THe is a sound The alarm bells are getting harder to ignore. The U.S. stock market ended the first quarter of 2024 with a stellar rally, with benchmarks vinegar&P The 500 index had risen in 18 of the past 22 weeks. That’s not the case now; it’s fallen for the past three weeks. Meanwhile, looking at individual stocks, it’s clear how investors have swung from enthusiasm to anxiety. Nvidia is vinegar&P The 500 winning streak caused the company’s stock price to more than double between October and March. On April 19, it fell 10% in just one day, wiping more than $200 billion from the company’s market cap. What terrible news story caused this crash? Nothing.
If there’s a reason for this unease, it’s the receding prospect of lower interest rates. U.S. consumer prices rose 3.5% in the year to March. That’s too high for the Federal Reserve to consider lowering rates anytime soon unless something disastrous happens. So investors are cutting back accordingly. But something else is happening. As the magnitude of Nvidia’s selloff suggests, the turning point has more to do with crowd psychology than sober analysis. Markets have recovered a bit in recent days, suggesting uncertainty is high. The question now is whether the mood will get even darker.
