The S&P 500 Faces a Downturn: Insights into Market Trends and ETF Performance

The S&P 500, a major stock market index, is turning red again this week, losing 3.79% from its peak on July 16th and -2.38% starting from July 23rd. This index is a big deal because it shows how well the U.S. stock market is doing.

There are several Exchange-Traded Funds (ETFs) that follow the S&P 500, like the iShares Core S&P 500 ETF (IVV) -3,50% from its peak but still gained +15,43%from the beginning of the year and Vanguard S&P 500 ETF (VOO) -3,49% from its highs but +15,42% starting from the beginning of the year.

The U.S. government's treasuries, like the 10-year note and the 2-year note, have gone up a lot from their lowest points. This affects the stock market and how much investors are willing to pay for stocks. And also shows how investor fear is changing on different maturities.

The Stock market needs that correction now as a lot of larger value names look overvalued and lower investor confidence make them switch to undervalued smaller cap stocks. The downward trend could continue this week, although much will depend on the financial reports of major companies. Many analysts believe that they will meet expectations.