Market Caution

Definition ∞ Market caution signifies a period of heightened prudence and reduced risk appetite among investors. During such times, participants tend to be more reserved in their investment activities, often waiting for clearer signals or reduced uncertainty. This sentiment can precede or accompany periods of market correction.
Context ∞ News reports indicating market caution often point to decreased trading volumes, increased demand for stable assets, and cautious commentary from financial analysts. The prevailing sentiment is often shaped by macroeconomic factors, regulatory developments, or significant geopolitical events.