The Clock Is Ticking on Wall Street's $1.5 Trillion Powder Keg, and History Says Time Is Almost Up
Yahoo Finance ·
For much of the last 17 years, the bulls have been in firm control on Wall Street. Save for the five-week COVID-19 crash in February-March 2020 and the nine-month bear market in 2022, the Dow Jones Industrial Average ( ^DJI +0.46% ) , S&P 500 ( ^GSPC +0.05% ) , and Nasdaq Composite ( ^IXIC -0.64% ) have made a habit of trending higher since the end of the financial crisis. While long-winded bull markets are nothing new for Wall Street, we also know they don't last indefinitely. Headwinds have been mounting, ranging from the historical priciness of equities to the growing likelihood that the Federal Reserve will raise interest rates to stabilize prices. But perhaps no downside catalyst stands out more than margin debt -- aka Wall Street's $1.5 trillion powder keg. Margin represents the amount of money an investor borrows from their broker to short-sell (wager against) or purchase securities.
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