Sudden late-night drop! Overseas risky assets collectively plummeted! What happened?

Market risk appetite has declined!

On February 4th, early morning Beijing time, the three major U.S. stock indices all fell, with the Nasdaq dropping over 1%. Technology stocks declined across the board, with Micron Technology down over 4%, Nvidia and Microsoft down nearly 3%.

The more speculative cryptocurrency market also plunged again. Bitcoin once plummeted 7% during trading and broke below $73,000. As of press time, Bitcoin and Ethereum are down nearly 4%, and Solana has fallen over 5%. Data from Coinglass shows that in the past 24 hours, total crypto contract liquidations across the network exceeded $700 million, with 169,800 traders liquidated.

Major U.S. Tech Stocks All Adjust

On Tuesday, the three major U.S. stock indices all tumbled, with the Nasdaq dropping over 2% intraday, the S&P 500 falling more than 1.6%, and the Dow Jones dropping over 1%. By the close, the Nasdaq was down 1.43%, the S&P 500 down 0.83%, and the Dow down 0.34%.

Most large U.S. tech stocks declined, with the Wind U.S. Tech Seven Giants Index falling 1.62%. Individual stocks included Nvidia and Microsoft down nearly 3%, Facebook down over 2%, Amazon down nearly 2%, Google down over 1%, Apple down 0.2%, and Tesla up a微小 0.04%. Other stocks saw declines, with Micron Technology down over 4%, Oracle and Qualcomm down over 3%. Additionally, software stocks continued to decline, with ServiceNow down 7% and Salesforce down 6.85%.

Nvidia CEO Jensen Huang denied rumors of a change in deal with OpenAI on Tuesday. In an interview with the media, he clearly stated that the company’s investment plans in OpenAI are still “progressing as planned,” denying recent market rumors of tension between the two. He emphasized, “There is no controversy at all; these claims are pure nonsense… Nothing dramatic, everything is proceeding as scheduled… We are very happy to cooperate with OpenAI.” Huang further confirmed that Nvidia will participate in OpenAI’s next round of funding, which he called “the largest private placement in history.”

Josh Brown, CEO of Ritholtz Wealth Management, said, “I think these kinds of markets happen once or twice a year. The triggers are always different, but the result is always similar — the most popular trades during the previous rally are thoroughly hit. Risk appetite is pulling out of all tech-related sectors.”

Currently, U.S. policy uncertainty remains high. The U.S. Bureau of Labor Statistics (BLS) announced that due to a partial government shutdown, the non-farm employment report scheduled for Friday will be delayed. BLS Deputy Director Emily Lidel stated in a release, “The January 2026 Employment Situation Report will not be released as originally planned on February 6 (Friday). The report will be rescheduled after government funding resumes.” It is unclear whether the U.S. Department of Commerce will face delays due to the Washington deadlock. This decision comes during a week packed with economic data releases, with the non-farm employment report (also known as the unemployment report) expected to be the highlight.

According to CME’s “Fed Watch,” the probability of the Federal Reserve cutting interest rates by 25 basis points by March is 8.9%, with a 91.1% chance of holding rates steady. The probability of a cumulative 25 basis point cut by April is 22.5%, with a 76.0% chance of no change, and a 1.5% chance of a cumulative 50 basis point cut. By June, the chance of a 25 basis point cut is 46%.

Cryptocurrency Market Plunges Across the Board, Nearly 170,000 Liquidated

As market risk appetite declines, the cryptocurrency market has also plunged again. As of press time, Bitcoin is down 3.78% at $75,800, Ethereum down 3.88% at $2,260, Solana down over 5%, XRP down nearly 2%, and BNB, ADA, and other tokens down over 1%.

The largest market cap cryptocurrency, Bitcoin, continues its nearly four-month downward trend. On Tuesday, Bitcoin once fell 7% to $72,877, the lowest since November 6, 2024, then recovered to around $76,000 in the afternoon New York time. Currently, Bitcoin has declined nearly 14% year-to-date.

Data from Coinglass shows that in the past 24 hours, total crypto contract liquidations exceeded $741 million, with 169,800 traders liquidated. Long positions accounted for $538 million, and short positions for $203 million. The largest single liquidation occurred on HTX-ETH-USDT, valued at $8.4038 million.

Bohan Jiang, senior derivatives trader at FalconX, said, “Many traders are trying to buy the dip, betting that Bitcoin will rebound above $80,000. But as Bitcoin continues to decline, many of these positions are being forced to close, putting further downward pressure on the price.”

Bloomberg pointed out that although the White House’s attitude toward crypto remains friendly and institutional adoption is rapidly increasing, Bitcoin has already fallen about 40% since reaching a record high in early October last year. This recent crash was triggered by a severe chain liquidation caused by Trump’s additional comments on tariffs on October 10, which wiped out $19 billion of leveraged tokens in the crypto market that day, and has yet to recover.

Bitcoin’s latest decline comes amid intense market volatility, especially after last weekend’s historic plunge in precious metals following an astonishing rally. On Tuesday, the S&P 500 retreated from near record highs amid tech stock sell-offs, while gold and silver rebounded, and oil prices surged due to rising geopolitical risks.

For Bitcoin, the crypto derivatives market indicates further weakness may follow, and there are currently no clear positive catalysts.

Augustine Fan, partner at crypto options platform SignalPlus, said, “Market sentiment in crypto has hit rock bottom. After more than a year of declining volatility, traders rushing to hedge have finally pushed volatility higher, and the market is in a bear phase. The all-time highs are now a distant memory.”

While some institutional holders remain steadfast, the participation of retail investors is waning as large long-term holders sell assets worth billions of dollars.

(Source: Securities Times)