The S&P 500 is experiencing a downturn as investors digest stronger-than-expected December jobs data, which has bolstered economic growth prospects and reduced immediate recession fears. This development has led to concerns about potential interest rate hikes, causing equities, particularly those with high valuations, to exhibit increased sensitivity to rate changes. Despite the robust economic data, which could stabilize earnings expectations, the market is grappling with the implications of these potential rate adjustments. Political factors, including potential fiscal policy shifts by President Trump, are also influencing market sentiment, as traders balance inflation risks with growth prospects.
The Invesco S&P 500 Equal Weight ETF (RSP) has declined by 1.07% to $173.93 as of 11:00 AM on Friday, January 10.