Fear & Greed Index Hits ‘Fear’ Rating for First Time Since 2023. Brace for a Crash.


  • The Fear & Greed Index has turned to “fear” for the first time since 2023.
  • This could be a sign that a stock market crash is on the horizon.
  • The index measures investor confidence based on a variety of factors.
Fear & Greed Index - Fear & Greed Index Hits ‘Fear’ Rating for First Time Since 2023. Brace for a Crash.

Source: shutterstock.com/Leonid Sorokin

The Fear & Greed Index is in the news today as the measure of investor confidence has turned to “fear” for the first time since 2023.

The Fear & Greed Index is run by CNN and designed to measure the sentiment of investors taking part in the stock market. When the index shows “greed,” it means there’s high investor confidence. However, a switch to “fear” implies that morale among investors is falling.

The Fear & Greed Index uses seven indicators to determine whether investors are feeling greedy or fearful. These include “market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand,” per CNN. Based on these ratings, the index assigns one of five ratings to traders and the market: “Extreme Fear,” “Fear,” “Neutral,” “Greed” and “Extreme Greed.”

Fear & Greed Index: What The Fear Rating Means for the Market

The biggest concern investors are dealing with is what this means for the stock market. The fear rating could be a sign that a crash is about to happen. If that’s the case, it could result in many traders seeing red.

Investors will keep in mind that the fear rating comes alongside increased inflation. That has interest rates remaining high. Recent inflation data also suggests that the Federal Reserve won’t be lowering rates anytime soon.

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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2024/04/fear-greed-index-hits-fear-rating-for-first-time-since-2023-brace-for-a-crash/.

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