The S&P 500 is witnessing a shift as smaller stocks gain momentum, indicating a broader market rally beyond the influence of its largest constituents. This trend is highlighted by the equal-weighted S&P 500's rise, suggesting increased investor interest in a wider array of stocks. The movement towards smaller-cap stocks may be driven by valuation concerns or strategic reallocation, as investors brace for anticipated market volatility. Despite the flat performance of the S&P 500, the gains in smaller stocks are balancing out the declines in larger index constituents, reflecting a potential mean reversion.
The Direxion Daily S&P 500 Bull 3X Shares (SPXL) experienced a slight decline, dropping 0.07% to $173.03 at 15:40 on Thursday, January 16.