The recent tech selloff, spurred by concerns over capital spending in AI, has led to a rotation into value stocks, benefiting the equal-weighted S&P 500. This shift has been driven by the index's diversified sector exposure, particularly in industrials, utilities, and financials, which has allowed it to outperform its market-cap-weighted counterpart. As a result, the equal-weighted index has gained favor among strategists, who recommend it as a strategic investment due to its alignment with long-term policies and relatively low valuation. This rotation has put pressure on tech-heavy indices, contributing to the decline in the S&P 500.
The Direxion Daily S&P 500 Bull 2X Shares (SPUU) experienced a significant drop, falling 3.23% to $153.31 by 11:00 AM on Monday, January 27.