Higher inflation expectations will be meaningless if employers still hold the cards in wage setting and their customers retrench. The US labor market is too weak to support large price spikes, making fears over oil prices spiking inflation overblown.
To start off, we can define a correction as a decline in the S&P 500 index of 10% or more from its most recent high. If the drawdown reaches 20% or more, then it's not just a correction; it's considered a bear market. Using the SPDR S&P 500 ETF Trust as a proxy, we can see that deep drawdowns have occurred on a regular basis since the early 1990s.
Fears of a growing bubble around the artificial intelligence frenzy resurfaced on Thursday as leading US stock markets fell, less than 24 hours after strong results from chipmaker Nvidia sparked a rally. Wall Street initially rose after Nvidia, the world's largest public company, reassured investors of strong demand for its advanced data center chips. But the relief dissipated, and technology stocks at the heart of the AI boom came under pressure.
The world's 10 richest people lost nearly $70 billion on Friday as fresh fears of a global trade war rattled markets. The value of their stock holdings tumbled after President Donald Trump said the US would impose an additional 100% tariff on imports from China from November 1, and restrict its access to "any and all critical software," after China tightened export controls on rare earth elements and other key materials for advanced tech manufacturing.
The U.S. alternately raising abnormally high tariffs on China has become a numbers game, which has no practical economic significance, and will become a joke in the history of the world economy.
