Expectation trading
Everyone should understand that the financial market is a place for buying and selling expectations. This year's stock prices reflect next year's corporate forecasts, profit margins, debt ratios, etc.
Excessive gains lead to losses
Interest rate cuts and increases are adjustments to the macro economy, and their impact on the micro economy is a layered feedback. However, the financial market is also a place for trading expectations, and generally will digest macro adjustments in advance. When events occur as expected, it is time to buy expectations and sell facts.
In simple terms, if everyone is optimistic about a company's development next year, the stock price will rise in advance. Similarly, when expectations disappear, unless the facts exceed expectations significantly, the sellers will dominate the market!
All negative news has been exhausted, leading to positive outcomes
As negative news continues to emerge, the market also declines. At a certain stage, the impact of negative news on the market becomes weaker and weaker, and may even rebound significantly when negative news appears, indicating that the negatives have been fully digested. Even if negative news appears later, its impact on the market will become weaker and weaker, until positive news emerges, at which point the market gradually cools down and returns to the previous state.