Economic policy uncertainty is casting a shadow over U.S. stocks, with Goldman Sachs highlighting a nearly 30% risk of a market correction. This heightened risk is driven by concerns over rising interest rates and the potential impact of the December labor market report, which could push the S&P 500 into a correction. The S&P 500 has had a weak start to 2025, with technical indicators showing a deteriorating situation. The market is also grappling with the aftermath of a disappointing Santa Claus rally, which failed to deliver the expected gains, leaving investors uncertain about the year's outlook.
Adding to the market's woes, the Federal Reserve's recent meeting minutes revealed concerns about inflationary pressures, which have fueled bond market volatility and weighed on risk assets. The S&P 500's performance is further complicated by the anticipation of the Non-Farm Payroll numbers, which are expected to provide more clarity on the Federal Reserve's future policy direction. This uncertainty has left investors cautious, as they await key economic data that could influence market sentiment.
The ProShares UltraPro S&P 500 ETF (UPRO) is currently trading at $89.22, down 0.42% from its previous close.