$2.5T has been wiped from US stocks

Posted by madihaa 1 day ago

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Comments

Comment by foolswisdom 1 day ago

For all the federal election related takes, remember that

1. Market price changes are changes from what was expected before compared to what is expected now. And not even only in regards to the asset itself, but with respect to comparative change in other assets as well. 2. conventional wisdom when the branches of government are divided, less change comes from the government, so you can expect that your expectations for the future will remain stable, and that confidence reduces risk aversion, resulting in higher pricing.

Therefore, the market going down cannot be attributed purely to a question of who is in charge, because the democrats can't pass anything unless they get a nice number of Republicans on their (possible I suppose, but I don't think anyone is expecting that right now). But it could be attributed to expectations of what Republicans would do vs now that they can't.

Besides, it's basically impossible (or at least for layman, who knows if you're a market maker?) to accurately attribute a day's market behavior to any event, with a compelling causal explanation (sometimes your attribution could also be explained to have the opposite effect than the one you're trying to explain) and not ignoring alternate possible explanations.

It's kinda annoying when even otherwise serious people invoke the market movement of a day as an meaningful event that can be explained (notwithstanding that by tomorrow the effect might have reversed). But unfortunately business news like CNBC promotes that kind of thinking.

Comment by foolswisdom 1 day ago

It's still quite possible that all the non federal items on the ballot (lots of anti data center referendums, lots of democrat politicians in state office) matter quite a bit.

Comment by neuroelectron 1 day ago

[flagged]

Comment by foolswisdom 23 hours ago

That's exactly why it's an AI correction! Because they've been betting on (increasing?) velocity, which was always going to come to halt sometime, but this election is abrubtlu interrupting. Changes in expectations, even if the business were to remain good, is bad in valuation.

Comment by yojo 1 day ago

State government leadership did change in unexpected ways, and they do get to pass laws. See: Texas

Comment by foolswisdom 1 day ago

Yes. I actually hadn't read the article before commenting because initially the link was to the Reddit thread. The data center buildout slowing, with Texas (among others) blocking otherwise expected to be built data centers is probably a significant justification for re-evaluating the business.

Comment by SteveNuts 23 hours ago

The "planned" capacity in Texas represented over 40% of the total power generation of the entire USA, how did the market think that was going to get built even without moratoriums?

Comment by DivingForGold 21 hours ago

Maybe they planned literally THOUSANDS of "walkaways" or "wheelhouses" with horses or cattle going round and round in circles powering generators, every 4 hours new, fresh horses go online and the previous go to pasture to eat more grass.

Grass / weeds to data center power conversion achieved !

Comment by ted_bunny 8 hours ago

Thinking is a disadvantage when you're playing Hot Potato

Comment by mminer237 23 hours ago

$2–3 trillion dollars would honestly be about the right price to do that.

Comment by Freedom2 22 hours ago

Curious to see your working out for that statement, if you have it handy.

Comment by dylan604 23 hours ago

> how did the market think

Wait, what? When does the market think at all?

Comment by shimman 23 hours ago

If your business is this faulty that you have to rely on subverting democratic norms maybe you don't deserve to run a business in said society.

Comment by gottorf 22 hours ago

> If your business is this faulty that you have to rely on subverting democratic norms

I'm not seeing the relationship between building datacenters and subverting democratic norms. Could you explain?

Comment by ferrouswheel 21 hours ago

the people building datacenters don't want to go through the normal process. they want special exceptions to do whatever they like and put the externalities on other people.

Comment by pixelatedindex 19 hours ago

My take is that they get subsidized energy prices and the average person is going to pick up the tab. That doesn’t seem very fair.

Comment by dylan604 23 hours ago

It's worked out quite well for social media, so why not AI?

Comment by bdhe 22 hours ago

Did social media REQUIRE to subvert democratic norms or is it just that social media was so good/powerful that it ended up inadvertently hurting democratic norms and that social fabric?

I didn't think your Facebooks and Twitters required shady data center deals and circumvention to actually establish a viable business model.

Comment by serf 19 hours ago

>I didn't think your Facebooks and Twitters required shady data center

there were years of debate on whether or not a lot of the things early social media groups did constituted violations of, and not limited to : FTC Act Sect 5, the electronics communications privacy act, the CFAA, the video privacy protection act, and us state privacy laws from coast to coast.

they just did what they wanted, lawyered up, got big enough to lobby, and became legal ..

point is, these groups aren't stranger to 'shady deals'.

Comment by bdhe 17 hours ago

Fair point.

Comment by krapp 22 hours ago

Neither. Governments and other politically aligned entities realized social media was useful and it was intentionally used to hurt democratic norms and the social fabric. It was neither an accident nor an intentional part of their business model (with Facebook being a possible exception.)

It's heresy to say here but related content algorithms aren't inherently evil.

Comment by rconti 1 day ago

It's interesting.

