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Investing.com -- The recent sharp sell-off in leading US stocks is more than a temporary downturn; it signals a broader market shift, according to Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory and asset management organizations.
Green’s comments came in the wake of Monday’s market turmoil, where the Nasdaq experienced a 4% drop, its worst single-day decline in two and a half years, and the S&P 500 fell almost 3%. The sell-off was primarily led by tech stocks that were once market leaders.
Green stated that the market is undergoing a significant recalibration, with investors reassessing their strategies. High-growth stocks, which have been driving the market for years, are now facing pressure on their valuations as investors reassess risk.
The CEO pointed out that the conditions that fueled the last bull market have changed, leading to a tightening of liquidity, climbing bond yields, and questioning of equity valuations, especially in the most crowded trades. This is not a routine pullback, but a reset, according to Green.
The impact of this market shift extends beyond the tech sector. As uncertainty increases, investors are withdrawing from high-risk positions, leading to repercussions across different sectors. Stocks that previously thrived on momentum are now struggling as capital moves towards areas providing more stability.
Green emphasized that the sell-off doesn’t imply all equities are in trouble. Rather, it indicates that being selective is now more crucial than ever. Defensive sectors, undervalued global markets, and alternative assets are now attracting investors seeking stability and growth outside of the usual names.
Concluding his observations, Green stated that the sell-off isn’t over, but it also presents an opportunity for those who can anticipate and adapt to the market’s next phase of leadership.
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