Many analysts and bloggers have posted an optimistic picture of both the US and Singapore stock market. In this article, I will be on the side of the contrarian and explain why the stock market could crash between 10% to 20% this year.

Key Risk Factors That Could Trigger a Crash in 2026

1. Elevated Valuations, Especially in US Equities

The US market—particularly large-cap technology stocks—has been trading at above-historical average valuations. Metrics like:

• Forward P/E ratios

• Market cap-to-GDP (Buffett Indicator)

suggest that expectations are too optimistic.

Risk: If earnings growth disappoints or economic growth slows sharply, valuations could compress quickly.

2. US Recession Risk Still Hasn’t Disappeared

While the US economy has proven resilient, several warning signs remain:

• Slowing corporate margins

• Rising defaults in lower-quality credit

• Commercial properties sold at a loss

Historically, major market crashes coincide with recessions, not just valuation concerns.

Risk: A delayed or “rolling” recession in 2026 could act as the catalyst.

Geopolitical and Policy Shock Potential

Markets in 2026 will still be navigating:

• US–China strategic rivalry

• Ongoing global conflicts

• Trade restrictions and supply chain reshoring

Risk: A sudden geopolitical escalation or policy misstep could spark a sharp risk-off event.

Market Cycles

History often repeats. This time is no different. In 1966, the S&P ended the year down 13.09%. In fact, it fall more than 22% from peak to trough during that year. This year it will happen again as market cycles repeat every 60 years.

Chinese Astrology

This is the Bazi chart of 2026. In order to ascertain whether the stock market will crash in 2026, 3 criteria have to be fulfilled together:

1. No wealth element
2. Metal element is being countered
3. Fire element too strong

There is totally no wealth element in the 2026 Bazi chart. At the same time, the metal element is being countered by the strong fire element. Hence, I will expect the US stock market to end the year down. Likewise, the STI index will not be spared too.

Sectors that will outperform in 2026

Given this scenario, I expect the following sectors to do well in 2026.

1. Precious metals which are gold and silver will outperform the S&Ping
2. Energy or anything that power energy production.
3. Critical minerals like Copper. I believe Copper could be the best performing asset class this year.

Many analysts and bloggers will still continue to write about AI. Yes no doubt AI is a trend we cannot ignore. But once it is overhype which it has been for the past 3 years, it will enter into a state of correction and may even burst this year. I don’t just recommend stocks — I guide you through your entire wealth journey. Connect with me via telegram here for a friendly chat on how to see ahead and identify trends before others do. Disclaimer: Please note this article is written for educational purpose only. The the stocks mentioned in this article is not a financial recommendation to buy or sell and investors need to do their own research and due diligence before investing in any stocks.