LIVE MARKETS-What could take markets down?

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WHAT COULD TAKE MARKETS DOWN?

Deutsche Bank notes how risk assets are still in a relatively strong position, with recent all-time highs in the S&P 500 and STOXX 600, and tight credit spreads.

However, the past 24 hours show that "markets remain very sensitive to downside news", with bad news on tech, especially AI, and macro having the potential to cause big problems.

With that in mind, and even as several factors are now looking more positive, including the Fed's pause in rate hikes, Henry Allen, macro strategist at the German bank, has looked into what could bring down markets.

He points to six factors to keep in mind. Here they are:

1) Lagged effects of past rate hikes

2) Higher inflation takes the steam out of risk assets

3) More aggressive tariff scenarios play out

4) Economic data starts surprising on the downside

5) The hype around AI starts to fade

6) A negative geopolitical surprise or escalation

(Danilo Masoni)

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