Recorded in history! What a week it has been, the global markets have all been thrown into chaos.

Sometimes, decades go by without anything happening, while sometimes, in just a few weeks, decades worth of events occur." This quote from Lenin may be the most appropriate footnote for the extreme turmoil in the global financial markets this past week. In just a few trading days this week, global capital markets experienced the most severe sell-off since the outbreak of the COVID-19 pandemic in March 2020, with multiple market indicators hitting historic lows, from stocks to commodities, almost all asset classes experienced a "collective slaughter". And the catalyst for all of this was the unexpectedly harsh tariff policy announced by the US government. Global stock markets faced "historic" sell-offs This week, global financial markets experienced a tremendous shock, the intensity of which is enough to go down in history. Global stock markets and the US stock market both recorded their worst weekly performance since the market circuit breaker triggered by the COVID-19 outbreak in March 2020. The breadth and depth of the market sell-off was shocking: Index plunges and bear market signals: The Dow Jones Industrial Average plummeted by around 2,200 points in a single day on Friday, marking the largest single-day point drop in history. The tech-heavy Nasdaq Composite Index and the small-cap Russell 2000 Index, both fell into a technical bear market (a drop of over 20% from recent highs). Tech giants' market capitalization evaporates: The leading "Mag7" tech giants faced huge pressure this week, with a combined market capitalization loss of up to $1.4 trillion, the largest weekly market value decline on record. The broader S&P 500 Index wiped out $5.4 trillion in market value in just the past two trading days, averaging a daily loss of $2.7 trillion. Panic spreads and trading surges: Market panic escalated sharply. The VIX index ("fear index"), which measures market volatility, recorded its largest absolute weekly gain since February 2020, closing at a new high since the COVID-19 pandemic. Accompanying the panic was a sharp increase in trading volume, with total trading volume in the US stock market hitting a new record on Friday. Goldman Sachs' trading desk report stated that Friday's sell-off felt "more unsettling" than the previous day, with large sell orders sporadically emerging from long-term investors targeting bank stocks, Mag7 tech stocks, and some industrial stocks. All sectors hit hard: Almost no safe haven was left in the market decline, with all industry sectors recording losses this week. The energy and tech sectors were the hardest hit, leading the decline in the market. Traditional defensive sectors, such as consumer staples and utilities, while relatively small in decline, were not spared. The performance of cyclical stocks relative to the broader market hit its worst record since August 2024. Significant regional performance differences: Looking at the cumulative performance from the beginning of the year, the Chinese stock market still maintained a leading position among major global markets. However, the European stock market reversed from gains to losses this week, while the US stock market became the "epicenter" of this round of global sell-off, suffering a heavy blow. Cross-asset categories plunge, risk aversion spikes The market turmoil was not limited to just the stock market, as risk aversion spiking led to a widespread sell-off across asset categories. Credit market risks surge: The US high-yield (junk) bond market flashed warning signs, with credit spreads (the extra yield relative to risk-free government bonds) widening sharply by over 70 basis points this week. This was the worst performance in a week since the early days of the COVID-19 crisis in April 2020, with spreads widening even more than during the worst week of the SVB crisis in March 2023. At the same time, bond market volatility also soared to the highest level since early November last year. Flight to US treasuries, intensifying rate cut expectations: Panic drove funds into the safe haven of US Treasury bonds, causing yields on all maturities to plummet. Short-term bond yields (such as the 2-year) showed relative resilience, but the entire yield curve shifted lower by 25-30 basis points this week. The key 10-year US Treasury yield broke below the 4% psychological barrier, the 30-year bond yield dropped below the federal funds rate, and the 2-year bond yield hit a new low since early October last year. Market expectations for the Federal Reserve's future monetary policy changed dramatically, as the rate futures market has fully priced in the possibility of up to 5 rate cuts, even starting to price in the probability of emergency rate cuts between regular meetings. As a result, the yield curve steepened further after the tariff announcement. Forex market turbulence: After a sharp decline mid-week, the US dollar index rebounded on Friday. The traditional safe-haven currency, the Japanese Yen, strengthened this week. The Chinese Yuan against the US Dollar exchange rate remained relatively stable throughout the week. However, commodity currencies like the Australian Dollar faced intense selling pressure, with the AUD/USD exchange rate plunging to its lowest level since the COVID-19 