Goldman Sachs warns: "Extreme hedging" panic lurking behind US stock market plunge

Jinse Finance reported that John Flood, a partner at Goldman Sachs, pointed out that the dramatic reversal in the US stock market on Thursday highlighted that Nvidia's explosive performance did not provide traders with the anticipated "risk-off" signal. Instead, it prompted them to urgently build defenses to avoid further losses. The early gains in the US stock market on Thursday quickly evaporated. The S&P 500 index surged 1.9% in the first hour after the opening, but turned negative before 1 p.m. local time—marking the largest intraday swing since the market turmoil in April, with more than $2 trillion in market value wiped out from the day's peak, and for the first time in months, closing below the 100-day moving average. The VIX fear index jumped above 26. "The market is currently full of old scars," Flood wrote in a report to clients. "The market is extremely focused on hedging 'crowded risk,' and investors have entered a pure profit and loss protection mode." (Golden Ten Data)