The market should have already priced in an almost-certain Democrat takeover of the House, and a 75% chance of takeover of the Senate.

And yet the markets rallied hard the day after the election. Why?

* Maybe it was responding positively to the scale of the Democrats' win, for whatever reason.

* Maybe it was the removal of uncertainty.

* Maybe it was reacting positively to the fact that there weren't massive irregularities, lawsuits, chaos, extended vote delays, etc.

But then flipping even harder negative the day after is even harder to explain purely in electoral terms. Maybe it was just time.

Comment by foolswisdom 23 hours ago

I've wondered the same. But nevertheless that 75% probability becomes more of a certainty after the election, combined with all the smaller elections and ballot proposals that came in anti data center. Besides, there is always some uncertainty around the polls these days, and there's a bias towards not moving your money (for tax reasons if nothing else). But I'd love to hear from someone who works in the industry.

Comment by gottorf 22 hours ago

> And yet the markets rallied hard the day after the election. Why?

> * Maybe it was the removal of uncertainty.

Impossible to explain why the market does what it does on any given day, but almost certainly that was a mechanical response of reduced uncertainty and hedges being unwound as a result of that.

Comment by bentt 19 hours ago

Feels like blind optimism that the country is still capable of governing itself led to the rally, and then a whole bunch of profit taking.

My guess is this levels off after a week.

Comment by ksaj 13 hours ago

I agree that it'll probably level off soon enough. Traders seem to be trigger happy after elections. Pretty much every time. AI is not going away. Too many people already consider it "the norm."

Comment by gruez 23 hours ago

>and a 75% chance of takeover of the Senate.

Maybe if you were looking at the most optimistic forecasts. Most forecasts and betting markets had it at 50-50

Comment by foolswisdom 23 hours ago

I think the days before the election polymarket had it at 75% no? Which I guess is also about when the AI stocks started sliding.

Comment by lovich 20 hours ago

Is poly market now the gold standard over polls?

For public elections and not situations where a handful of people in the White House can make massive bets prior to an executive decision using insider trading knowledge?

Comment by gruez 14 hours ago

>using insider trading knowledge?

1. What type of insider knowledge is the people in the white house supposed to have, except maybe some early dibs on some pending scandal?

2. If you're interested in the best probability estimates, using insider information is the way to go, even if it feels icky. The bigger issue is motivated people who want to manipulate the market to push a specific narrative.

Comment by lovich 11 hours ago

What kind of knowledge do the people who decide when certain events happen, that others don’t have?

Is that a real question?

Comment by foolswisdom 11 hours ago

Well, to me the gold standard in modeling is FLIPPR, which had the senate at 75% before polymarket did. And ultimately polymarket numbers may represent the opinion of (less expert?) modelers betting on the results (or that's nate silver's opinion anyway).

Comment by rconti 26 minutes ago

I think the betting sites and Nate Silver's flipper had it around 75%. Seemed the conventional wisdom was that it was actually closer to 80% but everyone was too afraid to say it :D

Comment by B4uler5 23 hours ago

I can never tell if the market’s movement has anything to do with the actual news cycle or is that just analysts ascribing their finger in the air analysis to things they only vaguely understand.

I remember one time essentially reading from a market watch article that the market was up because it was a Tuesday and people feel real good about Tuesdays.

Comment by dylan604 23 hours ago

Better than Thursday. Never got the hang of Thursday

Comment by foolswisdom 23 hours ago

LOL!

Comment by mgh2 1 day ago

Wait for 40% downside: https://www.youtube.com/watch?v=HfcDQ7JVnzQ

Nvidia can be down to 3-3.5T market cap from 5-5.7T heights

Comment by sjdh76 20 hours ago

Weather also can be kind of annoying. We might as well be talking to the clouds. "Serious people" have no big reason to be in alignment. Thry can also display opporunistic, parasatic and status signalling behavior that benefts them more than others. Add population scale. Add social media noise/info overload factory. Add attention exploitation mechanisms. What do people control about it - nothing. Unless you live in China.

Comment by tw04 17 hours ago

I think the most fascinating part about the whole thing is the complete and utter disconnect between the average American and the average HN contributor.

I hate to break it to you, the average American who just voted the way they did didn’t give a single crap about the market today. If they own any stock at all it’s not enough to move the needle in their daily lives. They care about the price of gas, the price of electricity, and if some rich Silicon Valley executive (likely hanging out here) is trying to take advantage of their small town community.

“Oh no, did a number in a spreadsheet go down for some rich guy? And?”

Comment by dist-epoch 23 hours ago

Only those who never traded the stock market for real (like financial journalists) believe that you can attribute news to a market event.

"The market went down because the Fed increased the rate"

Comment by schnuri 1 day ago

I always find these market cap numbers misleading. The US stock market isn't "worth" $2.5T less. If you multiply the marginal share price by the total number of shares, you get a number that's $2.5T lower. That is something different. E.g., if you tried to sell all Nvidia shares at once, you'd never get anywhere near ~$4.5T (just as buying them all would cost far more).

