Wells Fargo issued a report on Monday warning that the U.S. stock market, which has thrived this year, may be approaching a "hangover phase". After the U.S. presidential election, the stock market's rally seems disconnected from economic data, and this disconnection will ultimately need to be resolved, which could mean a correction in the stock market. (Background: Arthur Hayes: Crypto market expected to crash on 1/20, Trump will use devalued dollar to boost the U.S. economy) (Additional context: Is the U.S. economy in a severe recession? Analysts: Surge in bankrupt companies resembles the financial tsunami period) This year has been a bountiful year for the U.S. stock market, with the S&P 500 index soaring over 27% year-to-date. However, according to Business Insider reports, Wells Fargo warns that the exuberant rally following the U.S. elections may lead the stock market into a "hangover phase" in the short term, with the S&P 500 index potentially dropping by as much as 7%. Disconnection between economic data and the stock market Wells Fargo's report on Monday pointed out that the disconnection between the U.S. stock market and the economy is widening. Despite mediocre U.S. economic data, the stock market indices have continued to rise after the presidential election. The Bloomberg U.S. Economic Surprise Index tracks the gap between the actual performance of economic data and market expectations; currently, this index is just slightly above zero, indicating that although optimism has driven the market higher, there have been almost no surprising economic data recently. Wells Fargo's senior global market strategist Sameer Samana expressed concern: "This worries us, as the optimism in the stock market has remained high since the election. In other words, investors seem to be focusing solely on the potentially bright future while completely ignoring the disappointing economic data at present. We believe this disconnection will eventually need to be addressed." Sameer Samana noted that, from a technical indicator perspective, the stock market is nearing the "overbought region". Investors should be "cautious of the hangover phase". The S&P 500 index closed at 6037 points on Thursday, and in the short term, the index may hit a cap at the recent high of 6,090 points. If the index shows a downward trend, it may find support around the 200-day moving average of about 5,515 points, which means a potential pullback of 7% from current levels. However, despite possible volatility in the short term, Wells Fargo remains optimistic about the stock market outlook for 2025. The bank's previous report predicted that the S&P 500 index could reach 6,500 to 6,700 points by the end of 2025, with economic and corporate earnings growth providing strong support. Other institutions also issued warnings. Wells Fargo is not the only one warning of risks; BCA Research believes that due to stock prices being at historical highs and potential weakness in the U.S. economy, the stock market may enter a bear market early next year. Société Générale also stated that, based on signs of weakness in the labor market, the U.S. economy still faces the downside risk of "profit compression". Investors should be aware that if the U.S. stock market experiences a correction, the cryptocurrency market may also face downward risks. As part of the risk assets, the cryptocurrency market often has a certain correlation with the stock market. The increase in economic uncertainty may further weaken the market's risk appetite. Related reports How to judge U.S. economic recession? Here are 15 key indicators. Bitcoin's villain Peter Schiff: Trump's support for BTC will only weaken the U.S. economy, wasting billions in taxpayer money. Yellen: The U.S. economy is resilient, "no red lights have flashed", achieving a soft landing, or will pass upon Biden's departure as Treasury Secretary. "Wells Fargo warns: The disconnection between U.S. stocks and the real economy is widening; beware of a significant short-term crash". This article was first published by BlockTempo (BlockTempo - the most influential blockchain news media).