Prediction: A Stock Market Crash Is Coming. Here's What Investors Should Do Based on Almost 70 Years' Worth of History.
The S&P 500 stock market index looks increasingly vulnerable to a sharp correction.
Overview
History suggests the stock market tends to trend higher over the long term, but it's hard to ignore the growing chorus of risks right now. First of all, oil prices are soaring due to the ongoing geopolitical conflict in the Middle East, stoking an inflation spike that prompted the U.S. Federal Reserve to raise interest rates last week.
Second, artificial intelligence (AI) labs such as Anthropic, OpenAI, and xAI want to slow the pace of development to minimize any potential risks to humanity. This could spark a pullback in semiconductor stocks, which have propped up the broader market for the last few years.
Details
All of this comes as the benchmark S&P 500 (SNPINDEX: ^GSPC) index trades at its second-highest valuation in history, behind only the peak of the dot-com internet bubble in the year 2000. This could leave the market extremely vulnerable to a crash, but several decades of history say there's a way investors can capitalize.
Source
Originally published at www.fool.com.