Comment by smallmancontrov 1 day ago

> if you tried to sell all Nvidia shares at once

That is something different: liquidation value. Market cap tells you the sum total of the numbers next to this ticker symbol in everyone's brokerage account. It tells you the collective expectations about future returns and also the wealth effect that people feel based on their ability to individually obtain cash for shares.

It is true that neither of those things is liquidation value, but also liquidation value is neither of those things. If you expect a liquidation scenario, sure, use liquidation value. If you don't expect a liquidation scenario but want to measure collective expectations of and confidence in a stock, use market cap.

Comment by jwpapi 23 hours ago

but it’s still so wrong. Like if I fund a company and I sell 1% to my mum who really believes in me for 100.000 USD I’m suddenly worth almost 10 million and the market cap of my company is 10 million, even though nobody might even pay a penny for my company. I don’t think most people are aware that this is how it works and crypto currencies have abused this a lot, by just selling a part of their shares, creating scarcity in the market and reaching high market caps. The traditional financial market is not that much different I feel like.

If Elon Musks sells all his shares the value of SpaceX and Tesla would drop dramatically I don’t know how much realistically he would be able to liquidate from his shares.

So the headline "is wiped" is misleading. I think it’s all ultimatively to get money in the markets and support growth

Comment by smallmancontrov 9 hours ago

Many simplifying financial concepts only apply to liquid markets. Market cap is one of them. The entire notion that a stock can have a price is another (if liquidity is low, you need to sweat the order book). Our modern financial system has opted to use these simplifications and limit casually-accessible trading to times of day (and days of week and options strikes and expirations etc) with enough liquidity to support the simplifications.

The alternative would be to gate everything behind the more sophisticated concepts and limit access to people who had demonstrated competence -- and that's exactly what we do for illiquid markets. It's not like exchange servers turn off at 4pm, if you want to step outside the high-liquidity kiddie pool after-hours and OTC trading exist. However, I am not scandalized that the kiddie pool is full of toys and you shouldn't be either.

Comment by jwpapi 5 hours ago

I mean there definitely have been people exploited by these numbers. It doesn’t hurt to let people know.

Comment by tyrabound 23 hours ago

The point is still appropriate and relevant. I would have probably described it more like the same kind of con of American retailers that constantly run 80% off sales, which they come to by staking the fake sale percentage to a fake, fraudulent, made up number that the majority of the goods never sell for, i.e., MSRP.

Same clownish nonsense with this OP story, the S&P is still up 7.5% YTD, all that was lost is fabricated made up numbers on paper/screens. Now, if people sold stock and booked $2.5T in losses, then call me out please.

I can't stand the constantly lying, fraud, conning, and gaslighting. Maybe the market will drop more, maybe the counterfeit dollar market will go up. But reality is that noting is lost or made until you sell.

Comment by mminer237 23 hours ago

A huge volume of stocks are traded at market price every day. I don't think that's a dishonest valuation at all.

Comment by scotty79 14 hours ago

Valuation is a terrible name for that number because this number has nothing to do with value and everyone knows that. Everyone knows that if shares were sold by their current owners, their income wouldn't be anywhere close to that number. So a company value is a ridiculously small fraction of that number and absolutely impossible to determine from it.

Comment by adam_arthur 1 day ago

What something's worth is what somebody is willing to pay for it.

And conventionally, we use the marginal buyer's bid as the measuring stick for public companies. e.g. the share price

Of course, the intrinsic value based on currently known data/fundamentals is unchanged.

But many market valuations are disconnected from that to begin with. Loans, options, warrants, many things are tied to the market cap/share price of a company. E.g. what is the LTV ratio when lending? What are my RSUs worth?

Comment by smallmancontrov 1 day ago

> What something's worth is what somebody is willing to pay for it.

This is completely and definitionally true in the context of trading, but keep this definition on a leash because if you apply it outside a purely financial context it tends to smuggle wealth-weighted objectives into your thinking, and regardless of whether or not you think that's moral you probably want to be aware of it. Example: feeding orphans is zero "value" because they can't pay you but merging the banks into a mega-bank to raise fees and collect bailouts has extreme "value" because it can make a bunch of obscenely rich shareholders even more obscenely rich and they can carve you off a mighty slice.

Due to this mismatch I keep both definitions in my pocket: Wealth Weighted Value for finance, People Weighted Value for more colloquial settings or moral analysis. "Exchange Value" is a good quasi-synonym for WWV if you want something less confrontational.

