The latest federal rate increases have aggravated the ongoing market correction, and investor sentiment is very bearish across all sectors. Despite tightening monetary policies, high core inflation is raising the probability of a recession. Recently, the S&P 500 index sank to its lowest level since March 2021. And the fear of more stringent monetary policies soon is expected to keep the markets under pressure in the near term.
Though large-cap stocks tend to be dependable and offer stable returns during periods of market volatility, those that are overvalued, with weak fundamentals, may not be as beneficial. The bearish investor sentiment regarding large-cap stocks is evident in the Vanguard Mega Cap ETF’s (MGC) 18.5% loss year-to-date.
