US stock indices, led by a collapse in NVIDIA, staged their biggest intraday reversal since April. Hawkish Fed comments and warnings about Japan's intervention added to global risk-off sentiment in Asia, with the Hang Seng hitting a 4.5% weekly loss.
Bearish reversal in US indices, Japanese yen stabilises, no safe haven demand for gold
Key takeaways
- NVIDIA-led reversal smashed sentiment: A sharp intraday collapse in Nvidia erased its post-earnings rally and triggered the biggest US stock market reversal since April, dragging major indices, the S&P 500, Nasdaq 100, Dow, and Russell 2000 into broad losses.
- Hawkish Fed rhetoric amplified the sell-off: Comments from Fed officials signalling concern over inflation and cautioning against further rate cuts added to the risk-off tone.
- Asia mirrors the downturn; the yen stabilises: Asia Pacific markets fell in tandem with Wall Street, while USD/JPY eased slightly after intervention warnings from Japan’s finance minister; gold remained weak despite the global risk-off environment.
On Thursday, 20 November, the benchmark US stock indices staged their biggest reversal since April during the onslaught of US President Trump’s “Liberation Day” reciprocal tariffs announcement.
The main bearish trigger was the evaporation of the Artificial Intelligence (AI) bellwether, Nvidia’s ex-post earnings share price gains, where it rallied by 5% intraday before a wave of relentless selling took place at mid-US session yesterday. Nvidia ended Thursday’s US session with a loss of 3.2%, wiping out almost $400 billion in market capitalisation from its intraday high.
Similar bearish movements were observed in the S&P 500 and Nasdaq 100, where both initially rose by 2% and 2.4%, respectively, before all gains were wiped out, ending the US session with losses of 1.6% and 2.4%, respectively. The Dow Jones Industrial Average (-0.8%) and small-cap Russell 2000 (-1.8%) were not spared from the rout.
In addition, a slew of hawkish speeches from Federal Reserve officials Barr, Hammack, and Goolsbee, which signalled discomfort over inflation and cautioned against further interest rate cuts, also reinforced the bearish sentiment in the US stock market.
In today’s Asia session, Asia Pacific stock markets have moved in bearish synchronisation with the US stock market. Japan’s Nikkei 225 dropped by 2.4%, and Hong Kong’s Hang Seng Index extended its losses and looks set to end the week with a loss of 4.5%, its worst weekly performance since October 2024.
In the FX market, the US dollar pared back its prior gains in today’s Asia session, with a minor loss of 0.1% seen in the US Dollar Index. The recent weakness in the Japanese yen has also started to stabilise after the USD/JPY rose to an intraday high of 157.89 on Thursday, 20 November, before slipping by 0.2% to trade at 157.16 intraday at the time of writing.
Japan’s finance minister, Katayama, issued a stern warning about the yen’s rapid slide, signaling that FX intervention remains on the table to counter further weakness. The key resistance zone for USD/JPY sits at 158.35/158.80, the same area where Japan previously intervened in April and July 2024.
Gold (XAU/USD) is showing no safe-haven demand despite the risk-off tone in global equities. The metal continues to struggle below its short-term resistance at US$4,110/4,133 and has extended its decline by 1.1% to trade near US$4,030 intraday.
Our YouTube video above contains the latest intraday technical analysis on the US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
