The Stock Market and Bond Market Flash Warnings Not Seen in Decades. History Says the S&P 500 Will Do This Next.
The Motley Fool
by newsfeedback@fool.com (Trevor Jennewine)February 14, 2026
AI-Generated Deep Dive Summary
The stock market and bond market have sent out serious warnings in recent months—not seen since the dot-com era—which signal a high-risk environment for investors. The S&P 500 has surged nearly 80% over the past three years, but these flashing alerts suggest that the market may be overdue for a sharp decline. Historically, such signals have preceded significant downturns, and experts warn that this time could be no different. Investors are now facing a precarious situation where potential returns are low, but risks remain high.
The warnings come as both stock and bond markets show signs of strain. In the past, similar patterns have occurred during periods of excessive speculation and overvaluation, such as the dot-com bubble in the late 1990s. Today, however, the situation is compounded by record-high valuations in the stock market and historically low yields in bonds, creating a perfect storm for risk-averse investors. The combination of these factors suggests that markets may be heading for a correction, potentially sharper than expected.
For readers interested in finance, this matters because it underscores the importance of reevaluating investment strategies in light of these signals. While past performance does not guarantee future results, history often repeats itself, and investors would do well to prepare for possible market volatility. Staying informed about these warning signs can help individuals make more informed decisions about their portfolios and risk tolerance.
Understanding the historical context is key to grasping why this matters. Market corrections are a natural part of the economic cycle, but they can still be painful for those unprepared. Investors should consider diversifying their portfolios and being cautious about overexposure to equities or fixed-income securities. While the S&P 500 has shown remarkable resilience in recent years, the current signals suggest that the road ahead may not be as smooth.
Ultimately, this article serves as a reminder that even after years of growth, markets can shift rapidly—and often without warning. For those navigating the financial landscape, staying vigilant and adaptable is crucial. Whether you're a seasoned
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Originally published on The Motley Fool on 2/14/2026