The adjustment looks to be driven significantly by technical factors, including trades on the Japanese yen, big-company tech stocks, and low volatility reaching the end of their runs.
What markets are experiencing today is an unwinding of that bullish positioning.
Indeed, the alarm bells sounded by the latest round of data are loud. But with Federal Reserve rate cuts incoming, there is still room to envision the economy skirting a downturn.
When things are calm in financial markets, traders plow more money into risky strategies. Volatile conditions lead these trades to go sideways and fuel further market volatility.
#market-adjustment #federal-reserve-rate-cuts #tech-stocks #japanese-yen-trades #financial-markets-volatility
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