The S&P 500 faces possible declines as equity concentration reaches historically high levels, cautions Marko Kolanovic, a former chief market strategist at JPMorgan Chase (NYSE:JPM).

Key Insights from Kolanovic

• Kolanovic discussed the precarious dominance of the ten largest stocks on Bloomberg’s Odd Lots podcast, stating that this situation is untenable and may prompt a cyclical downturn.
• His forecast predicts the S&P 500 to decline from its record high above 6,000 to the 5,000s in the coming year, with a potential plunge to the 4,000s if economic and political uncertainties escalate.
• This bearish sentiment stems from worries about declining AI-driven growth momentum, geopolitical tensions, and the prospect of a U.S. economic slowdown.
• Additionally, Trump’s newly announced tariffs have already stirred market fears, intensifying volatility across market sectors.
• The emergence of a cost-effective AI model from the Chinese startup DeepSeek has sparked doubts about the sustainability of significant investments in big tech AI companies, leading to last week’s notable selloff.

For investors keeping tabs on the market, accessing tools such as:

• Market Biggest Gainers – Stay updated with the leading stocks in the market.
• Sector Historical Performance – Evaluate performance trends across various market sectors to inform future strategies.

With AI advancements, geopolitical tensions, and policy changes shaping the market landscape, investors will closely monitor the S&P 500’s performance in the weeks ahead to navigate the complex financial landscape.