sales, rising production costs (tariffs affect overseas supply chains) and management distraction (such as Musk's concurrent government position), the market began to re-price.

Institutions such as Goldman Sachs and UBS have recently intensively lowered Tesla's target price, reflecting the market's doubts about the growth logic of technology stocks.

Reversal of capital flows and market sentiment

Goldman Sachs data shows that US stocks have seen net outflows for four consecutive weeks, and passive selling of leveraged funds has accelerated the market decline. Global funds have turned to markets with more attractive valuations, such as Chinese assets (A shares rose against the trend, and the RMB appreciated by more than 400 points) as a safe-haven option, further withdrawing liquidity from US stocks.

Historical comparison and future outlook

This plunge is similar to the market turmoil caused by the "reversal of the yen carry trade" in September 2022, but the current risk is higher:

Recession signals are strengthened: The Atlanta Fed predicts that the US GDP will shrink by 2.4% in the first quarter of 2025, and institutions such as Morgan Stanley and Goldman Sachs have lowered their economic growth expectations.

Technical pressure: If the Nasdaq falls below 17,000 points (a 15% drop from its historical high), it may trigger more stop-loss orders and accelerate the entry into a bear market.

However, some analysts believe that market panic may be excessive:

Current corporate earnings have not deteriorated significantly, and earnings expectations for S&P 500 components remain stable.

The Federal Reserve may cut interest rates in advance due to economic slowdown, which may provide a buffer for the market.

Conclusion: Game on the edge of a bear market

Whether the Nasdaq has officially entered a bear market still needs to observe the market reaction and economic data in the next two weeks. But it is undeniable that policy uncertainty, valuation corrections and capital withdrawal have formed a resonance, and the market may continue to be highly volatile in the short term. Investors need to be alert to the risk of technical breakdown, and pay attention to potential positive factors such as the meeting between Chinese and American leaders and the Fed's policy shift.

^{*Disclaimer: The content of this article is for learning purposes only, does not represent the official position of VSTAR, and cannot be used as investment advice.}