Global stock markets hit records driven by investor FOMO

Global stock markets continue to reach record highs despite geopolitical tensions in the Middle East and ongoing concerns regarding interest rates. Experts suggest that the current market rally is being driven significantly by ‘Fear of Missing Out’ (FOMO), as institutional investors fear being left behind during a rally rather than fearing a market downturn.

In the United States, the S&P 500 has seen a strong surge following a period of sideways movement, with technical indicators such as the ratio of call to put options reaching their highest levels in four years. Similarly, the German Dax reached a new all-time high, bolstered by strong earnings in the U.S. technology sector. The Swiss Market Index has also recently hit record levels.

However, some analysts warn of potential risks. Indicators suggest markets may be technically ‘overbought,’ and recent sell-offs in semiconductor, AI, and space stocks highlight how quickly sentiment can shift. Factors such as high valuations, thin summer liquidity, and upcoming Federal Reserve minutes regarding interest rate policy are being closely monitored by investors.