The S&P 500 is experiencing a selloff, driven by pressures in the technology sector, particularly among semiconductor companies like Nvidia and Broadcom. These stocks are facing challenges due to their dependence on AI-driven demand, which is currently under scrutiny. Additionally, utility stocks such as Vistra and Constellation Energy, which have previously benefited from data center power needs, are also impacted by shifts in the tech sector. The market's current environment is shaped by expectations of fewer Federal Reserve rate cuts, traditionally affecting growth sectors like technology. Despite the downturn, the limited breadth of the decline suggests that investor sentiment remains relatively stable, with no immediate signs of broader macroeconomic contagion.
The ProShares Ultra S&P500 (SSO) ETF saw a significant decline, dropping 3.65% to $95.43 by 12:00 PM on Monday, January 27.