Article
A Middle-Class Confidence Crisis Could Trigger the Next Stock Market Crash
When someone loses their job, their sense of security collapses, and their belief that hard work guarantees a decent life is shattered, they sell their stocks either immediately—because they must—or as soon as the prices start falling. This reaction is quite probable.
In this post, I will describe a black scenario with a non-negligible probability. I sincerely hope it never materializes.
The scenario revolves around the potential response of the middle class—who actively invest in stocks—to changes caused by the rapid advancement of artificial intelligence.
Morning in an open-space office. Petra, a senior marketing manager at a small tech firm, walks between rows of desks, coffee in hand. A notification pops up on Slack: “New AI tool creates an entire campaign in just three clicks—we are launching a pilot.” Petra feels a sharp pinch in her stomach. It is not that she adores writing banners, but behind those banners lie her mortgage payments and her daughter's tuition. At lunchtime, she quietly opens her brokerage app to check her portfolio—the stocks she is been investing 10% of her salary into for years. Her thumb hesitates over the "Sell" button. For now, she resists.
Petra represents countless retail investors among lawyers, IT specialists, accountants, bankers, managers, and doctors—people who regularly invest part of their earnings into index funds, mutual funds, or stocks. To illustrate: in the U.S. stock market, this group accounts for a substantial share of daily trading volume—estimates suggest the lower double-digit percentages. Collective actions from this group—mass selling or buying simultaneously—can significantly shake stock prices.
Imagine a chain of events: negative headlines about layoffs due to AI appear increasingly often, starting with economic news titles like “Automation Eliminates More Jobs.” The fundamental belief of the middle class—that diligence ensures a decent life—begins to crumble.
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Disclaimer
This article is intended for informational and educational purposes only. It does not constitute financial advice, a recommendation to buy or sell any securities, or a guarantee of future market performance. The views expressed are solely those of the author, who may also be an investor. Investing in financial markets involves risk, and each reader should make their own decisions independently and, if necessary, consult with a licensed professional.
Summary
Common questions on this article's topic
How could AI-driven job losses trigger a stock market crash?
What share of stock market trading comes from retail investors?
What is a stop-loss cascade?
How does social media amplify financial panic?
Could the belief that hard work guarantees a decent life actually collapse?
Is this scenario likely to happen?
If you have any thoughts, questions, or feedback, feel free to drop me a message at mail@richardgolian.com.
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