In this video: a few weeks ago we put out a video saying that the S&P 500 was likely to drop 10%. It has now dropped 5%, so let us check in and see how this may develop from here. Video by Benjamin Cowen.
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Insights Today
-Geopolitical Conflict: The ongoing war in Iran and the closure of the Strait of Hormuz have created a massive oil supply shock, sending Brent crude prices above $100 per barrel.
-Inflation & Rates: Higher energy costs are stoking inflation fears, leading investors to believe the Federal Reserve may keep interest rates higher for longer than previously anticipated.
-Technical Weakness: The index recently broke through major support levels, including the 200-day moving average for some tech-heavy benchmarks, signaling further potential downside.
-High Valuations: Entering 2026, the S&P 500's forward P/E ratio was above 22, a historically high level that makes stocks more vulnerable to "bad news" pullbacks.
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