Investors marched right up to the edge in the first months of 2021, got a good look at what lay beyond, and have taken a few steps back to think through the hazards.
Across several fronts in multiple asset classes, the markets have backed off from extremes in risk appetite and growth assumptions, with last week's stock-index shakeout and partial recovery revealing these adjustments vividly.
Stocks came into April hot, running to a mid-month peak accompanied by stretched technical conditions and ebullient sentiment. The S&P 500 finished at 4185 on April 16, up nearly 8% in three weeks and 11% in six weeks. It sat more than 16% above its 200-day average, a heady overbought reading from which it had pulled back hard in September and late January.