Categories: Business

Correction of stock markets: 4 things fueling the sale in addition to the prices

Trump’s trade war is not the only thing that derailed the stock market in 2025.

While the planned prices have exerted the most pressure in recent weeks, the sale has been accelerated by a multitude of data points which suggest that the economy is on a brisable foot.

Here are four factors that embittered mood among investors while the second quarter started.

1. Confidence drops

Consumers regularly feel worse about the state of the economy. Consumer confidence has dropped for the fourth consecutive month in March, reaching its lowest level since 2021, according to the latest Conference Board survey.

The expectations of expectations, a wide measure of how consumers think of income, commercial activity and labor market prospects, fell to 65.1 this month, its lowest level in 12 years. It is below a key level of 80, a threshold which generally reported an upcoming recession.

The Conference Board / Nber

CEOs do not feel very shredded either. According to a survey carried out by the group of chief executive officer, on average, the general directors evaluated the commercial conditions in March, approximately 20% less than the conditions of January.

Meanwhile, the prospects of CEOs for what will look like in commercial conditions in 12 months of 28% of the levels in January, the most pessimistic business leaders since 2012, said the firm.

General manager

The atmosphere of the slowdown is palpable and Wall Street takes note.

“In the United States, there is a clear crisis of confidence,” Manish Kabra, the head of the American actions of Societe General on Tuesday. “Events to date this day have led us to highlight our negative opinions on the NASDAQ-100 and to emphasize that commercial uncertainty stimulates our commercial call for the S&P 500 to fall to 5555. Most of these events are” known “.

2. The trade in AI was sagged

The high -end AI actions that have stimulated the market in recent years did not be doing so well in 2025. Even before the most rigid prices shake the stock market, investors questioned the longevity of trade.

In January, Deepseek, a China AI tool, surprised the markets with a more profitable model to compete with American peers like Chatgpt. Since then, investors have been wondering why IA “hyperscalers” – companies with large AI ambitions like Meta Platforms and Amazon – have spent so strongly on chips and other technologies. More importantly, they wonder when they could see a return to a so massive Capex linked to AI.

The magnificent ETF of Seven Seven, which has almost equal positions in all seven magnificent shares, is down 15% up to date. At the end of last week, the seven actions of every seven years were negative for the year, with Meta the last of the cohort to abandon her earnings.

Doubts have also been running for months on the question of whether the best IA companies, like Nvidia, will be able to maintain their flea sales in the years to come.

“At the top of our concern list is the potential of excess calculation as well as more difficult export rates and / or restrictions. We think that the keys to the next major movement in the actions of artificial intelligence (AI) will depend on the clarity of the tariffs,” wrote Angelo Zino, a Cfra Research Monday, wrote in a note on Monday.

3. Inflation always looks too hot

Inflation remains greater than the target of 2% of the Fed, with personal consumption expenditure inflation, the favorite measure of the Fed, accelerating 2.8% in February, against the annual increase of 2.5% of the previous month.

The warmer inflation is bad news on two fronts. On the one hand, this could mean that the FED has less room to reduce interest rates this year, which means that interest rate pressure will continue to weigh on shares.

On the other hand, higher inflation makes stagflation fears, an economic scenario of the worst case which describes a slowed economy with stubborn prices. Such a case is even more difficult to manage for the Fed than a typical recession, because central bankers will not be able to reduce rates to increase the economy without catching up higher prices.

In a March Bank of America survey, 71% of fund managers said they had seen the risk that the global economy will have stagflation over the next 12 months.

World Research of the Bank of America

The survey also revealed that Record shares were sold among fund managers, with an investor allowance at the US stock market falling at their lowest levels in about two years.

“Faced with a modest stagflation, we believe that the Fed will remain on hold,” said strategists in a note. “The risks are biased towards lower growth and even higher inflation.”

4. The labor market shows signs of slowing down

Hiring is not as strong as in recent years. In addition to this, the reductions related to the DOGE while the government is pursuing large budget reduction plans is uncertain about future job data.

The unemployment rate remained at a historic level of 4.1% in February, but continuous complaints of unemployment increased regularly in the past year, according to data from the US Employment and Training Administration.

The layoffs also seem to accelerate. US employers announced 172,017 job cuts in February, an increase of 245% compared to job cuts announced the previous month, and an increase of 103% compared to the cuts announced in February of last year, according to data from Challenger, Gray and Christmas.

Challenger, gray and Christmas

A lower labor market attaches fears of a potential recession in 2025, that more of Wall Street forecasters have expressed in recent weeks.

In a recent note, Goldman Sachs’ strategists have reduced their GDP growth forecasts while increasing their unemployment forecasts and the probability of a recession this year.

“We noted our probability of recession from 12 months from 20% to 35%, reflecting our lower growth forecasts, our confidence with confidence and our declarations of White House officials indicating the desire to tolerate economic pain,” the bank wrote in a note.

remon Buul