US stocks plunge triggering concerns about downside risks, Wall Street views are now diverging.

Due to the escalating risks of a trade war, the ongoing U.S. federal government shutdown, and other factors, market sentiment quickly deteriorated, and U.S. stocks experienced a "Black Friday." Data shows that the S&P 500 index and Nasdaq Composite index fell by 2.71% and 3.56%, respectively, marking their largest single-day declines since April; the Dow Jones Industrial Average fell by 1.9%. Market panic sentiment also increased. The Chicago Board Options Exchange Volatility Index (VIX), known as the "Wall Street Fear Index," soared above 22 on Friday, ending a four-month period of stability. Analysts pointed out that as automated trading systems triggered stop-loss orders and institutional funds closed out positions, market volatility was further amplified. From a market structure perspective, this "technical decline" often accompanies a surge in trading volume and panic selling, and may maintain high volatility in the short term. After the reappearance of tariff risks, investors' concerns about the end of the record-breaking U.S. stock market rally escalated on Friday. Gene Goldman, Chief Investment Officer at Cetera Investment Management, said, "At the current high valuation levels, this sell-off reflects market tension." "The market has priced in everything according to 'perfect' expectations, so any uncertainty will amplify investor anxiety, undoubtedly exacerbating concerns about economic growth." In Friday's sell-off of U.S. stocks, technology stocks led the decline. The semiconductor, chip, and electric car sectors all declined, with several leading stocks falling by 5% to 8%. Investors were concerned that these industries are not only constrained by the global supply chain in their production processes but also face pressure due to slowing growth expectations in their sales markets. Art Hogan, Chief Market Strategist at B. Riley Wealth, noted that valuations of technology companies had been significantly pushed up in the preceding months, and amid rising external uncertainty, funds naturally chose to reduce their exposure to high-valuation stocks. Hogan said, "These companies depend heavily on the global system at both the supply and demand ends. When the external environment is turbulent, the market will first reprice the risks on these stocks." It is worth mentioning that Jamie Dimon, CEO of JPMorgan Chase, warned earlier this week that the risk of a significant downturn in U.S. stocks in the next 6 to 24 months is much higher than the market reflects, and he is more concerned about the risk of a substantial market correction than others. Dimon stated that most of the gains in U.S. stocks have been driven by investments related to artificial intelligence (AI), and the risk of overheating in U.S. stocks is increasing. Additionally, numerous factors, including geopolitical tensions, fiscal expenditure, and global remilitarization, create uncertainties that no one can answer, thus magnifying market uncertainties beyond what most people imagine. When discussing AI investments, Dimon said that AI investments overall will yield returns, but some related investments may face losses. Dimon also reiterated his concerns about U.S. inflation. However, some investors believe that the sudden escalation of tensions in U.S.-China trade is unlikely to significantly change market trends because artificial intelligence remains the dominant factor. James St. Aubin, Chief Investment Officer at Ocean Park Asset Management, said, "This is undoubtedly a major issue that may trigger a short-term pullback, but I do not think it will shake the AI theme that drives market gains." Saira Malik, Chief Investment Officer at Nuveen Asset Management LLC, previously stated that U.S. stocks are likely to continue their upward trend until the end of the year, with robust corporate earnings especially those of mega-cap tech giants continuing to drive stock price gains. She pointed out on Thursday that the fourth quarter is usually a strong period for stock performance, especially after the significant gains in the year-to-date. Therefore, the current upward trend is likely to continue. Although this upward trend has pushed U.S. stock valuations to historically high levels and raised concerns about a stock market bubble, Malik believes that strong corporate performance is enough to support current valuations. She expects that with the upcoming start of the third quarter earnings season next week, corporate earnings will once again exceed market expectations. Analysts predict that earnings for S&P 500 index components in the third quarter are expected to grow by 7.4%, which would be the smallest increase in two years. Malik said, "If you delve into the core DRIVERS of the rise in tech stocks, you will find that it is mainly driven by profit growth rather than valuation increases."