Comment by wat10000 1 day ago

The point is that market cap doesn’t tell you what people are willing to pay for a company. When a stock price is $100, that means people are willing to pay $100 for one share. And then because big companies have a big market for their stocks, this can be extrapolated out to a few thousand or millions of shares without much loss of accuracy. But it falls apart when you go beyond a small fraction of outstanding shares. A $100 price may mean people are willing to pay $100 million for a million shares. But it probably doesn’t mean people are willing to pay $1 trillion for ten billion shares. At some point the marginal willingness to pay will shift.

This becomes visible in buyouts where the cost of acquiring a company is significantly higher than the share price multiplied by number of outstanding shares.

Comment by jwpapi 23 hours ago

its literally the upper bound.

Comment by wat10000 22 hours ago

You mean lower bound? The market cap is the minimum you could pay to acquire that company at that moment, but you’d almost certainly have to pay more.

Comment by jasomill 6 hours ago

Depends on whether you’re buying or selling.

Comment by danielmarkbruce 20 hours ago

Tell that to someone doing a buyout...

How does one talk so confidently about something they know nothing about?

Comment by jwpapi 9 hours ago

its the upper bound to value. Net worth is calculated as market cap of your assets, but look at Elon Musk. Right now there’s not enough people to buy his net worth his liquidation potential is drastically lower than his net worth. Ergo it’s a lie. Some people understand that, most don’t. It’s abused and marketing in some cases.

Comment by danielmarkbruce 6 hours ago

Nope, wrong. Go try to buy a whole company and see if you can get it for less than the current quote. You can't. Every buyout is done at a premium.

You are out of your depth.

Comment by jwpapi 5 hours ago

That is price not value.

the market cap is described in USD, but don’t get equal value of it and you definitely don’t get more.

If somebody would buy it for more, he would have already.

If somebody has a car and he gets 30_000 USD for it, that’s the value of it. If somebody wants a cart and he can get it for 30_000 USD that’s the price.

How do you plan to estimate value if you estimate it at the price somebody might pay for it in the future. It’s proofing too much.

Comment by danielmarkbruce 5 hours ago

> If somebody would buy it for more, he would have already

Have you not noticed all buyouts are at a premium?

To repeat - you are just miles out of your depth here.

Comment by jwpapi 5 hours ago

Ad hominem.

I’m aware that buyouts happen at a premium, but I state that this is not a valid argument to conclude market cap => value. If that statement would be true. Every share would be worth infinite money, as theoretically a buyer could show up and bid for infinite money.

Comment by danielmarkbruce 5 hours ago

Nobody said market cap is > value. You seem to misinterpret basics. Buyouts happen at a premium because you can't buy all the shares at last trade or current offer or anything of that nature. You can't sell them all at last trade or current bid or anything of that nature either.

So, we are left with the last trade, or the mid point of the bid/offer, as the best proxies. It is what it is.

Comment by ghshephard 1 day ago

On the flip side - if you wanted to buy all of NVIDIA shares - you would have to pay more than $4.5T - likely 20-25% premium. So this cuts both ways.

The peer-comments about the market cap being representative of the expected value, or present-value of cash-flows with some discount / risk adjustment are on point. (which implies that the change in market cap might be a change in cash-flows, change in discount (typically FedRate) or risk)

Comment by danielmarkbruce 1 day ago

People in finance have largely (and correctly) agreed that the marginal buyer and seller represent the best guess for the value of the business with very few exceptions. There are various flaws with this, but you won't come up with a better method, I can guarantee it.

Comment by jwpapi 23 hours ago

People in finance all profit from the same scheme.

I can come up with one right now. Instead of calculating it from the last price calculate it from some deepness in the order books. Realistically you cant drop just shares without moving the market so no company can just get 10% of shares dropped without losing a lot more in price impact. We only look at a small part of the market and the last price is practically the highest somebody on the world would pay for one more share. Nobody is buying for more. So its a upper bound not a good estimation.

Comment by danielmarkbruce 20 hours ago

This is a stupid suggestion. Go deep in the order book in which direction? There are both sell and buy orders. Last trade was both the highest someone would bid and the lowest someone would offer, by definition. Every trade is that.

Leave finance to people who have a clue.

Comment by jwpapi 9 hours ago

Like if i have 1 million in cash do i have equally 1 milion value of shares in all companies because I could buy those?

Comment by carlosjobim 21 hours ago

The last price is also the lowest value that anybody in the world would sell one share for. Incredible that people never get this when it's the most basic thing: Every trade has somebody buying and somebody selling.

Comment by jwpapi 9 hours ago

If I have 1 billion dollar in cash I can buy stuff for that 1 billion. If I have '1 billion' in stocks of one company I can not trade that 1 billion into cash. It is therefore not worth 1 billion.

Comment by danielmarkbruce 6 hours ago

If you have 1 billion in cash, you cannot buy a company where the market cap is $1 billion. You'll have to pay significantly more.

You seem to completely misunderstand that most shares are held by people who won't sell at the current price. To them - real owners who have put money to work - the current price is a floor.

