Assets from gold to crypto are moving together because they are all correlated by one factor: deep investor uncertainty about the future geopolitical and economic world order. Investors are skittish and paranoid, unable to form a stable mental model of the future, leading to erratic, deer-like market behavior.

The primary driver of market fluctuations is the dramatic shift in attitudes toward risk. In good times, investors become risk-tolerant and chase gains ('Risk is my friend'). In bad times, risk aversion dominates ('Get me out at any price'). This emotional pendulum causes security prices to fluctuate far more than their underlying intrinsic values.

Markets react sharply to clear, quantifiable events like tariff announcements but are poor early-warning signals for gradual, harder-to-price risks like the erosion of democratic norms. This creates a dangerous complacency among investors and policymakers.

Policies designed to suppress market volatility create a fragile stability. The underlying risk doesn't disappear; it transmutes into social and political polarization, driven by wealth inequality. This social unrest is a leading indicator of future market instability.

Unlike typical economic cycles with a clear baseline and tail risks, the current environment is defined by radical uncertainty. The combined unknowns of erratic economic policy and AI's transformative potential create a "flat distribution" where extreme outcomes like a depression or an industrial revolution are nearly as likely as a baseline scenario.

The convergence of geopolitical, economic, and technological stressors overwhelms human working memory, causing a 'cognitive load collapse.' This isn't just market uncertainty; it’s a specific, well-documented psychological failure mode where decision-making abruptly degrades.

Current market bullishness is at levels seen only a few times in the past decade. Two of those instances led to corrections within three months. This euphoria, combined with low volatility and high leverage, makes the market vulnerable to even minor negative news.

Crossmark's Chief Market Strategist identifies investor complacency as her primary concern. The market's collective belief that earnings will continue to support upward momentum, despite underlying risks, creates a dangerous environment where investors are unprepared for shocks.

Contrary to intuition, widespread fear and discussion of a market bubble often precede a final, insane surge upward. The real crash tends to happen later, when the consensus shifts to believing in a 'new economic model.' This highlights a key psychological dynamic of market cycles where peak anxiety doesn't signal an immediate top.