On Tuesday, September 3rd, at the close of the US stock market, chip giant Nvidia plummeted by 9.5%,

 with its market capitalization erasing $279 billion. As Nvidia has been among the top three global market capitalizations alongside

 Apple and Microsoft for most of this year, with a market cap in the trillion-dollar range, this plunge also set a record for the 

largest single-day market cap loss for a US company. Based on the closing price that day, Nvidia's single-day market cap loss was equivalent to about 1.5 Alibabas.

Direct cause of the crash: On September 3rd, local time, according to a Bloomberg report, as antitrust investigations deepen, the US Department of

 Justice has issued subpoenas to AI giants including Nvidia. The report cited sources as saying that the Department of Justice had previously sent 

out survey questionnaires to companies and is now issuing legally binding demands for companies to provide relevant information, 

which means the government is one step closer to filing a formal lawsuit.

Reasons for the market crash

The decline in the US stock market yesterday can be attributed to several factors. First, the US ISM Manufacturing PMI index for August was lower than expected, 

which is often seen as a key indicator of economic activity. Especially when this data is combined with a comprehensive decline in the prices of black commodity products, 

the market may begin to anticipate an economic recession. In addition, some believe that the growth cycle of the semiconductor industry for 2023-2024 may have already peaked, 

although this point has not yet been reflected in the A-share market.

Secondly, looking at historical data, over the past 40 years since 1984, the performance of the S&P 500 index in US election years has generally been weaker than in non-election years. 

Especially during the election period from September to November, stock market performance tends to be weak, and it is not 

until after the election that the market may see a significant rebound. This pattern may reflect investors' uncertainty and cautious attitude during the election period.

Wall Street Oracle: A potential 10% plunge in the future, buy the dip

Tom Lee, co-founder and head of research at US investment firm Fundstrat Global Advisors, said that the US stock market could plunge by 7% to 

10% in the next eight weeks, and advised investors to be prepared for significant volatility, as there will be a series of events challenging the recent strength of the US stock market.

The long-term bull said, "I think investors should be cautious in the next eight weeks. In eight months of this year, the market has risen for seven months. 

So we know this is a very strong market. But then there's the Fed rate cut in September, and the US election, these things will make people nervous."

This Friday, the US non-farm employment data will also be released. Some Wall Street figures are worried that this report may be weaker than expected. 

But the "Wall Street Oracle" pointed out that even if the non-farm data is better than expected, there may be a pullback as investors readjust their interest rate prospects.

"If it (non-farm data) is so strong that it causes investors to worry and causes the US stock market to fall on Friday, I would buy the dip," he said.