And at some point you will go back and forth and realize: last trade is the best guess on true value, even if it's wrong sometimes.

Comment by jwpapi 5 hours ago

but nobody bought it at that price. Nobody even bought it for 1usd more than last price and nobody bids at 1 tick below lowest ask.

Like go to any illiquid markets on polymarket and your fallacy becomes very obvious.

Last Price x Shares is not a perfect proxy to estimate the value of holdings it has <1 elasticity.

Comment by danielmarkbruce 5 hours ago

> Last Price x Shares is not a perfect proxy to estimate the value of holdings it has <1 elasticity.

Nobody said it was a perfect proxy. Just the best proxy. The elasticity goes both ways - you can't sell all shares at current price, can't buy them all either.

Comment by jwpapi 5 hours ago

I don’t think its the best proxy either. A proxy with elasticity <1 would be better. As again you keep arguing price to buy determines value. And I strongly disagree to me value is what I can do with it now.

When I check Google’s definition:

Market capitalization (often called market cap) is the total dollar or currency value of a publicly traded company's outstanding shares of stock.

But the dollar value is =/ the same amount in cash, as I can’t buy the same things as I can buy with cash.

What I’m not certain about is if that’s for the greater good. Put capital to work or for the greater loss, crypto hype rugpulls?

Comment by danielmarkbruce 5 hours ago

Then come up with a better proxy, that takes into account buyers and sellers and a real order book.

Again, nobody said "price to buy determines value" - the argument is that last trade (or midpoint of bid/ask) is the best proxy for value. Not a perfect one.

Comment by aeternum 23 hours ago

So how do you measure the market cap of a company in a less misleading way?

Comment by 1 day ago

Comment by notSupplied 23 hours ago

That same flaw applies to the category of "billionaires".

You can't just take the marginal share price and multiply by the total number of shares to magically get a number that is conceptually equivalent to your normie's brokerage or 401K account: A normie can liquidate their portfolios tomorrow at the market price, but no billionaire can.

Comment by jwpapi 23 hours ago

[flagged]

Comment by hacker_9 1 day ago

I agree, its such a pet peeve of mine these sensationalist headlines. The price gets bid up, majority of shares were mostly bought at cheaper prices, but when there's a drop it's still 'new price x existing quantity' which means we lost X trillions.. Yet it never existed in the first place!

Comment by curiousllama 1 day ago

2.5T sounds impressive, but less impressive next to 82T total market cap

Comment by refurb 21 hours ago

But your argument can be applied to anything.

Say my car is worth $15,000. But you could say “if you tried to sell it in the next 4 hours you’d never get that much”. And that’s true.

But nobody prices cars based on what you could sell them for in the next 4 hours because the market doesn’t normally transact like that.

Just like no one prices stocks based on how you’d get if you sold the entire market cap at once because the market doesn’t normally transact like that.

Comment by stinkbeetle 1 day ago

That's basically the same as anything that could be bought and sold though. Your house is worth what you could sell it for tomorrow, not an impossibly unlikely tomorrow in which all house owners decided to also sell. I don't even know how or why you would try to value according to some crazy scenario like that, but it would be much more misleading IMO.

Everything is valued in prevailing conditions. Conditions change, and value changes.

Comment by curiousllama 1 day ago

This is definitely scary, but not the end of the world (yet).

The S&P500 is still up ~7% YTD, and 5y CAGR of 9.4% before dividends, in line with historical norms.

This is primarily a decline in tech: week over week, the S&P is -4.5% (SPX), but the S&P excluding tech is +0.1% (SPXT).

Right now, this looks like speculation that tech will reduce capex after Q4 earnings (Nvidia, Micron, Sandisk, AMD all down >2x vs the S&P). But it'll take time to tell; most just announced Q3 a week ago.

All this to say: expect volatility, but no need to panic.*

*(Unless you're in TQQQ. Then panic.)

Comment by masfuerte 1 day ago

In case anyone else was wondering:

TQQQ is the only ETF (Exchange-traded Fund) that targets 3x the daily returns of the Nasdaq-100 Index.

Ouch!

Comment by Gathering6678 20 hours ago

A side note: TQQQ follows 3x intraday return if I remember correctly, but if you buy-and-hold TQQQ (or any other similar products), you will be hit by a lot of friction cost, and the return will be worse than 3x.

Comment by staticman2 1 day ago

It's not scary at all unless you think stocks are a riskless asset expected to always go up and bonds and bank accounts are for suckers.

Comment by everforward 7 hours ago

No, it's probably scary even for those folks.

Most obviously, the economy tanking usually means a recession and unemployment doesn't care what you're invested in.

The long-tail risk is that the US and China are heavily exposed to this risk, and the US gov't is already having to pay out more for bonds. A big hit to the economy could raise that even further, and we're not in the best state as a nation to tackle the intricacies of "we spend more than we can afford to, but we can't afford to borrow more money". That seems likely to end up where France currently is, and they appear to be trending towards a crisis.

