The financial markets are experiencing significant turbulence once again, as both stock and cryptocurrency assets have plummeted, resulting in the loss of billions of dollars within a single day. On September 3, the top-tier tech stocks known as the “Magnificent 7” saw a staggering $550 billion in market capitalization wiped out. This elite group comprises Google parent company Alphabet, Amazon, Apple, Meta (formerly Facebook), Microsoft, Nvidia, and Tesla. Over the past two years, these companies have consistently outperformed the broader S&P 500 index in terms of growth.

One of the most notable developments involves Nvidia (NVDA), a leading player in artificial intelligence technology. The company is poised for its largest daily decline since April 2024, following the issuance of an antitrust subpoena by the United States Department of Justice (DOJ). This legal scrutiny has significantly impacted investor confidence.

Historically, September has been the most volatile month for stock markets, a sentiment echoed by the Kobeissi Letter, which remarked, “We’re starting September off on a volatile note.” This trend appears to be holding true as we witness severe fluctuations across various financial sectors.

Turning our attention to the cryptocurrency markets, they are currently experiencing a dramatic downturn reminiscent of the Black Monday crash that occurred on August 5. The total market capitalization of cryptocurrencies has plummeted by over 6%, resulting in approximately $100 billion exiting the market within the last 24 hours. Although this decline is substantial, it is worth noting that nearly double this amount was lost during the August 5 crash. The current market cap stands at $2.07 trillion, marking its lowest point since August 7.

Bitcoin, the flagship cryptocurrency, has seen a sharp decline of more than 5%, falling to $55,746 during the Asian trading session on Wednesday morning. This marks its lowest level since the early August crash. However, Bitcoin has shown signs of recovery and is trading at around $56,700 at the time of writing.

Ethereum, another major cryptocurrency, experienced an even more severe drop of 7%, falling to just above $2,300 before staging a minor recovery as it bounced back slightly. The broader altcoin market is also suffering, with most high-cap altcoins experiencing losses ranging between 5% and 7%.

According to Coinglass, a staggering 74,062 traders were liquidated in the past 24 hours, resulting in total liquidations amounting to $196.4 million. The majority of these liquidations were long positions, further exacerbating the market downturn.

September has traditionally been a bearish month for cryptocurrencies, with Bitcoin recording losses in six out of nine previous Septembers and only minor gains in three. Despite the current bearish trend, analyst “CrediBULL Crypto” has suggested that downside targets around the $56,000 level have been met. This indicates that a relief rally may be imminent, potentially offering some respite to beleaguered investors.