Here's one reason investors shouldn't get too excited about this week's stock-market rebound
This week's stock-market rebound in the US is likely due to a short squeeze and investors chasing momentum, rather than a fundamental shift in the market. Despite the rebound, traders and analysts are urging caution, citing concerns about further escalation and the potential for another downturn.
US stocks saw a sharp rebound earlier this week. The gains were driven by a short squeeze, according to traders at major Wall Street institutions. Recent desk notes from J.P. Morgan and Goldman Sachs suggested that the rebound was not a sign of a larger trend. Instead, it was likely the result of investors covering their short positions. The rebound came after a tough month for global markets. Despite the gains, traders are urging caution. They point to concerns about further escalation and the potential for another downturn. The S&P 500 was still trading below its 200-day moving average. Traders at J.P. Morgan said the rebound was driven by a 'global squeeze' triggered by President Trump's comments on the US-Iran conflict.
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