Wall Street Suffers Violent Sell-Off, Erasing Trillions in Market Value
New York – Just a day after a post-election rally offered a brief respite, Wall Street experienced one of its most severe trading sessions in years on Thursday. The S&P 500 saw its constituent companies shed approximately $3 trillion in market value, while the Nasdaq recorded its steepest daily decline since the early days of the pandemic.
The magnitude of the sell-off was stark, with more value disappearing from U.S. stocks in a single session than the entire cryptocurrency market is currently worth.
According to data compiled by The Kobeissi Letter, the S&P 500 alone lost about $3 trillion in market capitalization during Thursday’s trading. This equates to a staggering $750 billion vanishing per hour from the opening bell. Dow Jones Market Data independently assessed the loss at around $2.9 trillion, marking the largest single-day wipeout on record for the index’s components. Companies on the Nasdaq saw an additional $2.5 trillion in value evaporate, with the prominent “Magnificent Seven” group of stocks accounting for just over $1 trillion of that decline.
Analysts from The Kobeissi Letter highlighted the relentless nature of the selling pressure. They noted that both the S&P 500 and the Nasdaq attempted at least five intraday rebounds, including one significant rally of 1.7%. However, each attempt was met with renewed selling, and the leading index failed to register a single positive one-hour trading candle throughout the entire session.
By the close of trading, the Nasdaq 100 had fallen approximately 6.4%. Futures trading in the after-hours session extended this decline, pushing the 12-hour drop to 7.1%. The S&P 500, meanwhile, found itself about $5 trillion below its peak reached in October.
The consistency of the selling throughout the day was a notable feature of Thursday’s trading. As illustrated in an analysis by The Kobeissi Letter, multiple intraday rallies in both the S&P 500 and Nasdaq 100, some as substantial as 1.7%, were ultimately reversed. The analysis pointed out the absence of even a single green one-hour candlestick for the S&P 500 during the session, suggesting that Thursday’s trading would be a significant reference point for years to come.
Kobeissi suggested that the market’s collapse appeared to be driven more by technical factors than fundamental ones. While underlying investor concerns about AI profitability, capital expenditures, and the potential for tighter regulation had already created unease, record levels of leverage amplified the downturn once sentiment soured. U.S. leveraged exchange-traded funds (ETFs) attracted roughly $15 billion in October, representing the largest monthly inflow in at least two years.
In a striking comparison, the cryptocurrency market, which also experienced a significant downturn, has a total market capitalization estimated by CoinGecko and CoinMarketCap to be between $2.55 trillion and $2.65 trillion. Bitcoin accounts for the largest share, approximately 60% of this total.
This means that the $2.9 to $3 trillion erased from the S&P 500 companies in a single trading session surpassed the combined market value of all cryptocurrencies, including Bitcoin, Ethereum, XRP, BNB, stablecoins, altcoins, and meme coins. While this does not imply that all crypto assets are undervalued, it underscores that the digital asset market, despite significant adoption news in recent years, remains a fraction of the size of traditional equity markets.