crisis in March 2020, and its Friday single-day decline was the largest since the 2008 global financial crisis. Commodity markets collapse: The commodity markets experienced a "devastating" blow in the last two trading days of this week, with the overall price index recording the largest two-day decline since September 2011. International oil prices plummeted from a five-week high to a four-year low, with a weekly decline of 11%, the worst weekly performance since growth concerns sparked by the SVB crisis in March 2023. Gold was not spared either, recording its second weekly decline of the year, with a significant drop on Friday marking its worst single-day performance since November 2024. Copper, which had previously hit record highs, also sharply reversed, falling to a two-month low, with its Friday single-day decline being the largest since the Lehman Brothers bankruptcy event in October 2008. Bitcoin shows resilience: In the backdrop of the general decline in all asset categories, the price of Bitcoin, representing cryptocurrencies, remained largely unchanged this week, showing relative resilience. Some market commentators suggest this may imply that participants in the crypto market have expectations of potential liquidity changes in the future. Tariffs act as the trigger, the Fed has no immediate plans to rescue the market The direct trigger of the severe market turmoil this week is widely believed to be the "harsher than expected" tariff measures announced by the US government. Based on the closing price before the tariff announcement, the major US indices experienced a significant decline.Over the next few trading days, it accumulated a 9% to 10% decline.Despite the market falling into panic, the Federal Reserve does not seem to show a willingness to intervene immediately. This stance is based on the following points: Differentiated economic data: The latest economic data show a clear "soft-hard differentiation" - reflecting market sentiment and expectations, "soft data" continue to be weak, but "hard data" reflecting actual economic activity still remain strong. This provides support for Federal Reserve Chairman Powell's judgment that "the foundation of the U.S. economy remains solid." Powell's hawkish signals: Despite the market turmoil intensifying and expectations of rate cuts rising sharply, Powell's recent public comments have maintained a relatively hawkish tone, explicitly stating that there is no need to take action "currently." Market interpretation of the failure of the "double put": Investors feel that both the "Trump Put," which relies on government adjustment of tariff policies, and the "Fed Put," which relies on the Fed cutting interest rates to buoy the market, seem to have been "taken off the table" this week. The market has confirmed that the Trump administration will not change tariff policies, and Powell has also confirmed that the Fed does not currently see a need to take action. Market outlook: Short-term caution, focusing on future developments Summing up this heart-pounding week, the market's performance is undoubtedly extremely chaotic. Global markets have experienced historic sell-offs, with the speed of decline and breadth of impact being extremely rare. It is worth noting that the last time the S&P 500 index experienced such a rapid decline, the Federal Reserve swiftly intervened and launched a large-scale rescue plan. In addition, the current level of real yields may also suggest that the market's adjustment is "far from over." Looking ahead, Academy Securities analyst Peter Tchir provides a relatively balanced perspective, pointing out potential positive and negative factors over the weekend and in the coming days: Potential positive factors: After two days of sharp declines in the stock market, the U.S. government may be under pressure to seek and announce some "wins" over the weekend to reassure the market. The government may choose to "redo" or "modify" the tariff policy that caused turmoil, or make related personnel adjustments. There may even be legal challenges to the legitimacy of the tariff policy, which may be beneficial for the market in the short term (but may lead to other more complex issues). Potential negative risks: More countries or regions may join retaliatory tariff actions against the U.S. Countries may accelerate signing new trade agreements to circumvent the U.S. Unexpected negative events may occur globally over the weekend. Even if the market experiences a technical rebound, considering that market expectations and global relations have been severely damaged, the rebound may be difficult to sustain. A key question is: at what point will investors begin to lose confidence and join the selling frenzy? Tchir personally judges that the extreme pessimism in the market has eased somewhat going into the weekend, and there is roughly an equal or slightly higher possibility of positive factors appearing in the next few days than negative factors. However, he strongly warns that the low point of this market cycle may not have arrived yet. Therefore, he advises investors to maintain caution with their current positions, and be prepared to quickly close out any long positions and swiftly establish short positions. This article is reprinted from "Wall Street News," author: Gao Zhimou; GMTEight Editor: Yan Wencai.