The market is in a state of devastation! Retail investors' favorite speculative stocks face a "day of reckoning".

On Wednesday, speculative stocks favored by retail investors experienced a sharp drop, and the market was in chaos. This selling storm began with a statement from NVIDIA Corporation (NVDA.US) CEO Jensen Huang at the CES technology conference in Las Vegas, where he mentioned that quantum computers may take 20 years to materialize. This comment caused a plunge in quantum computing stocks, including Rigetti Computing Inc. (RGTI.US) down 45.41% and IonQ Inc. (IONQ.US) down 39%. According to FactSet data, these two stocks plummeted by 50% at one point on that day, marking the largest single-day drop in history. Quantum Computing Inc. (QUBT.US) also saw a 43.34% drop. As retail investors rushed to meet margin calls, the sell-off spread to other popular stocks. Farzin Azarm, Managing Director of Mizuho Securities USA, stated that retail investors use leverage to amplify their gains in rising markets, but it also magnifies their losses in falling markets. Thomas Peterffy, Founder and Chairman of Interactive Brokers Group, mentioned during a Goldman Sachs Group, Inc. conference in December that margin loans on their platform had increased by 16% in the past three months. This phenomenon has exacerbated recent market volatility. Azarm said, "Today is the day of reckoning for retail investors. They had previously bought a large amount of extremely speculative stocks, and now these positions are being forcibly liquidated." The FTSE-Russell US High-Altitude Stock Index plunged over 5% on Wednesday, marking the worst start to the year since the 2021 "MEME stock hype." The selling wave also impacted nuclear energy stocks, with NANO Nuclear Energy Inc. (NNE.US) down 11.24% and NuScale Power Corp. (SMR.US) down 9.30%. Additionally, popular stocks related to themes like cryptocurrency, cannabis, and autonomous driving also saw widespread declines. The performance of low-priced stocks was particularly brutal. For example, XTI Aerospace Inc. (XTIA.US) saw a stock price drop of 55.74%, after rising 30% just a day earlier, now trading at only 5 cents per share. Azarm pointed out that retail investors have been extremely active in the market recently, accounting for 55% of US stock market trading activity in the past two weeks. Trading volume on the Nasdaq Composite Index reached nearly 14 billion shares on Tuesday, hitting the highest level since 1995. "Even during the 2021 MEME stock hype, we rarely saw such high trading activity." The cryptocurrency market also showed signs of overheating, with Bitcoin surpassing $100,000 and a token named "Fartcoin" exceeding a market valuation of $1 billion, surpassing some publicly traded companies. At the end of last year, heavily shorted stocks like Him & Hers Inc. (HIMS.US), SEALSQ Corp. (LAES.US), and Enovix Corp. (ENVX.US) soared, but they also faced difficulties this week. Julian Klymochko, CEO of Accelerate Investment, said, "There is massive speculation in the market, keeping these highly shorted stocks at high levels. In our industry, we call them 'unprofitable trash stocks'." This week, the S&P 500 Index, Nasdaq Composite Index, and Dow Jones Industrial Average all fell, and at the same time, the yield on the 10-year US Treasury bond approached its highest level since the end of 2023. Retail speculative traders have paid little attention to rising interest rates, but its impact is gradually manifesting. Steve Sosnick, Chief Strategist at Interactive Brokers, pointed out, "While rising rates have changed the overall risk-return calculation in the market, it had not previously had a significant impact on the valuation and performance of speculative quantum stocks." Despite the heavy blow to speculative stocks, there was still a certain speculative bubble in the market on Wednesday afternoon. For example, the stock price of MicroStrategy Inc. (MSTR.US) has fallen from its high point in November but is still higher than its net asset value, symbolizing excessive speculation in the market.