The article discusses signs that the AI-driven stock market rally, which started in November 2022, is losing steam due to various economic indicators. Retail sales dropped notably, and Walmart's cautious outlook for 2025 raises concerns. With the S&P 500 trading at high earnings multiples and inflation significantly above the Federal Reserve's target, many fear a market correction. Retail investor exposure is at an unprecedented level, evoking memories of the 1990s dot-com bubble. Experienced investors see parallels to previous market crashes, cautioning against blind optimism.
The combination of tariffs, an overbought market, and the Fed's likely interest rate stance point to trouble ahead for the AI-driven stock market rally.
Retail investors are exposed to stocks at a level unseen since 1997, indicating a potential vulnerability to market corrections.
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