“Twitter Bears” Come Out of Their Caves As Japan Selloff Hits The Panic Button On US Stocks

If you’ve been scrolling through your X account lately, you know the internet is basically on fire. People are screaming “blood in the streets” like it’s the latest fashion trend and I’ve seen so many fear memes posted I might have a nightmare tonight. So, let’s take a breather and break down the chaos, because right now, emotions are high and I’ve seen more market bears running around than you’d see at a picnic in Yellowstone.

So, what’s causing all this selling pressure? Well, Japan's stock market decided it was resurrection day. The Nikkei and TOPIX indices both dropped over 8%, marking the worst plunge since 1987’s Black Monday. Japan’s market is having an '80s flashback, but without the fun neon colors and leg warmers your mom used to wear in high school.

Naturally, this dramatic drop was triggered when the Japanese central bank decided to hike interest rates to curb government bond purchases. Major players like Mitsubishi, Mitsui & Co., Sumitomo, and Marubeni saw their stock prices fall about 10%, which sent investors into a panic. The result? A ripple effect that spread from Japan to markets around the world, causing chaos and confusion everywhere.

And it’s not just Japan that’s feeling the heat in Asia. South Korea is also feeling the pressure, halting all sell orders as their markets jumped off the deep end, signaling pure panic selling. And the yen? It’s at its lowest level against the dollar since January 2024, thanks to the Bank of Japan’s rate hike. Investors, who had enjoyed a yen-induced stock rally, are now quickly exiting.

(Source: VOA News)

So, why is “Money Twitter” going absolutely bananas? Well, Japan’s stock market crash has sent shockwaves across the globe, and U.S. investors are hitting the panic button like it’s going out of style. They’re worried that Japan’s meltdown is just the tip of the iceberg for bigger troubles ahead.

And they might be right. The NASDAQ is down over 4%, the S&P 500 has tanked more than 3%, and it looks like things are only going to get worse. Volatility has doubled in a month, many stocks are down 20% from their highs, and Bitcoin is having a week so bad it makes your worst Monday ever look like a vacation.

Adding to the turmoil, Warren Buffett, the oracle of Omaha, decided to dump more stock last quarter than he ever has before. This move has everyone sweating like they’re in a sauna about the market’s future. Meanwhile, the Federal Reserve is acting like my teenage brother trying to decide on a college major—completely indecisive about cutting interest rates. No wonder, investors are shifting from stocks to T-Bills.

Buffett’s Berkshire Hathaway has been busy, slashing its position in Apple and hoarding a staggering $277 billion in cash. This has only fueled the tech stock fire sale, with Apple shares plummeting 9% and Nvidia dropping almost 15% at one point this morning.

The Fed’s hesitation to cut rates might have pushed the market into this frenzy. After some disappointing jobs data, investors believe the Fed should have cut rates. With the economy looking shakier than a Jenga tower at a frat party, Rick Rieder from BlackRock is shouting that rates need to drop to around 4%—and fast.

I guess we’ll just have to watch and see how this all plays out. But to be positive, at least you have some dip buying opportunities.

Stock.News has positions in Apple.