Citi's recent downgrade of its equity outlook for the S&P 500 reflects growing concerns over rising tariff uncertainties and potential inflationary pressures as the U.S. approaches a new presidential inauguration. The bank's Global Asset Allocation report suggests that while the U.S. economy is poised to outperform, the risk/reward profile for equities is less favorable compared to 2024. Analysts anticipate a choppier market in 2025, with broad tariffs potentially impacting global growth and inflation. Despite these challenges, Citi remains optimistic about U.S. small caps and sectors like tech and banks, which could benefit from potential deregulation.
The ProShares Short S&P500 ETF (SH) experienced a slight decline, falling 0.69% to $41.78 at 10:00 AM on Friday, January 17.