Debt ceiling drama and rate hikes could send stocks toward sell-off

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Debt ceiling drama and cracks caused by rate hikes could send the stock market lurching towards a sell-off as volatility batters investors, BlackRock says

The US debt ceiling crisis and financial cracks stemming from higher interest rates will send the stock market through another wave of volatility and a potential sell-off, BlackRock warned.on Monday, strategists pointed to growing signs of unease in financial markets as the deadline to raise the US borrowing limit ticks closer.

That means the current debt ceiling crisis could spark similar volatility in markets, strategists warned – which will add on top to the existing financial stress stemming from higher interest rates in the economy. But BlackRock isn't bearish on all stocks. In fact, it's overweight emerging market stocks, which could benefit in the short term from China's economic restart, central banks nearing the end of their policy tightening, and a weaker US dollar.

 

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