There’s Just One Brick Left Keeping The Stock Market Standing

Reda Farran

3 months ago3:23 mins

There’s Just One Brick Left Keeping The Stock Market Standing

When the S&P 500 briefly entered a bear market earlier this month, it was because stock valuations have been cratering. But the scenario could’ve played out much worse if the single other factor that’s been propping up stocks hadn’t held firm. The trouble is, there are reasons to believe it might not hold out much longer.

Why did falling valuations drag down the market?

The US Federal Reserve has embarked on one of its most aggressive rate-hiking cycles ever this year in an attempt to combat the country’s hottest inflation in over four decades. Those higher interest rates (and the resulting jump in bond yields) have knocked down stock valuations, especially among the more expensive-looking growth stocks that have come to dominate the US stock market.

The chart below, conducted usi

Limited introductory offer

Subscribe Now 50% Off

Get full access to daily stories, insights, deep-dives, interviews, podcasts, and more

Have an account? Log in