The recent pause in the stock market rally can be attributed to geopolitical tensions, particularly the US's review of the 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. These factors have led investors to seek safer assets, resulting in 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 Direxion Daily S&P 500 Bull 2X Shares (SPUU) experienced a decline, dropping 0.65% to $158.07 at 16:20 on Friday, January 24.