The U.S. stock market is experiencing a rather painful correction, and the selloff has hit not only the overheated tech sector but also defensive assets like gold. On the surface, the factors are quite obvious: May inflation jumped to 4.2% amid the Iran war and rising oil prices, and the market's overbought status has long demanded a pullback.
But it would be a mistake to blame the current drop solely on macroeconomics or geopolitics. I believe the main nerve of the selloff is the upcoming Federal Reserve meeting. The market is frankly afraid of uncertainty and simply doesn't know what to expect from new Fed Chair Kevin Warsh at his first meeting as head of the central bank.
