Lockstep Moves in US Stocks Suggest More Volatility Is Brewing
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US stocks are increasingly moving in tandem, raising the risks of further turbulence ahead as investors grapple with uncertainty over economic growth and the potential fallout from President Donald Trump’s trade policies.
With the S&P 500 now down around 6% from its all-time high, an index of three-month implied correlations from Cboe stands at its highest level since a selloff rattled global markets in September. Lockstep moves in equities are a red flag for traders, as they can indicate an environment where good stocks get hit along with bad ones when risk appetite dries up.