Why have stocks fallen so sharply recently?

First of all, the rebound of the global epidemic is one of the main reasons for the decline in stocks. Despite the increasing vaccination rate, the rebound of epidemic situation in various places still worries investors. Especially in Europe and South America, the speed and scope of the epidemic rebound are even more alarming, leading to a sharp drop in the stock market.

Secondly, the rise in the yield of US Treasury bonds is also one of the reasons for the stock decline. The yield of US Treasury bonds is an important indicator to measure the market's confidence in the US economic prospects. Recently, due to rising inflation expectations and signs of economic recovery in the United States, the yield of US Treasury bonds has been rising continuously, which has caused the market to worry about the future. High-yield treasury bonds will also reduce the number of investors in the stock market, because they prefer to buy safer bonds rather than riskier stocks.

Third, the lack of global chip supply is also one of the reasons for the stock decline. Due to the COVID-19 epidemic and other factors, the global chip shortage has become a serious problem. As a result, the production capacity of many companies is limited and the stock market is hit. In particular, technology stocks, because the chip is one of their core products, so its decline is more obvious.

To sum up, the global epidemic rebounded, the yield of US Treasury bonds rose, and the global chip shortage was the main reason for the stock decline. Although the fluctuation of the stock market is normal, investors still need to remain calm, look at the changes of the stock market rationally, and rationally allocate their portfolios to cope with market risks.