Comment by lachlanj 1 day ago

Google got punished in the last few days for too much Capex. So what does the market want, less capex or more capex?

Comment by outside1234 1 day ago

Less Capex, More Profit

Comment by MikeNotThePope 21 hours ago

[dead]

Comment by MSM 1 day ago

There's a lot of conjecture about how the midterms have caused the drop today but I can't help but think it may just be a convenient coincidence. Yesterday was one of the largest bumps of the year and by yesterday it was already known that Democrats were taking control.

Is this just the start of the fall that many people have been predicting for months? Did something materially change in the Democrats' stances or policies since yesterday? Or is something else unwinding entirely?

Comment by CoolestBeans 1 day ago

In fact the Wednesday bump could have precipitated today's correction as traders looking for a nice sale price window found one.

I would put this as part of the larger crunch in the AI trade that started just before earnings season as people digest what margin compression in traditional revenues for the big tech companies means going forward. Just with bigger swings because of the election.

Comment by dylan604 23 hours ago

> In fact the Wednesday bump could have precipitated today's correction as traders looking for a nice sale price window found one.

How do you manipulate the market like that and not get caught?

Comment by AndrewDucker 23 hours ago

That's not market manipulation. That's thinking "There's going to be a crash in the next couple of months, if it goes up to $x then I'll take the profits and cash out"

Comment by hacker_9 1 day ago

April 2025, nasdaq enters bear territory: https://news.ycombinator.com/item?id=43587479

It's interesting reading the panic then in the comments, and yet now the nasdaq is up 65% from those lows, even with today's drop.

Comment by runarberg 23 hours ago

The context is different. We learned about the circular financing deals in Oct 2025: https://news.ycombinator.com/item?id=45473033 and since then most people have been speculating a bubble which has inflated a lot in the year since.

The AI bubble is the background context, but on top of that there is the immediate context Anthropic S1 where we learned what journalists had been speculating for a while that the AI industry is in fact not nearly as large to justify the valuations of AI companies. And finally we have the election where local governments in the USA were elected on the grounds to stop the AI datacenter buildout.

Now with that context in mind the current dip does not look like some random and normal fluctuations in the market.

What is also different, for me at least, is that many of us (including my self) are rooting for the AI bubble to burst. And seeing these signs makes us existed that it is finally (maybe) starting to happen.

Comment by pixel_popping 20 hours ago

Circular deals have always been part of the top companies operations and is absolutely known from a financial perspective since forever, nothing new.

I believe that will continue regardless of regulations, as long as Co Y and Co X is allowed to buy from Co N, then that can't be fixed.

Comment by pixelatedindex 19 hours ago

Scale matters though, right? A few hundred million here and there is vastly different from a few hundred billion. If this means Anthropic won’t IPO, that’s a win I think. Let them exist for another decade, examine the financials and then go public. That way we aren’t being dumped something on irrational exuberance.

Comment by jrflo 1 day ago

Sounds scary until you realize that this happens about once per year on average. If this happens again tomorrow and a few more times in the few couple weeks that would be bad, but as of now it's notable but not a huge deal.

Comment by zer00eyz 1 day ago

Not really - today was a rare and large sell off - last time that was close was 2020 - for the pandemic.

The question one should ask is how far down does it go and if history is any indicator it's not gonna be up from here before the new year (and likely down a bunch more). There is a LOT of over valued stocks still to be cleared out - I suspect the cut is gonna be a lot deeper. The history on this is 2018 for Trumps last midterm and a pending rate hike. Sticky oil prices are gonna drive inflation and the fed raise's the market suffers.

Comment by bwfan123 20 hours ago

> There is a LOT of over valued stocks still to be cleared out

Gigantic amount of debt is contingent on datacenter buildouts and roi on it. All of that suddenly got repriced. This is a catalyst for a multi-year grind-down of the ai-trade. See 2000-2002 for a parallel.

Comment by Tadpole9181 23 hours ago

What do you mean? The NASDAQ dropped the same percentage 4 months ago, close to peak value? And again 6 months ago, below it's current value.

Comment by silverFork 1 day ago

Everybody knew it was coming soon.. Some were waiting for anthropic to IPO first. Markets could not wait because of public sentiment.

Comment by bloggie 1 day ago

If this is related to the election why is it happening today? Weren’t the results called on Tuesday night?

Comment by schmookeeg 22 hours ago

I suppose most people are thinking of that old joke:

"Why are divorces so expensive? Because they're worth it"

As someone not terribly political, all I have is "ouch, my bank balance!" :) but this too shall pass.

Comment by u1hcw9nx 1 day ago

Last time this big wipe happened was just 19 months ago.

