The announcement of new tariffs set to take effect on February 1 has created a risk-off environment in the US equity markets, with investors showing increased caution. The S&P 500 has experienced a decline in breadth, with most sectors, particularly energy, facing downward pressure due to concerns over rising costs and potential earnings declines. This has led to a shift in investor preference, with growth stocks outperforming value stocks, as they are perceived to have better long-term prospects despite short-term volatility. Additionally, small-cap stocks are underperforming their large-cap counterparts, as they are more vulnerable to the cost pressures from tariffs.
The iShares Core S&P 500 ETF (IVV) closed at $604.64, down 0.54% from its previous close of $607.94, as of 16:20 on Friday, January 31.