S&P 500 Rally Powered by Nvidia Bubble Raises Risk of Correction
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The S&P 500 has attempted to correct recently due to negative macro factors, but the corrections were denied by surges in heavily weighted stocks like Meta and Nvidia.
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Nvidia is up over 60% in 2023 due to high demand for its AI/machine learning chips. This demand is temporary and Nvidia is in a bubble.
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When Nvidia's bubble bursts, it could negatively impact the broader market due to Nvidia's heavy weighting in the S&P 500.
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The Fed is likely to shift to a more hawkish stance soon, which could trigger another S&P 500 correction attempt.
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The author's S&P 500 rating is still a Hold, but their broader position is turning bearish due to systematic macro risks taking dominance over the Nvidia-fueled rally.