The cheers have turned into screams. Both Tesla and NVIDIA, the two most preferred stocks by retail investors in the U.S., have entered the average loss zone. This is due to concerns about a recession stemming from the 'tariff war' led by U.S. President Donald Trump.
According to the financial investment industry on the 11th, NVIDIA's stock finished the night down 5.07% ($5.71) at $106.98. The average Korean won exchange rate based on the U.S. dollar is 156,137 won. This is 0.96% lower than the average purchase price of 152,655 won for 192,303 NVIDIA investors linked to Naver Pay's 'My Assets Service'. This indicates that the average revenue has turned negative. The proportion of loss-making investors is also approaching 40%.
Tesla's stock plunged 15.43% ($40.52) overnight. The loss rate has increased to 18.16% compared to the average purchase price of 396,180 won for 302,299 Tesla investors linked to Naver Pay's 'My Assets Service'. The proportion of loss-making investors has also surpassed 50%.
Tesla and NVIDIA are the top two foreign stocks held by domestic investors. According to the Korea Securities Depository, as of the 7th, the amount held is $16.53952 billion (approximately 24 trillion won) and $10.2312 billion (approximately 15 trillion won), respectively. While it had increased sharply until last year, the ongoing tariff war this year has shown a clear downward trend.
There are many stocks among those actively invested in by retail investors in the U.S. and exchange-traded funds (ETFs) that have entered the loss zone besides Tesla and NVIDIA. Palantir, ranked fifth based on the amount held, has an average loss rate of -4.36%, and TQQQ (which tracks 3 times the daily return of the Nasdaq 100 index) is at -2.06%.
Leveraged ETFs have collapsed. TSLL (which tracks 2 times the daily return of Tesla stock) has an average loss rate of 63.3%. SOXL (which tracks 3 times the daily return of the semiconductor index) and NVDL (which tracks 2 times the daily return of NVIDIA stock) are recording average loss rates of 40.3% and 33.7%, respectively.
At least Apple, Microsoft, Alphabet, QQQ (which tracks the daily return of the Nasdaq 100 index), VOO (which tracks the daily return of the S&P 500 index), and SCHD (high-dividend stocks) are still maintaining an average revenue in 'plus (+)' territory.
The biggest reason for the market's volatility is attributed to U.S. President Donald Trump's tariff policy. In particular, Trump's response to a question about whether he expects a recession during an interview with Fox News the previous day, stating that the economy is in a 'transition', has been interpreted by the market as an intention to implement policies that will sacrifice short-term growth to change the economic structure. This led to a 'panic sell', causing the Nasdaq index to experience its worst day since September 2022.
The Fear & Greed Index has fallen to extreme fear from neutral in just a month. This indicates increased volatility and an oversold state. Nevertheless, the majority advises caution in buying in the short term. Morgan Stanley, a global investment bank, has maintained its outlook that the Standard & Poor's (S&P) 500 index will rise to 6,500 by year-end, but also stated that the possibility of falling to the 5,500 range due to tariff effects should be considered.
There are also several events that may impact the stock market. The U.S. Consumer Price Index (CPI) release is scheduled for the 12th. Next week, the Federal Open Market Committee (FOMC) regular meeting and the personal consumption expenditures (PCE) price index announcement at the end of this month, as well as the scheduled imposition of reciprocal tariffs on the 2nd of next month will follow.
Han Ji-young, a researcher at Kiwoom Securities, noted that 'the Nasdaq index's 12-month forward price-to-earnings ratio (PER = market capitalization ÷ net income) recorded 25 times during the crash, reducing valuation pressure compared to last year's end when it fluctuated around 30 times.' He added that 'while it is indeed a period that requires risk management, it is appropriate to respond with a neutral position (holding) while confirming U.S. major economic indicators and changes in the tariff response levels of the Trump administration rather than joining in panic selling.'