## US Stocks Retreat Significantly but End-of-Year Rebound Expectations Remain, Crypto Cold Snap Blows Toward Tech Stocks
**S&P 500 and Nasdaq Close Lower, Dow Jones Industrial Average Drops Over 0.9%**
The US stock market entered December with a correction, with all three major indices declining simultaneously. As of Monday's close, the S&P 500 fell 0.53% to 6,812.63, the Nasdaq declined 0.38% to 23,275.92, and the Dow Jones Industrial Average experienced the largest drop, falling 427.09 points to 47,289.33. This broke the previous five-day winning streak, indicating a clear shift in market sentiment at the start of the month.
The core drivers of market volatility come from multiple directions. The sharp decline in cryptocurrencies directly impacted the Tech Stocks and growth sectors, while rising US Treasury yields suppressed "bond-like sectors" such as real estate and utilities. Investors are broadly focusing on next week's Federal Reserve policy meeting, expecting the central bank to make decisions amid weak economic data.
### Weak Economic Data Continues Manufacturing Slump
The latest US Institute for Supply Management (ISM) survey further confirms market concerns about economic outlook. **US manufacturing contracted for the ninth consecutive month in November, with PMI falling from 48.7 to 48.2**, well below the expansion-contraction threshold of 50, indicating factory activity remains sluggish.
Tariffs continue to weigh heavily on manufacturing. Companies face not only declining orders but also ongoing import cost pressures that push up production expenses. **ISM's prices paid index rose to 58.5**, suggesting ongoing upside risks to commodity prices, which interfere with inflation expectations.
Employment data is similarly bleak. **Factory employment has contracted for ten consecutive months**, with many transportation equipment manufacturers announcing "more permanent changes," including layoffs and shifting some production overseas. This indicates companies no longer see the current difficulties as temporary.
### Crypto Assets Plunge Triggers Chain Reactions
**Bitcoin dropped over 8% intraday, briefly falling below $84,000**, marking its worst single-day performance since March. Latest data shows Bitcoin's price is consolidating around $87,600. Ethereum and Solana also performed poorly, with declines close to 10%, with Ethereum at around $2,950 and Solana dropping to $122.95.
The crypto crash is not an isolated event, hiding structural risks behind it. **The open interest in Bitcoin perpetual contracts is approximately $787 billion**, compared to only about $135 billion in ETF leverage. This means high leverage positions continue to accumulate within exchanges, with about $400 million in concentrated liquidations on Monday reflecting this risk.
Some exchanges offer leverage up to 200x, where any price correction could trigger massive forced liquidations. The retail nature of crypto markets further amplifies volatility—when retail investors panic and sell collectively, chain reactions quickly spread to Tech Stocks.
Grayscale's on-chain data shows open interest in perpetual contracts is decreasing, with trading volume slowing down, indicating a cooling of speculative sentiment and shrinking risk appetite. The crypto asset correction has already created a clear "spillover effect," becoming a significant short-term drag on the performance of Tech Stocks.
### Tech Sector Divergence Intensifies, Structural Opportunities Emerge
Despite the overall market pressure, there is a clear divergence within the Tech sector. **Nvidia rose over 1% against the trend**, continuing to solidify its position as a favorite among retail investors and a leading Tech stock. Its steady performance boosts market confidence.
Conversely, previously high-flying AI supply chain companies experienced profit-taking. **Broadcom and Super Micro Computer both fell more than 2%**, reflecting cautious investor sentiment toward overvalued and rapidly rising niche sectors.
Interestingly, **Synopsys surged significantly**, driven by Nvidia's announcement of large investments to strengthen its strategic position in semiconductor design software. This indicates market funds are shifting from broad "AI concept stocks" toward more core, competitive, and certain targets.
### Retail Sector Shines Against the Odds, Year-End Consumption Potential Unfolds
Amid the overall market downturn, the retail sector performed remarkably well. **Walmart and Home Depot both rose**, with the retail-focused XRT ETF gaining nearly 1%, and a five-day increase exceeding 7%.
The holiday shopping season is in full swing. Adobe Analytics projects consumers will spend $14.2 billion online on "Cyber Monday," providing ongoing support for retail companies. This suggests that despite macroeconomic uncertainties, consumer purchasing power remains relatively intact.
### High-Price Stocks Continue to Hit New Highs, Market Structure Remains Resilient
Notably, even as the market corrects, **12 stocks within the S&P 500 hit 52-week highs, with 8 reaching all-time highs**. This phenomenon demonstrates that internal structural strength in US stocks persists, and there is no widespread risk aversion.
Among the new highs are General Motors (first to break its IPO high), Monster Beverage, Walmart, Synchrony Financial, C.H. Robinson, Cummins, Analog Devices, and Steel Dynamics. In contrast, only Copart among the S&P 500 components hit a 52-week low.
This high degree of divergence indicates that, despite the market correction, active capital rotation is underway, shifting from high-risk assets to more certain targets.
### Fed Rate Cut Probability Remains High, Year-End Seasonal Factors Support
**CME FedWatch tool shows an 85% market probability of a 25 bps rate cut by the Fed in December**. Although Goldman Sachs economists suggest internal dissent might lead to a "hawkish cut" (cutting but hinting at a possible pause in easing), the overall expectation for easing remains dominant.
Market observers believe the current environment is in a "digestive phase," but supporting factors still exist. First, a high probability of rate cuts provides policy support; second, continued easing of inflation offers valuation support for stocks.
Historically, **since 1950, December has been the third-best month for the S&P 500, with an average gain of over 1%**. Despite short-term volatility, year-end seasonal factors and policy support could create opportunities for a market rebound.
The gloom of a major US stock decline has not entirely obscured the market outlook. The emergence of structural opportunities combined with seasonal factors at year-end offers investors new perspectives. The key is to identify certainty amid volatility and seek rotation opportunities during adjustments.