Gold markets whipsawed Thursday—surging to a fresh record before tumbling as traders took profits—while the sell-off spread into crypto and stocks amid rising economic and geopolitical jitters.
Spot gold briefly touched an all-time high before sliding back in afternoon trading, though it remained up about 24% for the month. Bitcoin fell more than 6% by Thursday afternoon, extending a broader retreat across risk assets. U.S. stocks weren’t immune either, with the S&P 500 sliding after Microsoft fell 12%.
The turbulence comes as the dollar continues to weaken and the U.S. trade gap widens. On Tuesday, the dollar slipped into bear-market territory, hitting its lowest level since 2022. Meanwhile, fresh trade data showed the deficit has jumped 94% since October and about 4% year over year, adding to unease.
Even so, economists caution against reading too much into a single day’s price action.
“Today’s news notwithstanding, the fundamentals of the U.S. economy, namely inflation, the labor market, growth, and productivity, are in a much more stable place than they were just a few months ago,” says Jake Krimmel, senior economist at Realtor.com®.
While current trends are far from perfect, he says, they’re headed in the right direction. “That backdrop is important to keep in mind when there’s a volatile day on Wall Street or in a few financial market segments.”
Housing outlook isn’t gold—it’s jobs and rates
For all the drama in gold and crypto, housing is watching a narrower set of signals: whether borrowing costs stay contained, and whether job security holds up.
On Thursday, mortgage rates ticked up to 6.1% after the Fed’s decision to hold rates steady, but one wild trading session usually isn’t enough to reset the outlook unless it meaningfully moves the Treasury market.
“With mortgage rates hanging out in the low 6s for the past few weeks, a stable Fed outlook, and well-anchored inflation expectations, I would not expect big movements in mortgage rates as a result of anything that happened in markets today,” Krimmel says.
The bigger question is the labor market. Headlines this week pointed to fresh stress, including Amazon job cuts following a weak monthly jobs report in early January. Still, Krimmel cautions against overreacting.
“On the jobs picture, it’s not strong but, importantly, it does not look as fragile as some feared a few months back,” he says. “If we can’t have strength, we’ll take stability.”
But if that stability cracks—through higher unemployment or weaker job creation—Krimmel can see a future where housing demand takes a hit. In some markets, that dynamic is already visible on a small scale as higher-income sectors shed jobs in concentrated hubs.
“The jobs being lost in sectors like technology and professional services typically pay above what’s required to qualify for a mortgage at today’s median home prices in many markets,” John Macke of John Burns Research & Consulting explained to Realtor.com in November. “These job losses directly shrink the pool of qualified buyers and limit homebuying activity.”
Macke’s research points to Austin, TX, and Denver as among the most exposed markets.
The K-shaped economy is getting sharper
For all his optimism about the economy’s underlying footing, Krimmel cautions that the broader macro picture still carries real downside risk.
One of the clearest fault lines is what economists call the K-shaped economy—where higher-income households continue to spend and build wealth, while everyone else faces a tighter squeeze.
“The K-shaped economy is becoming steadily more K-shaped,” Moody’s chief economist, Mark Zandi, wrote in a Jan. 18 post on X.
That means growth is increasingly being driven by households at the top, while many middle- and lower-income consumers feel the squeeze of elevated prices, higher borrowing costs, and slower wage gains.
That imbalance can make the economy look healthier on paper than it feels on the ground, because it concentrates momentum in a relatively small group whose spending can change quickly when markets wobble.
“An increasingly K-shaped economy can’t be good,” Zandi wrote in a follow-up post. “It means the economy is highly dependent on a small group of the well-to-do, who, in turn, spend based in significant part on how their stock portfolios are performing. The increasing angst of Americans, evident in consumer sentiment surveys, our mounting societal ills, and our fractured politics, is likely at least in part due to the K-shape.”
Once again, this split has already shown up in housing. The nation’s top 10 luxury markets logged more than 1,600 sales of $10 million or more in 2025, up roughly 32% from the prior year, with dollar volume rising nearly 24% to $28.6 billion, according to a recent analysis.
The result is a housing landscape where demand can stay buoyant at the top even as affordability pressures intensify for everyone else.
Fear of an AI-bear market returns
After a year in which AI-driven stocks helped power market gains (and concentrated a bigger share of those gains among higher-income households) investors are increasingly asking whether the trade has become a point of fragility.
If a sell-off in high-flying AI names dents confidence at the top of the income ladder, the fear is that it ripples outward.
“The K-shaped economy is concerning if something knocks top consumers off their spending patterns. AI remains a wild card, but certainly seems to be boosting productivity right now,” says Krimmel.
Productivity grew 1.9% from a year ago, its fastest pace in two years. That adds fuel to the argument that AI-driven gains may finally be showing up in the real economy, not just in stock charts. That’s the bull case. The bear case is that volatility doesn’t have to start in AI to hit households, because the fastest transmission route runs through borrowing costs.
“There’s always the potential for geopolitical risk to ripple through the bond and U.S. Treasury markets, which could raise mortgage rates overnight even independent of Fed policy,” he adds.
That risk has been front and center in recent weeks. Treasury yields edged up last week taking mortgage rates with them, amid a bond sell-off tied partly to renewed U.S.–EU tensions over Greenland.
For now, the takeaway is simple. Markets can whipsaw on any given day, but housing won’t truly turn until the bond market forces rates meaningfully higher, or the job market stops delivering the stability buyers are counting on.