Clissold said recent sharp moves in equities and commodities show that trading activity is being driven by short-term positioning rather than long-term signals. “This has nothing to do with the fundamentals,” he said, adding that momentum traders are “chasing whatever the next trade may be” and quickly reversing positions as news changes.
Also Read | China fund exodus hits record $40 billion in one week as investors rush to gold: EPFR
He said uncertainty around global trade, economic growth and geopolitics is keeping markets unstable. According to Clissold, volatility will persist as long as key questions around growth and trade remain unanswered.
Concerns around US monetary policy are also adding to market swings, as attention turns to the announcement of a new Federal Reserve chair. Clissold noted that markets often test a new Fed chair in the early months after appointment. “On average, during the first six months after a new Fed chair, the Dow experiences a 15% correction,” he said.
He added that tensions could rise if political pressure clashes with the Federal Reserve’s independence, especially if inflation data remains firm while growth stays resilient. Clissold said this could lead to market instability until clarity emerges on interest-rate policy.
Also Read | 2026 global growth risks are overstated, says Nomura’s Robert Subbaraman
On the US economy, Clissold said growth is expected to remain steady in the first quarter, supported by higher consumer spending linked to tax refunds. However, he warned that momentum could slow later in the year as the impact fades and spending among lower-income consumers remains limited.
Corporate earnings, while still holding up, may also face pressure. Clissold said the rate of companies beating expectations has started to ease, and future growth may depend more on productivity gains and the use of artificial intelligence (AI). He said earnings growth could come in at high single digits, lower than current expectations, which may lead to revisions and a market pullback later in the year.
For the full interview, watch the accompanying video
Catch all the latest updates from the stock market here
Catch the latest Budget 2026 expectations updates here
Catch all the latest updates from the Q3 earnings here
