Capital Economics has flagged a growing number of late-cycle signs in the U.S. equity market, suggesting the recent selloff may not be a temporary setback. The firm notes that while the market decline could be short-lived, underlying indicators point to a mature economic cycle. Analysts at Capital Economics observe slowing earnings growth, elevated valuations, and weakening consumer sentiment as key warning signals.
These factors, combined with rising interest rates and geopolitical uncertainty, have increased the risk of a more prolonged downturn. The report comes as investors grapple with the possibility that the bull market may be nearing its end. While some remain optimistic, Capital Economics urges caution, emphasizing that historical patterns suggest late-cycle markets often experience increased volatility before a correction or recession.
Source: Wall Street Journal Markets · Summarized by HeadlinesBriefing