Fu Peng: Comparison of US stock valuation kill scenarios, what insights does it provide for the current situation [Fu Peng Says 22]

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Comparison of US stock valuation kill scenarios and current implications

Watching the world from the trading desk, Fu Peng offers financial commentary. This video was recorded on the evening of March 9, 2026.

This episode of Fu Peng Says will focus on current issues related to US private credit, mainly comparing the common features of the 2022 and current US stock markets.

The chart includes the logarithmic trend of Nvidia since 2021, the S&P Software & Services Index, and private credit-related indices and investment portfolio ETFs, visually illustrating problems in the private credit sector since last year. Through complete data sets and highlighted annotations, it clearly shows the market correlations between the two periods.

The black box in the chart corresponds to the valuation kill phase of the entire 2022 market. Because a logarithmic scale is used, Nvidia’s decline during this period was about 70%, and the ARKK fund managed by Woodie was down about 75%. Bitcoin, not shown in the chart, fell from $60,000 to $20,000, a significant drop. The details about the valuation kill in 2022 have been discussed multiple times in previous “Fu Peng Says” shares, so they will not be repeated here.

From a macro liquidity factor perspective, the overall US stock market was in a tightening cycle of rate hikes in 2022, a widely recognized feature. External influences mainly stemmed from two sources: first, the Russia-Ukraine crisis caused a sharp rise in oil prices; second, post-pandemic household sectors remained strong due to government stimulus policies, jointly driving inflation higher. To address this, the Federal Reserve adopted short-term rate hikes to tighten liquidity, with rate hikes being a rate price factor; it’s important to note that at that time, long-term US Treasury yields remained around the current average of 4.2%.

Comparing to the current market, from Q4 2025 to Q1 2026, macro liquidity is also in a tightening state or expectations thereof, with related effects gradually emerging. First, household resilience, while not as strong as in 2022, remains robust; second, shortages have re-emerged, initially driven by the Russia-Ukraine crisis, now influenced by Middle Eastern Iran-related tensions, both pushing oil prices higher and creating tightening expectations and pressures. Unlike 2022, the current interest rate curve shows a deepening contango structure, mainly due to conservative policies after Karen Wosh took office and market expectations of balance sheet reduction, whether through quantitative tightening or the limited room for further rate cuts, both constraining liquidity.

In summary, household resilience and Middle Eastern tensions are two major factors making current macro liquidity similar to 2022, both in a relatively tight state. Next, we analyze from a mid-chain industry perspective. In 2022, the upstream AI industry chain (represented by Nvidia) was in a disruptive restructuring phase, with core debates focusing on whether Nvidia’s products are gaming graphics cards or AI computing power, which also coincided with Nvidia’s valuation kill process.

By late 2025 to early 2026, the upstream AI industry chain has stabilized. Since the related positive news was realized in July of that year, Nvidia’s industry certainty has become clearer, and current valuation pressures are gradually transmitting to mid-stream software sectors. Market performance shows significant declines in mid-stream software stocks, similar to the valuation kill phase of the upstream AI chain in 2022. Meanwhile, the ARKK fund continues to decline, and Bitcoin’s price has fallen from $110,000 to around $60,000, a substantial drop. Overall, both market cycles exhibit valuation kills under liquidity contraction, with the difference being the transmission path—2022 focused on upstream industry chain, while now it is on mid-stream sectors. Essentially, this reflects liquidity flowing from the denominator to different numerator sectors, which is the core reason why the highlighted sections in the chart are comparable. Market volatility is also rising in tandem.

Reviewing the development of the AI industry chain in 2022, from early venture capital to Nvidia establishing industry certainty, the Silicon Valley bank crisis occurred. The market was concerned that this event might trigger a US liquidity crisis. It’s important to clarify that the Silicon Valley bank failure was not the cause of the liquidity crisis but a consequence—its root was in the valuation kills of upstream AI risk investments and related ARKK sectors in 2022. Silicon Valley Bank is highly linked to venture capital (VC, PE), and its liquidity issues were a chain reaction from prior valuation kills.

The hot topic of private credit today bears a strong resemblance to the Silicon Valley bank incident. Statistics show that 40% to 60% of private credit investments focus on software sectors. Therefore, the current problems and potential localized defaults in private credit are essentially the result of valuation kills in the software sector, not the cause of a systemic liquidity crisis. This aligns perfectly with the logic of the 2022 Silicon Valley bank event.

In summary, the core similarity between 2022 and the current market is the valuation kills under liquidity tightening, with the main difference being the stage of AI industry development—early industry in 2022, now in a stable upstream and pressured mid-stream phase. This is the main reason for comparing data from these two periods: under liquidity tightening, markets tend to show similar valuation kills and chain reactions. Additionally, Bitcoin, as an important market indicator, further confirms this logic through its price fluctuations.

This concludes today’s sharing. It is recommended to connect this content with previous episodes for a comprehensive analysis.

Risk Warning and Disclaimer

Market risks are inherent; investments should be cautious. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions herein are suitable for their particular circumstances. Invest accordingly at your own risk.