Market Volatility and Its Causes

Recent market volatility can be traced to three primary factors, culminating in a significant sell-off. The yen carry trade played a crucial role, where investors borrowed cheaply in yen to invest elsewhere, prompting panic selling when the yen appreciated unexpectedly. Concurrently, the NASDAQ had shown signs of weakness, declining significantly over several weeks, particularly among tech stocks like Nvidia and Microsoft. Lastly, concerns about a slowing economy arose after a poor jobs report, adding to fears surrounding market corrections and creating a perfect storm of selling pressure.