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Investors are 'bracing for bad news' instead of reacting to it

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The US stock (^DJI,^GSPC, ^IXIC) sell-off fueled by tariff uncertainty continues. Catalysts host Madison Mills sits down with Vanguard head of investor behavior research Andy Reed to discuss current investor sentiment.

"If the theme of 2024 was steady optimism, in 2025 [the theme] is really shaping up to be one of really rising anxiety," Reed says.

The analyst notes in the past, "the market moved first and then sentiment changed in reaction to the market," but "what's different this time around is that the market was hitting its all-time high in, roughly, mid-February, and at the same time, investor sentiment was moving in the opposite direction."

"Sentiment was kind of moving ahead of the market, and I think what we've seen in the last few days is not necessarily unexpected given that investors seem to be bracing for bad news and not simply reacting to it."

To watch more expert insights and analysis on the latest market action, check out more Catalysts here.

This post was written by Naomi Buchanan.