Fears Are Overtaking Facts in Market Sell-Off
Investors seem to be searching for a reason to sell. That’s a big sentiment shift from just a few months ago.
Seeing red.
Photographer: Bryan R. Smith/AFP/Getty Images
Putting your finger on what’s spooking the market in the past week or so has been difficult.
The recent sell-off appeared to be launched by fears of rising interest rates. When rates stopped rising, trade tensions were the new No. 1 concern. But on Tuesday morning, the announcement that Donald Trump would meet with China’s Xi Jinping at the upcoming G-20 summit to discus trade didn’t calm markets. Instead, worry appears to have settled on the idea that we have hit peak profits, fueled by a warning from Caterpillar Inc. on Tuesday morning. A low unemployment rate and resurgent inflation, along with price-raising tariffs, will slice into bottom lines even if the economy continues to expand, is how the theory goes.