Stock markets back in correction mode - rising yields on the bond market are weighing on the stock market from the perspective of a financial expert

Stock markets back in correction mode - rising yields on the bond market are weighing on the stock market from the perspective of a financial expert

According to a report by www.ad-hoc-news.de, the stock markets may be in correction mode again. Rising bond market yields and concerns about escalation in the Middle East could be the cause of this development. Interest rate-sensitive growth stocks from the technology sector are particularly affected.

Yields on the bond market in the USA have risen continuously in recent weeks and are now reaching a new high of around 5% for the 10-year government bond. This weighs on the stock market as investors may switch to more profitable investment options.

In particular, the Nasdaq Composite and the DAX are showing signs of a new downward wave. For both indices, the price recovery ended just above the level of the previous wave 4, which is a typical price target for countermoves according to the Elliott wave theory. In order to give the all-clear, the respective peaks of the recovery would have to be exceeded.

Historically, the Nasdaq Composite and the Dow Jones often return by the end of October. The Dow Jones usually does not record any new correction lows. The author of the article therefore expects the stock market to continue to be weak until the end of October.

This development could have implications for both investors and the financial industry. As interest rate-sensitive growth stocks are affected, other asset classes such as value stocks or bonds could become more attractive. In addition, investors could increasingly turn to safe havens such as gold or government bonds.

It remains to be seen whether the weakness in the stock market will continue and whether an actual correction will occur. Investors should monitor developments closely and, if necessary, adjust their portfolios to minimize possible losses.