American indices are falling after last week’s records. Several major risks raise fears of worsening losses. In this context, dividend-paying stocks offer several key advantages that should not be overlooked.
Last week, the and the both reached new record highs, while the and the briefly surpassed the 50,000 point level.
However, market sentiment has weakened since then. On Monday, the S&P 500 fell 0.07%, marking its second straight day of losses, while the Nasdaq fell 0.51% as technology stocks came under pressure. The decline follows a stronger sell-off on Friday, when the S&P 500 lost 1.2%, the Nasdaq lost 1.5% and the Dow Jones lost 1.1%.
There are several factors behind this market nervousness, and many of them are likely to remain important in the near term.
1. Inflation
A major concern is inflation. rose 3.8% year-over-year in April, marking its fastest pace since May 2023. On a monthly basis, the CPI rose 0.6%, largely due to a 17.9% rise in energy prices. also came in stronger than expected. April’s PPI increased 6% from a year earlier, the largest increase since December 2022, while monthly PPI increased 1.4%.
These inflation figures have significantly changed expectations regarding American monetary policy. Markets now see a 50% chance of another crisis this year, up from just 1% a month ago, according to the CME FedWatch tool.
2. Rising yields
Another major problem is rising long-term bond yields. The yield hit 4.631% on Monday, its highest level since February 2025. Morgan Stanley previously identified the 4.5% level as an important point where higher yields begin to put serious pressure on stock valuations, and the market has now passed that threshold.
3. Iranian War
The war in Iran is another major source of uncertainty for the markets. The conflict, which has continued since the end of February, remains high and increases pressure on consumer price inflation. Economists estimate that even if the conflict ends soon, global supply chains could still take between two and six months to fully recover.
4. Earnings
Another immediate risk for the markets is…
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