The S&P 500's recent rally is facing headwinds as investors contend with slowing tech profits and geopolitical tensions, particularly the investigation into Nvidia by China over potential anti-monopoly violations. This has led to a narrowing of the rally, with the market's focus on a few large-cap tech stocks, which could result in increased volatility if these giants falter. Despite these challenges, the Magnificent Seven continue to attract investor interest due to their strong cash generation and earnings, even as profit growth expectations temper. The broader market, including indices like the Russell 2000, has lagged, suggesting potential for sector rotation as investors seek alternatives.
The ProShares Short S&P500 ETF (SH) has seen a modest increase, rising 0.43% to $41.69 as of 14:20 on Monday, December 9.