On March 8th, Guosheng Securities believes that the US stock market has shown high volatility from early December to mid February, and has continued to decline since late February. So far, the S&P 500, Nasdaq, and Dow Jones indexes have fallen by 6.1%, 9.3%, and 4.1% respectively. We believe that there are four main reasons for the recent decline in the US stock market: (1) some investors still have concerns about the US economic recession; (2) DeepSeek has triggered a reassessment of the relative valuations of Chinese and American technology stocks in the market. The recent adjustment of US stocks and the rise of Hong Kong stocks are basically synchronized, which is the logic behind it; (3) Trump’s unexpected tariff escalation suppresses market risk appetite; (4) Seasonal pattern, the US stock market often performs poorly in February over the years, but tends to improve in March and April. Looking ahead, sentiment indicators show that the US stock market is currently in an extremely fearful range, and pessimistic sentiment may have been fully released, with the possibility of temporarily stopping the decline and stabilizing; Whether it can return to an upward trend in the future depends on whether tariffs will further escalate and whether recession expectations can be falsified, with a focus on the performance of the first quarter report.
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