Comment by pjdemers 1 day ago

Inflation. When inflation is high, people want change. The democrats won because voters rejected inflation. (Which is the same reason Trump won in 2024, BTW, inflation was high, so voters wanted change). Anyway, if the democrats want to keep power in 2028, they have to deal with inflation, and deal with it hard and fast. That means (much) higher interest rates, lower government spending, and, possibly, tax increases. All of these make stocks go down.

Comment by alex43578 23 hours ago

There is no chance we will see lower government spending. Neither party is anywhere close in policy to what needs to be done to correct our spending problem.

Comment by anon7000 15 hours ago

Especially when the president is forcing us into exceptionally costly wars and other programs seemingly with minimal congressional involvement.

Comment by alex43578 11 hours ago

It’s not better for the country if congress signs off on it either, though. 8+ trillion under Biden is a disaster. 7+ trillion under Trump’s first term is a disaster. Obama’s combined 9 trillion is a disaster.

Comment by zmmmmm 1 day ago

it never really existed

Comment by BatchJob 20 hours ago

And its only the beginning....

Comment by JohnTHaller 23 hours ago

Nearly $7 trillion down in the last month

Comment by ChrisArchitect 1 day ago

Related:

Nasdaq plummets 4% into correction territory

https://news.ycombinator.com/item?id=50381623

Comment by shevy-java 1 day ago

They are pillaging.

It will be a long time required here, investigating all corruption that has been happening.

Inflation increase should be viewed as a mafia in charge of a country.

Comment by 1 day ago

Comment by donohoe 1 day ago

Relax. This happens 2-3'ish times a year. Remember last April when Trump announced tariffs.

Comment by amelius 1 day ago

Can I have my DRAM now?

Comment by silverFork 1 day ago

LOL

Comment by Ritewut 23 hours ago

According to Sam Altman, giving you RAM would be a waste and it's better kept with him.

Comment by dylan604 23 hours ago

Giving me RAM is a waste as all I'm doing is watching cat videos, but I'll be damned if sama can have my RAM.

Comment by pixelatedindex 19 hours ago

All bits transferred over the wire are equally important, so I wouldn’t say your cat videos are a waste of RAM. It gives you intangible benefits.

Comment by lifestyleguru 11 hours ago

Bought RAM online at a price unbelievable two years ago, shipment vanished on its way in logistic center in Germany. No one is getting any RAM at any price.

Comment by dude250711 1 day ago

Of course! As a paid service that is.

Comment by Ritewut 23 hours ago

Josh Johnson has a joke about how little this matters for the average person. How trillions can be lost overnight and your everyday Joe sees no changes.

Comment by png732 21 hours ago

It is entertaining when engineers discuss finance (not that I am saying I am any better...)

Comment by aidenn0 1 day ago

Love how headlines use absolute numbers when the percentage is small.

Comment by throwaway384034 1 day ago

Looks like the party is over, now for the hangover.

Comment by huqedato 1 day ago

Sell the dip! I'm buying cheap.

Comment by dude250711 1 day ago

What next? Bubble prophets start actually short-selling?

Comment by overfeed 22 hours ago

Unironically, yes. Look at the PUT trade volumes.

Comment by runarberg 23 hours ago

Probably not. Most bubble prophets are tech journalists and are therefor unlikely to participate in the market (they make enough money reporting on it).

Additionally I suspect a lot of day traders are them selves AI boosters and are unlikely to believe the AI bubble is real.

Comment by rationalist 21 hours ago

I bought my 2028 puts last week. They're already up 60%. This bubble pop can take it's time for all I care.

Comment by dudefeliciano 1 day ago

Interesting how the coverage of midterm elections was flagged with many users talking about how politics are not a hacker worthy topic but this somehow seems to be

Comment by outside1234 1 day ago

Don't worry, tomorrow will be worse

Comment by CodeCompost 1 day ago

Yeah, yeah, that’s cool and all, but all I want to know is whether I can get a video card at normal prices.

Comment by vladmk 1 day ago

2.5 Trillion unfortunately is nothing compared to the debt we're in smh

Comment by carlosjobim 21 hours ago

Everybody who has been really angry with Elon Musk because he is a multi billionaire and that means he stole their money, are they now overjoyed with gratefulness for getting billions and billions of their stolen money back today?

Comment by TheUnhinged 16 hours ago

I am short on SPCX, so yes, very much “overjoyed.”

Comment by i_love_retros 1 day ago

America desperately needs January to come around fast. We need some level headed sensible people running the country. We need to elect more socialists to knock these tech companies down hard. Power to the people and fuck all this AI shit.

Comment by SwellJoe 1 day ago

As usual, I was right about the market but way too early. I sold all of my AI-exposed stocks last year, as I knew the investment going into it couldn't be recouped in a reasonable time. If I'd held longer, I'd be up about 2x on those shares even if I'd only sold in a panic yesterday.

