The SPDR Portfolio S&P 500 ETF (SPLG) is experiencing downward pressure due to a confluence of factors impacting the broader market. Over the weekend, President Trump announced significant tariffs of 25% on imports from Mexico and Canada and 10% on China, which are set to take effect soon. This move has sparked fears of a trade war, leading to a sell-off in U.S. stock futures and heightened market volatility. The tariffs are expected to impact corporate earnings, with estimates suggesting an 8% hit to S&P 500 EPS. Additionally, the market is grappling with concerns over a potential slowdown in U.S. government spending and reduced immigration, which could further dampen economic growth.
The technology sector, a significant component of the S&P 500, is also under pressure. The emergence of Chinese AI competition, particularly from DeepSeek's new AI model, has raised questions about the return on investment in AI infrastructure. This, coupled with the tariffs, has led to declines in major tech stocks, including Nvidia, Apple, and Microsoft. The broader market sentiment is further weighed down by a UBS report indicating that stocks at risk from the proposed tariffs have already seen a significant decline.
The SPDR Portfolio S&P 500 ETF (SPLG) is currently priced at $69.58, reflecting a 1.72% decrease from the previous close.