A market strategist has warned that a potential market reset may be closer than many investors expect, with key structural and macroeconomic forces aligning.
According to Chris Vermeulen, chief market strategist at The Technical Traders, this downturn will mainly be triggered by two major catalysts that could worsen market conditions.
Speaking during an interview with David Lin published on March 31, Vermeulen pointed out that one of the deeper, longer-term forces is the rapid rise of artificial intelligence and robotics.
He said the accelerated adoption of these technologies will fundamentally reshape industries by changing how businesses operate.
In this case, companies that successfully integrate AI are likely to gain a strong competitive edge through greater efficiency, lower costs, and improved products.
Meanwhile, firms that fail to adapt risk losing market share or becoming obsolete. This widening divide between AI leaders and laggards is expected to disrupt traditional business models, driving displacement across sectors and potentially acting as a market reset that eliminates weaker players.
“It’s going to undercut a lot of businesses that don’t bring AI in is going to get left behind. They’re going to be rich companies that are going to be able to operate at a much lower rate, very efficient, and potentially undercut other players or just excel with better products and add more value and provide things that people need. I think that’s deteriorating,” he said.
Impact of oil prices on markets
In the near term, however, rising crude oil prices stand out as the more immediate threat.
Vermeulen highlighted oil as a key driver with direct implications for both equities and fixed-income markets. A sharp rally in crude prices would likely increase costs across the economy, squeezing corporate margins and dampening consumer spending.
Such a move could also intensify inflationary pressures, complicating the outlook for interest rates and putting additional strain on bond markets.
Under this scenario, equities would face downward pressure as higher input costs and tighter financial conditions weigh on earnings and valuations.
“I think oil is the most imminent kind of direct correlation. If oil pops and rallies here, it’s going to hurt the stock market. It’s going to hurt the bond market. I think it’s going to get absolutely hammered,” he added.
Notably, Vermeulen has previously warned about a possible market downturn, according to a Finbold report published in January.
In that context, the strategist noted that markets are showing signs of exhaustion, with technical indicators pointing to a potential correction in the coming weeks.
He added that recent price action mirrors past market tops, where strong rallies fade into brief consolidations and marginal new highs before breaking down.
The strategist also highlighted weakening momentum, particularly among the so-called Magnificent 7 tech giants that have led gains in the S&P 500 and Nasdaq Composite.
Featured image via Shutterstock
