The announcement of new tariffs set to take effect on February 1 has created a risk-off environment in the US equity markets, leading to a broad sell-off across most sectors. The energy sector, in particular, has been hit hard due to its reliance on global trade, while value stocks have underperformed growth stocks amid concerns over potential earnings declines. The market's fear premium has increased, as indicated by a rise in the VIX and implied volatility, reflecting heightened demand for downside protection. Investors are adopting a cautious stance, reducing their exposure to equities ahead of the weekend, amid fears of potential retaliatory actions and geopolitical risks.
The Invesco S&P 500 Equal Weight ETF (RSP) closed at $181.24, down 0.82% from its previous close of $182.74, as of 16:20 on Friday, January 31.