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 strategists to recommend the equal-weighted index as a more stable investment option during periods of tech-driven market fluctuations. This strategic shift aligns with long-term "America First" policies and offers a relatively low valuation compared to historical averages.
The Vanguard S&P 500 ETF (VOO) experienced a decline, dropping 1.61% to $550.02 at 11:00 AM on Monday, January 27.