Rising bond yields and tariff concerns are weighing heavily on the S&P 500, impacting the Vanguard S&P 500 ETF (VOO). The yield on the 10-year Treasury note has climbed to 4.68%, driven by stronger-than-expected U.S. services data, which suggests persistent inflation and delays in anticipated Federal Reserve rate cuts. This has led to increased market volatility, with tech stocks, including Palantir and AMD, experiencing significant declines. Additionally, President-elect Donald Trump's potential invocation of the International Economic Emergency Powers Act to impose tariffs has further unsettled investors, raising fears of inflation and global trade disruptions.
The S&P 500 futures have been trending down, reflecting the broader market's reaction to these developments. The MOVE index, which measures expected volatility in the U.S. Treasury bond market, has risen sharply, indicating tighter financial conditions and increased risk aversion. This has contributed to the decline in the S&P 500, as investors brace for potential economic impacts from both domestic and international fronts. The market is also closely watching upcoming economic data, including the ADP Nonfarm Employment Change and the Federal Reserve's meeting minutes, for further insights into inflation risks and policy directions.
The Vanguard S&P 500 ETF (VOO) is currently priced at $540.06, down 0.25% from the previous close.