The recent pause in the stock market rally can be attributed to geopolitical tensions, particularly the US's review of its Economic and Trade Agreement with China. This development has raised concerns about the stability of trade relations, especially impacting the technology sector, which is highly sensitive to such geopolitical shifts. Additionally, President Donald Trump's mixed signals on economic policies, including potential tax cuts and a softer stance on tariffs, have added to market uncertainty. In response, investors have turned to safer assets, leading to a rally in Treasury bonds and a decline in yields. The dollar has weakened, marking its worst week since November 2023, as lower Treasury yields have made US exports more competitive.
The ProShares Short S&P500 ETF (SH) closed at $41.02, up 0.34% from its previous close of $40.88, as of 16:20 on Friday, January 24.