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Peter Davis

An writer at FOMOdrive

  • Jun 13, 2023
  • 2 min read

Wells Fargo warns of stock market crash risks

Despite the pause this week, the US Federal Reserve will remain committed to combating inflation.

The stock market is highly volatile due to all of this.

Experts are predicting that the US stock market is likely to begin a new bull trend.

AI implementation is anticipated to result in a 14% increase in the stock market by Goldman Sachs.

Wells Fargo has warned that stocks may face greater downside risk as the Federal Reserve continues to battle inflation, which is currently more than double the Fed's 2% target.

Paul Christopher, global equity strategist at Wells Fargo, warned investors to be prepared for a possible decrease in US stocks, as the rally of this year appears to be increasingly unsustainable. Even though the Federal Reserve has decided to pause rate hikes this week, it will not be enough to help the market.

We believe that the markets are being overly optimistic. They are attempting to persuade themselves that interest rates will decrease. However, we do not think that the Federal Reserve will remain inactive for an extended period of time, as inflation is too high," he stated.

Discussions have been reignited in the market as to whether the current surge in shares is the start of a new bull market, or just a correction within the bear market. The issue is that there is no one definitive definition of a bull market and a bear market.

According to Richard Bernstein Advisors, historical precedents show that the rally can definitely develop into a full-fledged bull market.

Ingalls & Snyder stated that while this is a big-cap tech bull market, it cannot be considered a bull market in the broad market sense as only a few stocks are exhibiting strong growth.

Goldman Sachs believes that the stock market could be significantly boosted by the implementation of artificial intelligence (AI) as more businesses recognize and take advantage of its advantages.

The potential growth of the S&P 500 could be anywhere from 5% to 14%, due to the implementation of Artificial Intelligence (AI) which is expected to increase productivity and profits in a variety of economic sectors.

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