The recent tech selloff, spurred by concerns over capital spending in AI, has led to a notable rotation into value stocks, which has benefited the equal-weighted S&P 500. This shift has been driven by the index's diversified sector exposure, particularly in industrials, utilities, and financials, allowing it to outperform its market-cap-weighted counterpart. The tech-heavy S&P 500 has faced increased volatility and downside risks, prompting investors to seek more stable investment options amid the current market conditions. SocGen strategists have recommended the equal-weighted S&P 500 as a strategic investment, citing its alignment with long-term "America First" policies and its relatively low valuation compared to historical averages.
The iShares Core S&P 500 ETF (IVV) experienced a decline, dropping 1.62% to $601.00 at 11:00 AM on Monday, January 27.