Federal Reserve Chair Jerome Powell's recent comments on trade risks and economic projections have cast a shadow over investor sentiment, despite the Fed's anticipated rate cut. The market's cautious reaction reflects concerns about potential policy changes, including tariffs, which could introduce volatility and affect international competitiveness. Small-cap stocks, particularly sensitive to interest rates, have been notably impacted, experiencing a significant drop. The recent rally led by major tech stocks is also seeing a natural pullback, contributing to the broader market's decline.
The Direxion Daily S&P 500 Bull 3X Shares (SPXL) experienced a sharp decline, falling 7.24% to $171.75 by 4:00 PM on Wednesday, December 18.