Is a Market Correction Coming?

Despite recent volatility, we remain constructive on the economic cycle and confident in our call for investors to double down on diversification this year. And while much of this investment is funded through internal cash flow, mega‑cap technology companies are starting to rely more heavily on debt to finance the rapid expansion as they transition away from historically capital‑light business models. For investors looking to add exposure, a diversified approach across companies and business models may offer a more prudent path, in our view. After years of tech-led dominance, the market is experiencing a meaningful rotation toward traditional “old economy” sectors, a shift that aligns well with the TSX’s heavier exposure to these areas and that has contributed to its recent outperformance. We make no representations or warranties regarding the advisability of investing in any particular securities or utilizing any specific investment strategies. Authors/presenters may own the stocks they discuss.

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Investors instead track high-frequency alternative data to gauge consumer resilience amid gaps in official reporting. The prior shutdown already delayed key releases—such as inflation data, retail sales, housing activity and the Bureau of Labor Statistics’ employment report—and the agency announced it will delay its January employment report. Government shutdown risk returned as a potential volatility catalyst as well. Tom Hainlin, national investment strategist, U.S. Policy has played a supporting role in improving expectations for growth and earnings.

Check out the chart below to see the losses from some of the stocks with the most perceived exposure to OpenAI since the S&P 500 set its last record high on Jan. 28. The start-up is banking on significant growth over the next few years, combined with substantial inflows from investors, but neither of those things is guaranteed. Fortunately, the market recovered to set new all-time highs on each occasion, but are we headed for another steep correction or even a bear market? Investors should make investment decisions based on their unique investment objectives and financial situation.

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The AI nervousness happens to be overlapping with a similar degree of concern for the U.S. job market. Edward Jones and its independent affiliate in the United States, collectively, serve more than 7 million investors. Edward Jones’ Canadian advisors may only conduct business with residents of the province(s) in which they are registered.

Historical investment performances are no indication or guarantee of future success or performance. TSM stock hit a record high on the news. Interest Rate Derivatives trading volumes had a record Q as a result of macroeconomic volatility. Celebrating five decades of innovation, growth, and achievement within Australia’s financial landscape. Compass first quarter supported by net new business and volume growth AI fever hits bond markets – tactical play or a bigger bubble?

• Several online banks and neo-brokers offer better prices via Xetra for trading all stocks and ETFs/ETPs available there.
• If a correction of 10% were to happen, then investors could expect to see a bottom somewhere around 6,300.
• And while much of this investment is funded through internal cash flow, mega‑cap technology companies are starting to rely more heavily on debt to finance the rapid expansion as they transition away from historically capital‑light business models.
• We help banks, brokers, regulators, financial infrastructure operators, and buy-side firms solve their toughest operational challenges.

If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised TNAU: Maize research institutes guide financial adviser of your choice. Parham, R and R Kaniel (2016), “Media attention and investment decisions”, VoxEU.org, 6 March. Media consumers should be aware of the big news bias and that it affects even the most trusted media.

In this episode, Emma Wall and Matt Britzman unpack a busy week for markets and what it means for investors. I think the AI industry poses less risk because some of the worst-case scenarios are already priced into individual stocks. According to data from Challenger, Gray & Christmas, many businesses said economic conditions, a loss of contracts, and restructurings triggered the layoffs, while some even said they were closing down entirely.

When interest rates rise, it typically becomes more expensive to borrow money, which can slow economic activity and lead to declines in stock prices as investors adjust their expectations. Yes, stock market corrections can occur even when the economy is strong. That range and average helps distinguish corrections and bear markets from routine market volatility, such as smaller pullbacks that may not reflect a broader reassessment of growth, inflation or earnings.

Fears of a Japan debt crisis dismissed as share markets soar

Diversification matters because different assets and sectors can respond differently to growth, inflation and interest-rate shifts, which can help reduce reliance on any single market outcome. The S&P 500 has spent 29% of time since 1927 trading 10% or more below a recent high, reinforcing that double-digit pullbacks are not unusual. Corrections occur often enough that long-term investors generally treat them as part of the market’s regular rhythm rather than as rare events. The average correction  (10%-20% decline) lasts 17 days but any single episode can be shorter—or longer—depending on whether the decline reflects temporary sentiment shifts or deeper economic stress.

Given the media’s natural tendency to focus on out-of-the-ordinary events, the big news bias in media reporting is difficult to avoid. Rosling et al. (2018) hypothesise a similar pattern for several indicators of economic development. Ordoñez (2013) documents stronger changes in macroeconomic variables during recessions than recoveries. Unlike other forms of media bias, the big news bias does not stem from cognitive heuristics or a conscious decision to slant the news toward a particular perspective. The restricted model explains about half the total negativity bias in the nightly news. The DAX rose at an annualised rate of 7% between 2017 and 2024 — an average gain of four points per trading day.