Wall Street Warns of Potential US Stock Market Collapse Amid Geopolitical Tensions
Several top Wall Street firms are sounding alarms about the US stock market's vulnerability as geopolitical tensions escalate. Veteran strategist Ed Yardeni now estimates a 35% probability of a market meltdown this year, up from 20%, citing the oil price surge and Fed policy constraints. "The US economy and stock market are stuck between Iran and a hard place," Yardeni wrote in a client note, highlighting how persistent oil shocks could force the Fed to balance inflation risks against rising unemployment.
JPMorgan's $4.8 trillion asset management arm predicts the S&P 500 could face a 10% correction, potentially dropping to 6,720, with options markets pricing in another 2.9% decline this week. The tech sector faces particular uncertainty as Middle East conflicts disrupt global markets. While the S&P has gained 16% over the past year and 72% over five years, prolonged conflict could erase these gains.
