The biggest drop since September!

The Nasdaq 100 index fell 2.6% on Thursday, wiping out 2.4% gains in the previous session.

Of the three major indices, the Nasdaq 100 index suffered the biggest decline, and every recent decline in the index has been a big one. The sell-off could be a delayed response to Powell's tough talk about interest rate policy, and the fall came ahead of Friday's "triple witching", which also hit the index's leading profitable companies.

U. S. large-scale technology stocks fell across the board. The Philadelphia semiconductor index also erased gains after the fed meeting, falling more than 4%, its worst performance since may.

1Technology stocks still failed to resist the prospect of raising interest rates.

Traders point out that the once coveted beneficial home concept of Adobe Inc, a software maker, has lost some luster due to poor sales expectations. At the same time, Apple Inc's plan to develop wireless chips has heightened concerns that competition will intensify in an already crowded industry.

The decline on Thursday is very different from that on Wednesday. Technology stocks are expected to lead stocks unusually higher after the Fed took a tougher-than-expected stance on Wednesday, doubling the pace of tapering bond purchases and expecting technology stocks to rise unusually after raising interest rates three times next year. While some investors see the initial reaction of the stock market as a testament to the strength of the industry, others attribute Wednesday's rise to options traders cutting back on bad hedging positions in the stock market.

"there was an unwinding of positions in the market on Wednesday," Art Hogan, chief market strategist at National Securities, said by telephone. The question on Thursday is: how can we prepare for next year or the next quarter in anticipation of a modest rise in interest rates? You have to think that growth companies have lower price-to-earnings ratios. "

2There was a "second day reversal" after repeated Fed meetings.

So far, three Fed meetings have shown a reversal the next day. The S & P 500 has barely budged since the Fed's decision in September, when Mr Powell first sent a tough signal about the Fed's stimulus measures. The next day, the index surged 1.2 per cent as investors paid more attention to Mr Powell's upbeat assessment of the economy.

Similarly, bond investors took a day to digest the November decision, when Powell confirmed that the Fed would begin to scale back its bond purchases. Driven by the hawkish news, the yield on the 10-year Treasury note rose to 1.6 per cent, then reversed the next day and interest rates fell by 8 basis points.

In 10 of the last 16 Fed meetings, the S & P 500 reversed in the first two trading days after the meeting.

Bill Northey, senior vice president of Bank of America Corporation Wealth Management, said on Thursday: "it is not uncommon for monetary policy to fluctuate after the announcement. But in the end, the problem will not be resolved in the trading day, but will be resolved in the coming quarters, as the Fed announces this new policy, affecting inflation and growth through economic transmission. "

3Is the seesaw "elastic" or hidden weakness?

The rapid spread of omicron has heightened investor concerns.This is most evident in the Treasury market, where yields continue to fall and investors worry that new restrictions could hurt the economy.

Stock market investors have turned to selling stocks that have performed well for most of the year, as well as stocks that face higher borrowing costs as a result of higher interest rates next year.

Liz Ann Sonders, chief investment strategist at Charles Schwab & Co, said: "because the sector has been rising and falling sharply this year, seesaw volatility is not the nature of new market behavior. Although people have focused on the "resilience of the market" this year, in essence, there is more volatility and weakness hidden beneath the surface of the market. "

Speculative stocks fell even more on Thursday as the prospect of higher interest rates continued to weigh on their valuations. A basket of unprofitable technology stocks fell more than 4%. The index has fallen 24 per cent since January and this year may be the worst year since Goldman Sachs Group began tracking the index in 2014.

4Bank of America: "full surrender sell-off" in Technology stocks

Hedge funds, which once bought large amounts of high-growth stocks, are now scrambling to reduce their holdings of technology stocks. In Goldman Sachs Group prime brokerage data, the ratio of software and Internet stocks held by hedge funds to the benchmark index has fallen to its lowest level since records began.

Danny Kirsch, head of options at Cornerstone Macro LLC, said: "Adobe Inc's lack of earnings seems to have had a knock-on effect and seen growth / non-profit technology companies resume the downward trend that began before the Fed meeting. The difference this time is Apple Inc, and some large-cap stocks that have been horizontally high are now falling. "

Michael Hartnett, chief investment strategist at Bank of America, wrote in a report that large technology stocks had "small cracks" at the center of a 13-year bull market before tightening began. Hartnett noted that investor positions "show a full capitulation sell-off".

According to Hartnett, inflation always precedes a recession. "just like a very high body temperature, you have to go through austerity or recession to lower your body temperature in order to get your body back to normal and ensure your health in the future. "

BofA pointed out that due to runaway inflation, the classic saying "buy on the first rate hike and sell on the penultimate interest rate hike" (buy the first hike, sell the penultimate rate hike) is not appropriate for the current market environment.

Unlike other markets, the S & P 500 is dominated by technology and FAANG stocks, and the entire market will "collapse" if the technology bubble is punctured.

The deterioration in the breadth of the Nasdaq index is also a problem, which has not been seen since the peak of the tech bubble. According to Crescat Capital's Tavi Costa, 65 per cent of Nasdaq composite index stocks are below the 200-day moving average.

Albert Edwards, an analyst at Societe Generale, said: "in the face of some of the major threats, the US technology sector that has dominated the bull market in one form (IT industry) or another (FAANG) seems indestructible. "but we have seen a similar recession before, most recently before the collapse of Lehman Brothers. "