But, it also means I can probably reinvest in some of those stocks now that a correction is in progress. There are some excellent tech companies with strong leadership and strong growth (e.g. ARM) that have been too expensive for a long time; still too expensive, but getting closer to reasonable.

Comment by cgeier 1 day ago

Being early means you were not right, it‘s all about the timing.

Comment by SwellJoe 1 day ago

It's about timing and direction. Timing doesn't matter if it's not a well-run business.

Most of my holdings with AI exposure were and are well-run businesses; they were when I bought them, when I sold them, and throughout the AI-inspired rise. The problem was I didn't believe there was sufficient market opportunity to justify the stratospheric rise, and I think the market has now begun to catch up to that thinking. The market has begun to agree with the premise I based my decision to sell on.

I suspect the decline will continue and I will be able to buy back into at least some of the stocks I sold at a price better than what I sold them for.

So, yes, my post was to say I am frequently wrong on timing, even if the premise I based a decision on turns out to be true. I don't understand people, but I understand tech.

Comment by curiousllama 1 day ago

I know they'd be down 50%! I just didn't know they'd be up 500% before that.

Comment by gopher2000 1 day ago

"I thought they'd be down 50% and they're up 450% so I was mostly right"

Comment by hagbard_c 1 day ago

Yes, well, remember the dot-com boom/bust cycle? Lots of people lost a lot of money then but not all of those stocks ended up becoming worthless. Some held on to what they had and made a fortune once the internet-hype was over and the internet-era began. The same could happen with some - but certainly not all - of these 'AI-exposed' stocks. Once the 'AI' hype is over the 'AI era' will probably begin, especially if the dearth of RAM and matrix processing capacity is solved somehow.

Comment by SwellJoe 1 day ago

That was the first time I was right but early. I sold out well before the peak to start a business with the money. I made money, roughly tripling my investment, but lots of folks made more money (and lots of folks lost a lot of money). In this case, I sold at a profit, but I could have made a bigger profit by being more slow to respond to my understanding of the market.

Comment by png732 23 hours ago

With all respect, you were not right. Your stocks are still above where they were when you sold them. To say that the stocks you held would at some point experience a large one day drop is a certainty.

Comment by SwellJoe 23 hours ago

I've never said "one day drop".

Comment by png732 23 hours ago

To say that the market would have a correction at some point in the future is also a certainty.

Comment by 0xy 22 hours ago

So you sold low and are now buying in high? Seems like you just massively misjudged the market.

Comment by tjwebbnorfolk 1 day ago

Tell me the difference between early and wrong

Comment by SwellJoe 23 hours ago

I mean, I made money on all of them. 3x on ARM. And, there are folks who lost a bunch of money by being long today in all of those stocks.

But, also, right but early isn't worth much. I've sold too soon many times...most often making money, but selling early in the rise.

Comment by 1 day ago

Comment by hn_submit 1 day ago

People the AIpocalypse is real!! Brace yourselves for a $10 Trillion wipeout.

Anthropic and OpenAI will disintegrate and vanish in the mist.

That's all folks!!!

Comment by yread 1 day ago

I'm already pushing my bathtub out so that I can catch all the GPUs that will soon start raining down from the clouds

Comment by drivebyhooting 1 day ago

I hope not. I need my subsidized subscription and I’m not satisfied with argon

Comment by novaRom 1 day ago

Selling AI stocks before year-end makes sense, right? New Congress, new House take over in January. Cost of living so tax hikes next year. Better to lock in gains now than pay more later? Besides cash is now bringing more than 4% pa

Comment by hoppp 1 day ago

End year sales are common. Black friday, Christmas whatever. People spend and taking profit feels good.

Comment by aaron695 1 day ago

[dead]

Comment by triceratops 1 day ago

> Cost of living so tax hikes next year. Better to lock in gains now than pay more later?

Deliberately pay capital gains tax now on the off-chance taxes go up next year? You do you my friend.

Comment by ThunderSizzle 1 day ago

I expect Democrats to be as pro big business as they always have been - as long as they are "regulated" to be in sync with Democrats desires.

They'll be anti data centers until they are no longer the opposition party. Then suddenly both Republicans and Democrats will change while MAGA/America First and woke 2.0/socialists sides won't have changed at all.

Isn't the political party system great!

Comment by cpursley 1 day ago

Datacenters of Democracy, aka USAIDS 2.0.

Comment by bell-cot 1 day ago

Similar to the old saw about you owning the bank $10 thousand vs. $10 billion, the "value" of stocks does not scale.

Comment by deadbabe 1 day ago

[flagged]

Comment by posix_compliant 1 day ago

What an inane comment. AI came out of 1950s university labs, not a political party, and tech workers still donate overwhelmingly to Democrats. Republicans and Democrats worry about AI at nearly identical rates. Copyright, energy and jobs are real issues, but a boycott fixes none of them. And "give back all tech gains" means nothing.