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The huge rally we experienced in markets this year fueled by a rebound in technology stocks, optimism around AI and hopes of the Fed lowering interest rates next year came to an end in September. The Fear & Greed Index we like to follow to gauge sentiment, dropped sharply from greed territory at the start of September to extreme fear by September 27th.
The personal consumption expenditures (PCE) price index showed an increase of just 0.1% in August and reflects the lower consumer confidence numbers we have been seeing in the last two months. A jump in the price of oil, 30-year mortgage rates of over 8%, and the Fed indicating that they will not only increase rates one more time this year but are likely to hold it higher for longer spooked the markets.