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 their reliance on global trade. Concerns about potential earnings declines from increased costs have led to a preference for growth stocks over value stocks, as the former are seen as having better long-term prospects despite short-term volatility. Additionally, small-cap stocks are underperforming large-cap stocks, as they are more vulnerable to cost pressures from tariffs due to less diversified revenue streams.
The SPDR Portfolio S&P 500 ETF (SPLG) closed at $70.79, down 0.52% from the previous close of $71.16, and currently stands at $70.78 as of 16:20 on Friday, January 31.