After Two Years of Growth, North American Stock Markets Are in the Danger Zone

After two years of extraordinary stock market gains, volatility is back with a vengeance this year. First we saw bond yields rise sharply, hitting high-valuation stocks hard. Then Russia invaded Ukraine, bringing back uncertainty and sending financial markets lower. However, it remains unclear how the war in Ukraine will end and how it will impact the real economy. The market noise generated by the crisis, along with more fundamental factors, all point to higher volatility. But even if the war ends quickly, market turmoil may not.