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We employed the log-periodic power law singularity (LPPLS) methodology tosystematically investigate the 2020 stock market crash in the U.S. equitiessectors with different levels of total market capitalizations through fourmajor U.S. stock market indexes, including the Wilshire 5000 Total Marketindex, the S&P 500 index, the S&P MidCap 400 index, and the Russell 2000 index,representing the stocks overall, the large capitalization stocks, the middlecapitalization stocks and the small capitalization stocks, respectively. Duringthe 2020 U.S. stock market crash, all four indexes lost more than a third oftheir values within five weeks, while both the middle capitalization stocks andthe small capitalization stocks have suffered much greater losses than thelarge capitalization stocks and stocks overall. Our results indicate that theprice trajectories of these four stock market indexes prior to the 2020 stockmarket crash have clearly featured the obvious LPPLS bubble pattern and wereindeed in a positive bubble regime. Contrary to the popular belief that theCOVID-19 led to the 2020 stock market crash, the 2020 U.S. stock market crashwas endogenous, stemming from the increasingly systemic instability of thestock market itself. We also performed the complementary post-mortem analysisof the 2020 U.S. stock market crash. Our analyses indicate that the 2020 U.S.stock market crash originated from a bubble which began to form as early asSeptember 2018; and the bubbles in stocks with different levels of total marketcapitalizations have significantly different starting time profiles. This studynot only sheds new light on the making of the 2020 U.S. stock market crash butalso creates a novel pipeline for future real-time crash detection andmechanism dissection of any financial market and/or economic index.

The 'COVID' Crash of the 2020 U.S. Stock Market