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U.S. Market Bull Run Showing Signs of Strain

  //stocks-investing.news-articles.net/content/202 .. u-s-market-bull-run-showing-signs-of-strain.html
  Published in Stocks and Investing on Saturday, January 24th 2026 at 12:24 GMT by MarketWatch
      Locales: UNITED STATES, CHINA, JAPAN, GERMANY

By Anya Sharma, Financial Chronicle

Published: January 24th, 2026

WASHINGTON - The relentless eight-year bull run in U.S. markets is showing undeniable signs of strain. While Donald Trump's recent election victory has undeniably accelerated the shift, experts increasingly agree that a potential bear market was already simmering beneath the surface, driven by a confluence of global economic challenges and concerning domestic trends. The initial shockwaves of his policies are now prompting a significant reassessment of U.S. asset holdings by international investors.

Peter Kenny, founder of Kenny Asset Management and a veteran of international finance, recently stated that "The U.S. bear case was already building before Donald Trump won." His observation reflects a growing consensus amongst analysts - the current economic climate presents a unique and potentially volatile landscape.

The extended period of prosperity has masked some crucial vulnerabilities within the U.S. and global economies. Slower growth in China, the ongoing repercussions of Brexit impacting Europe, and persistent challenges in emerging markets have collectively dampened global demand, directly impacting U.S. export performance. Simultaneously, American companies are grappling with increased competition, squeezing profit margins and eroding their ability to sustain the record valuations seen in recent years. Perhaps most critically, the U.S. national debt, now exceeding $30 trillion, continues to balloon, exacerbated by rising interest rates - a dangerous combination that increases the risk of a fiscal crisis.

Trump's administration has introduced a further layer of complexity. His stated protectionist trade policies are disrupting established global supply chains, leading to increased costs for U.S. businesses and fueling inflation. Beyond the concrete economic implications, the administration's unpredictable rhetoric and policy shifts are contributing to a palpable sense of uncertainty amongst foreign investors. These investors, historically a cornerstone of U.S. market stability, are now actively questioning the risk-reward proposition of holding U.S. assets.

"Foreign investors are reassessing their exposure to U.S. assets," Kenny elaborated. "They're saying, 'Is it worth the risk?'" This flight to safety could trigger a significant decline in U.S. asset values. The potential for a weaker U.S. dollar is also a significant concern, further impacting the purchasing power of international investors and potentially leading to a downward spiral.

Michael Purves, chief global strategist at Weiser Family Office, echoes this sentiment. "The market is overvalued," Purves asserts, adding that "The odds of a bear market are rising." While a bear market isn't inevitable, the probability is demonstrably higher than it was just months ago.

Key Contributing Factors to the Rising Bear Case:

• Global Economic Slowdown: Reduced demand in China and Europe directly impacts U.S. exports and overall economic growth.
• Shrinking Corporate Profitability: Increased competition and rising costs are eroding the profitability of U.S. companies, questioning the sustainability of current market valuations.
• Unsustainable National Debt: The mounting national debt and rising interest rates pose a significant threat to U.S. fiscal stability.
• Policy Uncertainty: Trump's trade policies and unpredictable communication style are undermining investor confidence.

Looking Ahead:

Analysts predict that the coming months will be characterized by increased volatility and a potential re-evaluation of U.S. asset values. While a rapid and dramatic market collapse isn't guaranteed, the underlying economic weaknesses and the uncertainty surrounding Trump's policies create a challenging environment for investors. Diversification and a cautious approach to risk management are increasingly being recommended. The era of easy money and relentless growth may be drawing to a close, and a period of adjustment - potentially a bear market - appears increasingly likely.