The Direxion Daily S&P 500 Bear 3X ETF (SPXS) saw a decline to $5.94, down 0.83% as of 10:14 AM ET on November 26th. The S&P 500 is experiencing volatility as markets react to President-elect Donald Trump's announcement of a 25% tariff on imports from Canada and Mexico, and an additional 10% on Chinese goods, set to begin on January 20. This announcement has unsettled global markets, with Europe's Stoxx 600 snapping a three-day rally and U.S. index futures showing minor losses after initially dropping. The potential for a trade war has raised concerns about economic growth, impacting investor sentiment.
Additionally, the Federal Reserve's potential shift towards a reflationary stance is adding to market uncertainty. The recent increase in M2 money supply growth, coupled with fading disinflationary pressures, suggests a possible shift towards higher inflation in 2025. This has implications for interest rates and could further influence equity market dynamics. The combination of these factors is contributing to a cautious outlook for the S&P 500, as investors weigh the risks of higher tariffs and changing monetary policy.