Stock Market Crash: The risk of a huge drop in the stock market has increased - Chris Wood

Stock Market Crash: Christopher Wood, Global Head of Equity Strategy at Jefferies, recently said that the risk of a massive fall in the US stock market (US Stock Market Crash) has increased. He said in his Greed and Fear report that this risk is not only due to high valuations. Rather, its real reason is passive investment, where everyone owns the same stock. Wood further said that the increase in tariffs is also bad news.

Decline in US stock markets
Earlier this week, the Dow Jones fell by 10 percent in a single session. While the S&P 500 has fallen by 5 percent and the Nasdaq by 6 percent. Donald Trump's tariff policy has increased the chances of recession in the country. Due to the decrease in US economic activities, the country's GDP has declined for two consecutive quarters. According to Fitch Ratings, US tariffs are currently standing in the way of the Federal Reserve's ability to further reduce interest rates. The rating agency believes that the US growth rate in 2025 is likely to be slower than their March 2025 estimate of 1.7 percent, as tariffs are higher than expected. Will India also be affected? According to experts, no major impact of Trump's decisions has been seen on the Indian stock market so far. However, he further said that its effect will be seen on some sectors and investors may withdraw from these sectors to avoid risk. Experts said that Indian macros are in a strong position. However, during this time domestic factors like company results and their guidance, summer weather conditions and its impact on economic activities, progress of monsoon and its impact on inflation, RBI policies and negotiations with the US regarding tariffs will be monitored. Business Standard quoted G Chokkalingam, founder and research head of Economics Research, as saying that if there is a recession in the US, the dollar will weaken and oil prices will also fall. This is a good sign for India. Due to this, investors will turn to those markets where there are more possibilities of growth. 

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