Nvidia's good news cannot stop the rise and fall of US stocks on Thursday. Goldman Sachs says the main problem is an overfocus on hedging.

Goldman Sachs partner John Flood said that the sharp reversal in the US stock market on Thursday highlighted the impressive Nvidia financial report, but did not relieve traders' concerns about risks as expected. Instead, it prompted them to seek protection against further losses. The US stock market opened sharply higher, but quickly reversed. The S&P 500 index rose 1.9% in the first hour of trading, then fell 1.1% before 1 p.m. - the largest intraday volatility since market turmoil in April, with market cap evaporating over $2 trillion from the day's peak and closing below the 100-day moving average for the first time in months. The VIX index surged above 26. Despite the impressive financial report from Nvidia, the stock market continued to plummet, disappointing traders who were eager to find reasons for the drop. Various explanations emerged, including doubts about whether the Fed would cut rates after the mixed employment report, concerns about overvaluation and technical factors that could trigger further selling by short-term funds. "The market is currently scarred," Flood wrote in a report to clients. "Investors are overly focused on the risks of crowded hedge markets, completely in profit protection mode."