The S&P 500 is facing a challenging trading session as bearish sentiment takes hold, driven by increased put buying and a notable decline in Nvidia's stock, which has dropped significantly. This has added psychological pressure on the broader index, contributing to the selling pressure. Systematic strategies and ETFs are also playing a role in the downward momentum, as investors brace for potential further declines. Despite these headwinds, the market is showing some resilience, with the 6,000 level acting as a critical support due to substantial open interest and neutral gamma effects that help stabilize prices.
The ProShares Short S&P500 ETF (SH) has responded to these market dynamics, rising 1.97% to $41.83 as of 1:00 PM on Monday, January 27.