Although the recent sell-off looks similar to previous corrections, but if you dive deeper into the internals of the market, it doesn't.
It's clear that the speculative positions in EV, batteries, solar, alternative energy & all the high flying (New paradigm companies which will change the world in the future) is unwinding and as apparently, the bag holders are retail who are buying the dip in those companies (After buying up the last one tenth of those stocks explosive rally).
Looking at Energy, Banks, Financial Services, etc...They are seeing strong inflows. Basically the market is embracing for higher yields, so all those highly leveraged companies (Heavy on R&D & spending) will get hit hard because funding becomes more expensive & they don't have enough cash flows to support themselves, so eventually they will have to slow down on R&D spending, i.e. ambitious plans will have to slow down.
Even if the Fed keeps rates low for 2 years, it doesn't matter, those companies are high risk borrowers, they can't access money at 1%-3% anymore.
Besides that, large tech companies are also being adjusted for reality. Reality that they will not grow in the next 3-5 years like they did in the past decade. Retail are also heavily into those tech names (assuming those are very safe names to be in, like Amazon, Facebook, Apple, Google, etc...). Those became the blue chips of the new generation of investors.
In my opinion, the Fed will step in to depress rates, but this won't help much as inflation already started to find it's way to the economy, so real rates will stay elevated. Money don't want risk anymore, at least in the medium term, this is why safer bets in Energy, Financials & Banks, Utilities & Food are being played now.
