According to the latest Bloomberg Markets Live Pulse (MLIV) survey, most market investors believe that the US stock market will experience a correction in the second half of this year or next year. The unexpected risks in the field of artificial intelligence and the potential headwinds of the US economy are the two main concerns of investors.

Most market investors believe that the US stock market will experience a correction in the second half of this year or next year. The unexpected risks in the field of artificial intelligence and the potential headwinds of the US economy are the two main concerns of investors.

The surge in US stocks has left investors feeling anxious.

In 2024, the US stock market performed very strongly, and the S&P 500 index frequently hit new highs. Since October 2022, driven by technology stocks, the NASDAQ index has accumulated a rise of about 50%. The current bull market in the US stock market has outperformed the median of all bull markets since 1957. Looking at the monthly chart, the S&P 500 index has risen for 6 out of the past 7 months from November last year to the present.

From June 17th to June 21st, Bloomberg conducted a survey of 586 investors, including Wall Street portfolio managers, economists, and individual investors. The survey results showed that although US stock investors have no plans to sell stocks for the time being, they are increasingly worried about the high valuation of US stocks.

The survey showed that about three-quarters of the respondents said they would maintain or increase their exposure to the S&P 500 index in the next month.

However, about half of the respondents said that the US stock market will experience a correction of at least 10% in the second half of this year, while another 35% of respondents said that the US stock market may experience a correction in 2025.

This general cautious sentiment is also evident in the options market, where traders have been hedging potential losses in technology stocks.

The US stock market may not have much room for further growth this year, as the US economy and corporate profits continue to grow and the financial system remains liquid.

Most respondents believe that the US stock market has further room for growth this year, but the increase may not be significant due to concerns about high valuations.

The survey's median estimate is that the S&P 500 index will close at 5606 points at the end of 2024, which means that it is only nearly 3% higher than last Friday's closing. However, this is already more optimistic than the median expected by Wall Street strategists, who expect the index to be about the same as the current level at the end of the year.

These strategists wrote in the report that they recommend investors to "temporarily maintain stock holdings. But be prepared for more defensive positions, especially in the third quarter."

Michael O’Rourke of Jones Strading pointed out: "We are currently in a bubble, and the risk of the US economy slowing down in the second half of this year is high. The P/E ratio should shrink... This is a very dangerous level for long-term stock investors."

The most worrying factors for investors are artificial intelligence and economic risks.

Artificial intelligence is the main driving force behind the 15% increase in the stock market this year, but it is also seen as the most likely factor to trigger selling: 31% of respondents are wary of negative risks in the field of AI.

In addition, investors' concerns about the economy should not be ignored. About 27% of respondents said that as the US unemployment rate rises, the stock market may fall; and nearly one-fourth of the respondents are concerned that the risk of unexpected inflation in the United States will keep the Fed on hold for a longer time.

The US unemployment rate rose to 4% in May, the highest level since early 2022. Economists at Goldman Sachs warned that the US employment market is at a potential "inflection point", and further weakness in demand for workers will affect employment.

"The overall economic situation in the United States is confusing-inflation seems to be subsiding, but employment seems to be slowing down," said Kim Forrest, chief investment officer of Bokeh Capital Partners, in an email.

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Editor/Somer