Nasdaq slowed down after the collapse. How do analysts explain the market's sharp fluctuations?

Stocks in the United States have partially recovered the losses they suffered during the collapse on Tuesday, June 9, follows from stock exchange data two hours before the close of trading. "Technology" index Nasdaq Composite, which at the moment was losing 3.7%, slowed its decline to 1.3%, and the "Wall Street Fear Index" fell below the psychological mark of 20 points.

Tuesday's sharp market decline followed a similar stock crash on Friday, June 5, when the Nasdaq fell 4% - the strongest pace in more than a year. How is this explained on Wall Street and should investors be worried?

- Investors are likely locking in profits on heavily-valued chip maker stocks to make room in portfolios for shares in Elon Musk's space company SpaceX ahead of its IPO, expected this week. Murphy & Sylvest senior wealth advisor and market strategist Paul Nolty said this in a statement to Reuters.

- "I think everyone is a little nervous right now," Infrastructure Capital Advisors CEO Joe Hatfield told CNBC, referring to the SpaceX IPO. June is generally "not a good month" for stocks, and now there's such a large listing looming over the market, he said. "I think the market will remain volatile until this event is behind us," Hatfield added.

- "It was technology companies that provided much of the upside and market momentum in the last leg of the rally," said Jordan Rizzuto, chief investment officer at GammaRoad Capital Partners, as quoted by Reuters. - These stocks are traditionally the most sensitive to interest rates. So it's not surprising that amid growing rate uncertainty [...] investors have started to lock in profits, especially in the technology sector."

- "The market as a whole needed a correction - it had gotten too hot," Manish Kabra, head of strategy for U.S. equities at Société Générale, told the Financial Times.

- Chip maker stocks and artificial intelligence-related securities have remained the main market driver in recent days, but GQG Partners portfolio manager Brian Kersmank doubts the trend remains durable. "The big question in the long term is the sustainability of growth," Kersmank told CNBC. - How long can it even continue?". Kersmank notes that many chip makers are essentially commodity businesses. "If you look at the situation from that perspective, prices have risen too fast. In some segments of the memory market, prices have gone up about 15 times in the last year. If you take that to the energy market and imagine oil went from $60 to $900 a barrel, how many investors would be buying oil company stocks right now?"

This article was AI-translated and verified by a human editor