The resurgence of Fear of Missing Out (FOMO) in the stock market has investors worried about a potential market downturn. The S&P 500 has seen significant growth over the past year, driven by strong earnings and a decrease in inflation rates. However, much of this growth can be attributed to a select few stocks, like Nvidia Corp., leading some analysts to fear a possible market melt-up.
Investors are grappling with the decision of whether to jump in and capitalize on the current market momentum or stay cautious amidst concerns of a potential market bubble. With the S&P 500 experiencing a 30% increase in the past year, driven by a handful of key stocks, experts are warning of the dangers of a potential market downturn fueled by excessive speculation and unsustainable growth patterns. The reliance on a few stocks, such as those in the artificial intelligence sector, has prompted speculation about the sustainability of the market rally and the possibility of a looming correction.