A rollercoaster ride in the stock market in arriving

On Wall Street, US indices have set record after record, driven by the euphoria of a seemingly calm market. The S&P 500 and the Nasdaq remain near all-time highs, fueled by the Federal Reserve’s rate cuts and a US economy that continues to surprise with its resilience. Analysts and experts have been warning (for months) that the market could soon correct sharply. Yet there are no signs of relenting.

Now Mark Spitznagel, the man who made billions during the darkest market phases, is evoking a scenario similar to that of 1929. According to him, the stock market could experience a rollercoaster ride in 2026, first with a final rally, then a steep decline. A divisive warning, because history teaches us that markets love to punish precisely when optimism becomes blind.

Watch out for these signs, says Spitznagel

All financial bubbles have one thing in common: the feeling that the party never ends. Today, the US economy is resilient, consumption is solid, and corporate America is generating profits at an impressive rate.

However, some signs of imbalance are beginning to emerge. The share of portfolios invested in stocks by American households is at an all-time high, at 45.4% in the second quarter of 2025, even higher than during the dot-com bubble (Federal Reserve/FRED data). Institutional investors, according to State Street data, had not had such exposure since 2007, on the eve of a crash that still stings.

The current context is very reminiscent of the moment of irrational euphoria described by Alan Greenspan in the 1990s, when stock markets continued to rise without a break, with a progressive reduction in the perception of risk. It’s no coincidence that the equity risk premium, or the expected excess return on equities over risk-free assets is at its lowest level in at least five years. Credit spreads (investment grade and high yield) have also progressively narrowed since their peaks in 2023.

Stock market roller coaster in 2026?

For Mark Spitznagel, the outcome won’t be sudden, but dramatic. Before the crash, the S&P 500 could reach as high as 8,000 points, a leap of more than 20% from current levels.

The comparison with 1929, for him, isn’t just rhetorical: then, as now, investors were blinded by blind faith, convinced that the climb was endless. The euphoria was contagious, the risk increasingly subtle, and the fear of being left out (what we now call FOMO) fueled the rush.

It’s the same psychological mechanism that excites passengers as the roller coaster slowly ascends and turns to terror as it nosedives. And the markets, cyclical by nature, have never ceased to remind us that every euphoric phase already harbors the seeds of the next correction.

Spitznagel’s predictions are sobering. He is not, in fact, an improvised prophet, but a manager trained by Nassim Nicholas Taleb, the author of "The Black Swan." During the Flash Crash of August 24, 2015, when the Dow Jones lost more than 1,000 points in a matter of minutes and volatility spiked, Spitznagel’s fund (Universa Investments) made approximately $1 billion in a single day with its tail-risk hedging strategy: a a hedge that becomes extremely profitable during moments of panic. The same scheme worked with the Lehman Brothers bankruptcy in 2008 and the collapse triggered by Covid in 2020.

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The information and considerations contained in this article should not be used as the sole or primary basis for making investment decisions. The reader retains complete freedom in their investment decisions and full responsibility for making them, as they alone know their risk appetite and time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public to save.