The S&P 500 is currently facing a challenging environment as stronger-than-expected December jobs data have bolstered economic growth prospects, reducing immediate recession fears and supporting corporate earnings. However, this has also raised concerns about potential interest rate hikes, which could impact equities, especially those with high valuations. Despite these concerns, demand for long-duration assets like Treasuries remains strong, potentially stabilizing yields. Political factors, such as potential fiscal policy adjustments by President Trump, could also influence market conditions by capping inflation expectations and allowing equities to recover after initial selloffs. As traders shift their focus from inflation risks to growth prospects, the S&P 500 may find support around key levels.
The SPDR Portfolio S&P 500 ETF (SPLG) experienced a decline, dropping 1.40% to $68.36 at 11:00 AM on Friday, January 10.