After a hard-won rebound, the market's optimism suddenly turned to pessimism due to an unexpected economic data release by the Federal Reserve, leading to a global stock market decline.

Will the rebound continue?

01, Sudden Bearish News

On the previous trading day, the Shanghai Composite Index fell in sync with the U.S. stock market at the close, with the Nasdaq's drop reaching 1.6%.

This was the first decline after three consecutive days of significant increases for the Nasdaq.

Prior to this, several inflation-related indicators in the United States showed that the Federal Reserve's rate hikes had achieved some effect, with a noticeable slowdown in the year-on-year inflation rate.

As concerns grew over the continuous rate hikes potentially pushing the U.S. economy into recession, investors optimistically anticipated that the Federal Reserve's rate hikes would soon turn into rate cuts, based on the premise that inflation was under control.

However, the non-farm data released by the United States far exceeded expectations, suggesting that the economy has not yet fallen into recession, and the tight job market indicates that wages will continue to rise. The inflationary trend driven by wage increases to price increases has not truly changed, which means that inflation in the United States could potentially increase further in the coming months.

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In the 1970s, the United States experienced a decade-long period of inflation, so the Federal Reserve is not taking this lightly and has repeatedly emphasized that its monetary policy will not change until inflation has fallen back within the target range.

As a result, investors have started to worry again about the Federal Reserve continuing to raise rates, and if this sentiment continues to ferment, the U.S. stock market will face a new round of declines.02, A-shares decline

The drop in the U.S. stock market also affected the global market.

By the close of trading this afternoon, all major A-share indices fell across the board.

Although there was a slight rebound before the close, it only narrowed the decline, with the Shanghai Composite Index ultimately rebounding from a 1.1% drop to close with a 0.76% decline.

In addition, by the close, the CSI 300 Index fell by 1.3%, the ChiNext Index fell by 1.4%, and the CSI 500 Index also fell by 0.65%, indicating that both large-cap and small- to mid-cap stocks experienced declines.

In terms of trading volume, it continued to contract, from over 1,000 billion a few days ago to only about 87 billion today.

At the same time, northbound capital once again showed a net sell-off, but compared to last Friday's net sell-off of 4.25 billion, today's net sell-off was only 540 million yuan.

Moreover, if you observe today's northbound capital buying and selling situation, you will definitely find that by the morning close, the net sell-off had already exceeded the previous trading day's high of 4.564 billion yuan, but by the afternoon, northbound capital kept buying, and by the close, the net sell-off amount was narrowed to 540 million yuan, which means that looking only at the afternoon half-day trading session, the northbound capital was actually in a net buying state of up to 4 billion yuan.

03, Other markets

In contrast, today's Hong Kong stocks hardly rebounded at all, with the Hang Seng Index falling by 2% shortly after the market opened, and by the afternoon close, the Hang Seng Index closed at 21,222 points.The Hang Seng Tech Index saw a larger decline, ultimately falling by 3.65%, marking a consecutive decline over the last three trading days.

However, this is in stark contrast to last week, where for five consecutive trading days, southbound capital kept net selling, but today southbound capital net bought 1.99 billion yuan.

Perhaps the market is on the verge of a shift.

Now that the European stock markets have opened, various stock markets have gapped lower at the open and continue to fall amidst volatility.

Taking the German index as an example, it fell by 0.7% at the open and has since further declined to 1.27%.

Judging by the performance of the three major U.S. stock indices in the futures market, U.S. stocks will likely continue to fall tonight, with the Nasdaq futures contract currently down by 1.1%.

The repeated warnings from Wall Street investment banks that U.S. stocks will fall may soon become a reality.