Citi's recent downgrade of its equity outlook for the S&P 500, from +2 to +1, has not deterred bullish sentiment in the market. Despite concerns over rising tariff uncertainties and potential inflationary pressures, the U.S. economy is still expected to outperform. The anticipation of a choppier 2025, as highlighted by Citi analysts, has not significantly dampened investor enthusiasm, particularly in sectors like tech and banks, which are expected to benefit from potential deregulation. The Federal Reserve's potential delay in rate cuts until May to manage inflation risks adds another layer of complexity to the market dynamics.
The Direxion Daily S&P 500 Bull 3X Shares (SPXL) has responded positively, rising 2.19% to $176.08 as of 10:00 AM on Friday, January 17.