The recent rebound in the US stock market has uplifted investors; however, a senior trader at Goldman Sachs, John Flood, warns of three significant concerns lurking beneath the surface. Although the S&P 500 index has shown recovery, the actual number of stocks participating in this rebound is quite limited, primarily relying on a few tech giants like Apple, Microsoft, and Amazon. This creates vulnerability, as a decline in tech stock performance could lead to a rapid market drop.

Secondly, despite substantial capital inflow into the market, liquidity issues persist, especially for retail investors. If sudden market volatility occurs, insufficient capital flow could lead to dramatic price swings, putting investors in a tough spot.

Lastly, the trading volume of ETFs is rising sharply, with leveraged ETFs drawing particular attention. This overexpansion of ETFs may exacerbate market volatility during significant sell-offs, elevating the risk of a market crash. Therefore, investors need to remain vigilant regarding these potential risks.