Are the stock markets in the US, Japan, and South Korea signaling a 15% correction risk?

Major investment banks Goldman Sachs and Morgan Stanley have issued warnings one after another. They indicated that major stock indices in the US, Japan, and South Korea could face a 15% correction phase.

What's happening?

The overheated AI market reaches a turning point

In recent years, technology stocks and AI-related shares have continued to reach abnormal highs. However, investment bank analysts point out that “expectations are too forward-looking.” They warn that the gap between actual corporate earnings could trigger a correction.

Macroeconomic Pressure

At the same time, the following factors are putting pressure on market sentiment:

• Continuation of the interest rate rise trend
• Signals of global economic growth slowdown
• Monetary tightening policies of central banks in various countries

Market Reaction

In Japan, the Nikkei average, South Korea's KOSPI, and the U.S. benchmark indices have already strengthened their defensive stance, leading to increased selling pressure.

Points Traders Should Pay Attention To

• Next release of US inflation data
• Comments from central banks including the FRB
• Changes in the liquidity environment until the end of the year

It is at a crossroads as to whether this adjustment will result in a “healthy reset” or lead to a “long-term increase in volatility.”