Today's US stock market observation: It's not just a correction, but a year-end valuation adjustment!

Last night, the US stock market experienced a standard valuation correction: the Nasdaq plunged 1.81%, the S&P 500 fell 1.16%, marking the largest single-day decline in nearly a month, and the Dow Jones declined for the fourth consecutive day. The AI sector led the decline again, with giants like Oracle, Broadcom, and Nvidia collectively breaking below key levels, revealing institutional year-end rebalancing pressures. The VIX is only at 17.6, with a slow, frog-in-boiling-water style upward drift, showing no obvious panic bottom—this “sleep paralysis” feeling is more torturous than a sharp crash. Tonight at 21:30, the triple data release (CPI + Initial Jobless Claims + Philadelphia Fed) will be the focus; uncertainty itself is the biggest negative. The market is struggling to digest the 4.15% US Treasury yield and the potential rebound in inflation.

Core performance overview of last night’s US stocks

Institutional year-end rebalancing has shifted from “orderly retreat” to “upward pressure,” with active funds systematically reducing positions, but passive ETFs providing a floor, creating a peculiar structure.

Focus on tonight’s triple data at 21:30

Due to the government shutdown, the November CPI month-over-month data is missing, leading the market to interpret blindly:

Multiple institutions expect total CPI YoY at 3.0–3.1%. If ≥3.1% and core >3%, the story of inflation easing + rapid rate cuts will be discounted, and high-duration AI/growth stocks will continue to be valued down, with funds shifting toward energy/commodities/high dividends/cash cows. If ≤ expectations (e.g., 2.8–3.0%), the current AI sell-off may be viewed as technical position management, and the index could stabilize in the short term.

Other key points to watch

• US Treasury yields: The 10-year remains around 4.15%, with the market struggling to digest; poor digestion could trigger new crises.
• Fed vs. Trump: Waller says there is still room for rate cuts but defends independence; Trump hints at replacing the dovish chair + lower rates, causing market confusion over “low rates + politicization.”
• Capital flows: ICI data shows long-term mutual funds net outflows of $30.5 billion (active reduction), but passive ETFs see huge net inflows, creating a “active exit + passive support” scenario.
• Stock highlights: Micron rose after hours (guidance beat expectations), possibly stabilizing sentiment in semiconductors; Medline IPO surged 41% on its first day (raising $6.26 billion), indicating off-market funds are still active, but very selective—quality assets still have liquidity, junk stocks remain unfavored.

Do you prefer a sharp crash or a slow decline?

Last night’s “increased intensity but VIX didn’t explode” slow decline is more torturous than a crash: no panic bottom signals, like sleep paralysis—feeling awake but unable to move. A crash at least offers a bottom-fishing opportunity, while a slow decline tests patience and wears down investor resolve.

If tonight’s data exceeds expectations, the slow decline may continue; if below expectations, the AI sell-off might be quickly interpreted as position management, giving the index a breather. Year-end rebalancing + macro uncertainties make short-term volatility inevitable, but the long-term outlook still depends on AI productivity and policy implementation.

Which type of decline do you fear more? Share your thoughts in the comments~ A. Sharp crash (at least with bottom signals) B. Slow decline (tests patience, very torturous) C. Neither, hold steady without concern D. Already in cash and watching

Take one step at a time—let the data speak, see you tonight!