11.03.202513:14 Forex Analysis & Reviews: Black Monday on Wall Street. US stocks lose $4 trillion in market capitalization

S&P500

Market review on March 11

US stock market suffers a crash. $4 trillion lost, but game not over yet

Performance of benchmark stock indices on Monday:

• Dow: -2.1%
• NASDAQ: -4%
• S&P 500: -2.7%
• S&P 500 trading at 5,614 (range: 5,400 – 6,000)

The stock market opened the new week with a sharp plunge following Friday's rebound. Technical factors played a key role, as the Nasdaq Composite (-4.0%) moved deeper into correction territory (10% below its peak), and the S&P 500 (-2.7%) once again fell below its 200-day moving average (5,734). This marks the first time the index closed below this critical level since November 2023, now sitting 8.7% below its all-time high.

Another major driver of the sell-off was ongoing concerns about economic growth after President Trump stated in a weekend interview that the economy is in a "transitional period", while refusing to directly address whether the national economy could enter a recession.

The sell-off in mega-cap stocks also contributed to overall heavy losses. Tesla (TSLA 222.15, -40.52, -15.4%) plunged 15% after Bloomberg reported that its sales struggles in China, while UBS cut its price target on the stock from $259 to $225. Tesla has now lost 53.7% from its record closing price of $479 on December 17.

NVIDIA (NVDA 106.98, -5.71, -5.1%), Microsoft (MSFT 380.16, -13.15, -3.3%), and Apple (AAPL 227.48, -11.59, -4.9%) were also among the biggest losers among high-tech giants. The disappointing price action itself became an additional catalyst for further selling, triggering more bearish momentum across the market.

Nine out of 11 S&P 500 sectors closed lower, while the equal-weighted S&P 500 dropped 1.4%. However, a few individual stocks managed to avoid the selling pressure due to specific catalysts. Redfin (RDFN 9.77, +3.95, +67.9%) surged after news broke that Rocket Companies (RKT 13.35, -2.42, -15.4%) is acquiring RDFN for $12.50 per share in a stock-swap deal. Expand Energy (EXE 99.09, +3.06, +3.2%) also outperformed after it was announced on late Friday that the company would replace FMC Corp. (FMC 41.58, +0.29, +0.7%) in the S&P 500, effective before the market opens on Monday, March 24.

Treasuries rally amid stock sell-off

US Treasuries saw strong demand as a safe haven against the market collapse, reflecting growing economic concerns.

The bond rally pushed the 2-year yield to its lowest close since early October, while the 10-year yield dropped back below its 200-day moving average (4.234%).

The economic calendar for the US was empty on Monday.

Year-to-date market performance:

• 10-year Treasury yield fell by 10 basis points to 4.21%.
• 2-year Treasury yield also dropped by 10 basis points to 3.90%.
• Dow Jones Industrial Average: -1.5%
• S&P 500: -4.5%
• S&P Midcap 400: -6.4%
• Nasdaq Composite: -9.5%
• Russell 2000: -9.5%

Looking ahead to Tuesday, traders await the following US economic data:

• 6:00 AM ET: NFIB Small Business Optimism Index (February) (Previous: 102.8)
• 10:00 AM ET: JOLTS Job Openings (January) (Previous: 7.6M)

Energy market update

Brent Crude is trading at $69.40 per barrel. Oil prices remain under selling pressure due to the sharp US market crash and economic concerns. However, interestingly, despite the market turmoil, oil held steady and did not experience a significant drop, finding strong support at $69.

Conclusion

What we are witnessing in the US stock market appears to be a strong correction, but nothing more for now. The US economy remains resilient – the ISM Services Index for February came in above expectations, which is critical as services account for 65% of the US economy. Meanwhile, unemployment remains low.

I believe a strong market rebound will follow with a target for the S&P 500 at 6,000. Holding long positions near key support levels remains a reasonable strategy.