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 by investors, preparing for anticipated market volatility. Despite the flat performance of the SPX, the gains in smaller stocks are balancing the declines in larger index constituents, reflecting a potential mean reversion.
The ProShares UltraPro S&P 500 (UPRO) ETF experienced a slight decline, dropping 0.14% to $90.94 as of 15:40 on Thursday, January 16.