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Market Pricing Has Shifted from "Inflation Driving Up Interest Rates" to "Growth Being Undermined"
Summary:
The market’s pricing logic has shifted from “inflation driving interest rates higher” to “growth being undermined,” and risk assets are coming under increasing pressure. Until sentiment and liquidity conditions stabilize, it is still too early to say that the U.S. stock market has bottomed out.
Sell
TradingUS30
EXP
45635.92
Entry Price
40850.00
TP
47200.00
SL
46319.44 +1079.44 +2.39%
0
Point
Flat
40850.00
TP
CLOSING
45635.92
Entry Price
47200.00
SL
Fundamentals
U.S. stocks traded mixed on Monday. They opened higher in early trading on a wave of optimism, but the gains failed to hold, and the market faced significant selling pressure again toward the close, reflecting that market confidence remains fragile. Investors chose to reduce their positions on rallies rather than chase the rally, indicating that risk appetite has not yet recovered.
At the close, the Dow Jones Industrial Average edged up 0.1%, while the S&P 500 fell 0.39% and the Nasdaq Composite extended its losses to 0.73%. The divergent performance of the three major indices essentially reflects instability within the market—defensive sectors held up relatively well, while growth stocks remained under pressure, indicating a clear shift toward risk aversion among investors.
More importantly, the core pricing logic of the current market has shifted. For some time, the market operated primarily within the framework of “rising inflation—rising interest rates” driven by the war, with high interest rates suppressing valuations as the dominant factor. However, as macroeconomic data and risk events converge, this logic is giving way to a new narrative—“growth disruption.”
In other words, the market is no longer merely concerned about high interest rates; it has begun to worry that the economy itself is being eroded by high interest rates and external shocks, which have a more direct and lasting impact on corporate profits.
Judging by market performance, this shift has already been priced in. Early last week, investors’ reaction to the situation in the Middle East remained at the level of “sentiment-driven volatility,” with the stock market experiencing only a mild pullback. However, as time went on, the selling gradually evolved into a release of systemic risk. The Nasdaq 100 Index has retreated more than 10% from its high, officially entering a technical correction, while the S&P 500 Index is also approaching this threshold.
Although technical indicators suggest the market is gradually approaching oversold territory, this does not necessarily mean a bottom has been formed. Historical experience shows that during periods of shifting macroeconomic narratives, technical oversold conditions alone often serve merely as a trigger for temporary rebounds rather than the starting point of a trend reversal.
Fund flows also confirm this trend. Over the past six weeks, the rolling net selling volume in the U.S. stock market has risen to its third-highest level in the past decade. The intensity of this selling is approaching the panic levels seen at the onset of the pandemic, indicating a determined exodus of capital. However, it is important to note that the current selling has not yet reached extreme peak levels; there is still some distance to a true “liquidity stampede,” which also suggests that the emotional correction is not yet complete.
In conclusion, the key issue for U.S. stocks is not whether they have fallen enough, but whether the negative factors have already been fully priced in.
Given that growth forecasts remain subject to downward revisions, liquidity conditions remain tight, and market participants have not yet fully digested recent risk events, the market will need to wait for clearer signals—such as a stabilization in earnings expectations, a clear policy direction, or a substantial return of liquidity—before it can truly bottom out.
Technical Analysis
The Dow Jones Industrial Average opened higher and initially extended its gains, but prices subsequently reversed course and came under downward pressure again, failing to sustain the rally. Recent price action has formed lower lows, indicating that the short-term trend has turned bearish. This development suggests that sellers are regaining control of the market following the loss of momentum in the recent uptrend. Although intermittent rebounds may occur, the overall trend remains bearish.
Trading Recommendations
Trading Direction: Sell
Entry Price: 45620
Target Price: 40850
Stop Loss: 47200
Valid Until: April 30, 2026 23:55
Support: 44531, 43786, 43350
Resistance: 46511, 46971, 47467
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