The announcement of new tariffs set to take effect on February 1 has triggered a risk-off sentiment in the US equity markets, leading to a decline in the S&P 500. The energy sector, heavily dependent on global trade, has been particularly affected, contributing to the overall market downturn. Investors are increasingly cautious, concerned about potential earnings declines due to rising costs. This has resulted in value stocks underperforming growth stocks, as the latter are seen as having better long-term prospects despite short-term volatility. Additionally, small-cap stocks are underperforming their large-cap counterparts, as they are more vulnerable to cost pressures from tariffs.
The ProShares Short S&P500 ETF (SH) closed at $41.49, up 0.58% from its previous close of $41.25, as of 16:20 on Friday, January 31.