The S&P 500 could see a decline as stocks face historically high levels of concentration, according to Marko Kolanovic, former JPMorgan Chase (NYSE:JPM) chief market strategist.
Key Takeaways:
- Kolanovic, speaking on Bloomberg's Odd Lots podcast, warned that the dominance of the ten largest stocks is unsustainable and could trigger a cyclical downturn.
- He expects the S&P 500 to drop from its record high above 6,000 to the 5,000s this year, with a potential further slide to the 4,000s if economic and political risks escalate.
- His long-standing bearish outlook stems from concerns over slowing AI-driven momentum, geopolitical risks, and a possible U.S. economic slowdown.
- New tariffs announced by President Donald Trump over the weekend have already shaken global markets, intensifying fears of volatility.
- The emergence of a low-cost AI model from Chinese start-up DeepSeek has raised concerns about the sustainability of big-tech AI investments, causing a sharp selloff last week.
For deeper financial insights, explore:
With AI developments, geopolitical tensions, and policy shifts shaping market dynamics, investors will be closely watching how the S&P 500 reacts in the coming months.
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