• Still doing nothing, Xiaomi didn’t fall below my current price level. It has fallen consecutively for two days, and was finally stabilized by a buyback. The US market last night was interesting – it started to rally, but the next day it completely crashed. Today, both A-shares and Hong Kong stocks are basically worthless.
• At this point, falling so much is actually good; I didn’t continue following the broader market, just laid down and relaxed, waiting for a better opportunity.

Why the Decline

https://wallstreetcn.com/articles/3759889 Other viewpoints may or may not be correct; quantitative funds are increasingly influencing domestic stock markets. Individual stocks often closely align with index movements. The original text is lengthy, and Bobo (豆包 - a common online nickname) has extracted the core content.

In November 2025, global risk assets will experience a major decline. According to Rich Privorotsky, a senior trader at Goldman Sachs, this downturn was the result of multi-layered transmission and ultimately evolved into systemic selling, driven by four key factors.

Fed Shifts to Hawks: The Starting Point of the Downtrend

Recent employment data presents contradictory signals: job growth remains robust, but the unemployment rate has risen to 4.44% (primarily due to a surge in 16-24 year olds entering the workforce), and three-month average new hires only totaled 62,000, with potential new hires at just 39,000. August data was also revised downwards. Adding to this, there’s a trend of corporate layoffs, leading market expectations for the Fed to adopt a dovish stance. However, the Fed has maintained a hawkish tone, effectively withdrawing bets on December rate cuts, with the probability of cuts now essentially zero – triggering the first domino in the downward slide. Privorotsky bluntly stated that this hawkish position in light of the employment backdrop is a “policy error.”

AI Narrative Restructuring: Google Drives a Winner-Takes-All Landscape

Key logical divisions are emerging within the AI sector, with Nvidia’s strong financial results no longer making it the core investment focus. Google’s breakthrough progress with the Gemini-3 model is reshaping the AI investment ecosystem. This “disruptive model” has forced other companies to delay product cycles and increase capital expenditures, leading to increased uncertainty regarding returns on investment, resulting in companies like Oracle failing to follow the upward trend. A distinct “winner-takes-all” landscape is forming within the market, shifting AI from a broad “adoption” phase to one dominated by a select few, triggering adjustments across related sectors.

Crypto Flash Crash: Retail Investor Risk Appetite Declines

The volatile swings in the cryptocurrency market triggered a chain reaction. Retail investors, who had steadfastly held their positions over the past two years – often referred to as “diamond hands” – have transitioned into “selling hands” due to factors such as large-scale dumps by whale accounts. This panic sentiment spilled over into non-profit tech stocks and AI-related equities, exemplified by Palantir, which plummeted 6% during trading hours after rising 5.5%, marking a significant downgrade in retail risk appetite and a fundamental shift in market structure.

Quantitative Funds Selling Off: The Key Driver of Accelerated Decline

Since August, trend-following funds (CTAs) have held over $500 billion in long positions, triggering concentrated liquidations after the index broke key levels. Simultaneously, rising volatility prompted volatility control strategy funds to sell off, compounded by capital flows into VIX ETNs creating a “short-tailed, short-convex” allocation, which amplified the downward effect. The previously stable “low volatility structure” collapsed, with quantitative and systematic funds initiating a “mechanical selling,” leading to a sudden and significant plunge in the market without any major events.

Fundamental Concerns and Stabilization Conditions

From a fundamental perspective, AI investment faces a “capital bottleneck”: a wave of corporate bond issuance is imminent, with AI data centers relying on debt expansion, while rising capital costs may slow down the pace of AI expansion. This risk has not been fully priced in previously. Goldman Sachs predicts that the S&P 500 mini contract could fall to 6500 points, and believes that the long-term value of AI remains unchanged; true winners are labor-intensive companies that achieve margin expansion through automation.

Market stabilization requires fulfillment of three conditions: CTA position liquidation is complete, retail investors with excessive long positions have been squeezed out, and at least two of the following conditions are met: cryptocurrency stability, a dovish Fed policy shift, and AI capital expenditure support.