Deutsche Bank highlights three risks to US equity market rally

Despite a strong performance this year, the stock market remains exposed to several potential challenges, Deutsche Bank noted in a report on Tuesday.

While markets have experienced some volatility, they have rebounded quickly after the factors causing sell-offs eased.

• “This shows that any of these risks could trigger another downturn, especially if they persist or worsen over time,”

Risks:

1. The first risk is an economic slowdown, pointing to the significant market dip in August 2024 following a disappointing jobs report.
2. The second is escalating political tensions, such as those in April that unsettled markets during geopolitical conflicts in the Middle East.
3. Lastly, an inflation shock poses a major threat to market stability.

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S&P 500 update:

Risk of FOMO seems to be winning out so far.

This article was written by Eamonn Sheridan at www.forexlive.com.