Stock market crash could be imminent as warning signs pile up

With Federal Reserve rates above 5% and expensive oil, some argue the stock market will fall at least 10% over the next three months. There is no date or certainty: only indicators that, taken together, are hard to reconcile with current highs.

## High rates and valuations that won't come down

The Federal Reserve keeps interest rates above **5%**. In **2022**, when it raised them, the market fell hard, and rates were then below today's level. That precedent is what makes people nervous.

Price-to-earnings ratios for the big tech stocks in the **S&P 500** remain inflated. According to the discounted cash flow model used by half the market, with higher rates those valuations should have corrected. They haven't.

## Expensive energy and an AI that doesn't generate revenue

Oil is expensive and diesel is very expensive, right in the middle of harvest season. If fuel eats into the margins of transport and farming, the economy slows down. That's mechanics, not opinion.

Something similar is happening with artificial intelligence. Some argue that **OpenAI**, **Anthropic** and **SpaceX** have accumulated valuations of between **1 and 2 trillion dollars** with revenues that don't back them up. The comparison going around is that of a mobile phone retail business.

## France, the ECB and political risk

**France** is on the verge of bankruptcy, so the argument goes. That would force the **European Central Bank** to choose between buying debt or raising rates. Either option puts pressure on US rates.

Iran, Russia and other international flashpoints could act as a catalyst for a fall. And there is a rumor circulating that **Trump's** circle is manipulating the market until the midterm elections on **November 3**.

This is not a prediction. It's a review of warning signs. If you invest, consult a professional.