--- title: "Sentiment has already collapsed, why hasn't the US stock market crashed yet?" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/39445376.md" description: "It's Monday, and the mood hasn't improved. On the surface, oil prices are high, interest rates are creeping up, and global markets are worried about high inflation and low growth. But why hasn't the US stock market seen that kind of completely out-of-control crash yet? First, the reason the stock market hasn't completely crashed isn't because there's no risk, but because it naturally has a cushion. The stock market is a place with delayed reactions. It's not that it's not sensitive, but there's a layer of automatic buying and structural rotation supporting it from behind. Even if sentiment is terrible, capital might not all flee at the first moment. The problem is, this cushion hasn't been as solid lately as it was before..." datetime: "2026-03-23T09:59:43.000Z" locales: - [en](https://longbridge.com/en/topics/39445376.md) - [zh-CN](https://longbridge.com/zh-CN/topics/39445376.md) - [zh-HK](https://longbridge.com/zh-HK/topics/39445376.md) author: "[James小韭日记](https://longbridge.com/en/profiles/25149055.md)" --- # Sentiment has already collapsed, why hasn't the US stock market crashed yet? It's Monday, and the mood hasn't improved. On the surface, oil prices are high, interest rates are pushing upward, and global markets are worried about high inflation + low growth. But why hasn't the U.S. stock market experienced that kind of completely out-of-control crash yet? ### **1\. The reason the stock market hasn't completely crashed isn't because there's no risk, but because it naturally has a cushion.** The stock market is currently a place with delayed reactions. It's not that it's insensitive, but there's a layer of automatic buying and structural rotation supporting it from behind. Even if sentiment is terrible, funds may not all flee immediately. The problem is, this cushion hasn't been as solid lately. Stock funds are mostly in a state of net outflow. While there is some sector differentiation, the market is still seeing defensive outflows, with only some areas still finding places that make sense to huddle together. This is also why I've always felt that the stock market often isn't the first to tell the truth. It has mechanical allocation forces like index funds, ETFs, and pension funds, as well as the habitual thinking of buying the dip after a small drop. As long as the market hasn't hurt enough, these funds won't stop all at once. So you see a typical dislocation: sentiment has already soured, but the index doesn't look disastrous yet. But I think this phenomenon is starting to loosen. ### **2\. The ones that really tell the truth first are actually credit, cash, and short-duration assets.** If you want to know if the market is really scared, often don't look at stocks first, look at credit and cash. Because these areas are less stable, when institutions get nervous, their moves are more direct. This signal has been quite clear recently. High-yield bond funds have seen significant withdrawals; meanwhile, U.S. high-yield bond yields have risen to **above 7%**, the highest level since last June. The meaning behind this move is simple: institutions have already started dumping the most fragile, most funding-environment-dependent assets first. And cash. The March institutional survey shows fund managers' cash allocations jumped from **3.4%** to **4.3%**, the fastest single-month increase since the pandemic. This change is particularly critical in my view because it shows it's not just a simple rotation between stock pools, but that some are starting to pull money back into their pockets. ### **3\. The stock market's filter isn't completely shattered yet, but it's already starting to leak.** So putting these clues together, my current judgment is actually very clear: **The stock market's shock absorber is still there, but it's not as stable as it was some time ago.** The previous contradiction of terrible sentiment but funds still pushing in is now slowly turning into bad sentiment, funds starting to loosen, but the stock market hasn't fully priced in all the risk at once. This is also why I'm not too willing to see the current moment as a particularly comfortable bottom-fishing window. But I don't want to sound too pessimistic either. Because so far, we haven't reached the final position yet, and the stock market still has a chance to repair itself. But if oil prices continue to grind at high levels, active funds continue to withdraw, and the credit market continues to fall first, then stocks will ultimately have to make up for it. **This article is only my personal stock trading experience and does not constitute investment advice~**$Dow Jones Industrial Average(.DJI.US) $NASDAQ Composite Index(.IXIC.US) $S&P 500(.SPX.US) ### Related Stocks - [DOG.US](https://longbridge.com/en/quote/DOG.US.md) - [.DJI.US](https://longbridge.com/en/quote/.DJI.US.md) - [.IXIC.US](https://longbridge.com/en/quote/.IXIC.US.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md)