According to reports on Sunday evening of the U.S. stock market’s future downfall, investors are getting worried about the open market and thinking that there may be a big market crash like “Black Monday,” which is spreading fear in both the stock and cryptocurrency markets.
S&P 500 futures fell 5.98% by 10 p.m. ET, while the Nasdaq 100 futures fell 6.2%. Dow futures fell 5.5%. These steps came after weeks of growing trade issues and market uncertainty, with investors selling off risky investments in all types of assets.
The host of CNBC’s Mad Money, Jim Cramer, mentioned a similar event from history in a post after Saturday, writing: It’s surprising that we have not seen a comeback in the market, in case President Donald Trump realizes that a big market crash like Black Monday may not damage his reputation.
The Asian market showed an amplifying risk-off sentiment, with Japan’s Nikkei 225 dropping as much as 8.9% in initial trading. After a two-day holiday in Taiwan, the Taiex index dipped around 10%, causing automatic pauses in trading for major stocks like Foxconn and TSMC.
The government has also declared a temporary ban on short-selling to help stabilize the market.
Liquidations in the crypto market have reached around $986 million, with more than $300 million coming from both long and short Bitcoin positions.
Marco Lim, the managing director at Solowin Holdings and founding partner of MaiCapital, shared that not only has Bitcoin dropped under $80,000, but gold has also dropped under $3,000. If USD/JPY goes down, we may see more people pulling out of carry trades.
In other words, investors might take their money out of assets with higher returns, creating more money to move away from risky investments in global markets.
At the same time, volatility index futures ($VIX) have surged over their August 2024 top.
The Kobeissi Letter, a well-known macro newsletter, posted on X Sunday that the market had lost its stability and was now entering a phase driven by fear. The firm said, “Even safe-haven assets are being dropped,” as gold futures briefly dropped below US$3,000/oz. They added that sentiment was approaching the levels seen in March 2020.
On Friday, Retail investors sold 1.5 billion in equity during a 2.5-hour window, and it was the largest historical outflow on record. Institutional capital also kept moving out of U.S. equities at a fast rate, with March 2025 marking the sharpest exit in years.
The most recent AAII sentiment survey revealed that 61.9% of investors were doubtful, marking the third highest on record. At the same time, Bullish sentiment was only at 21.8%. According to the reports, Bitcoin dropped under $80,000 on Sunday night, while Ethereum dropped under $1,800. The global crypto market cap fell 10% to $2.57 trillion.
Kobeissi warned that the market drop was likely close to reaching “capitulation,” but added that any recovery would be short-term and based on strategy, not long-term improvement. It noted that even the most severe bear markets face temporary recoveries.
Markets are now waiting for Monday’s U.S. open and new inflation data set to be released later in the week to decide the next market direction or next step.
Read also:- Biggest Crash Since 2020: Stocks Plunge, Bitcoin Stands Strong
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