Technology Sell-Off Drags Markets Lower as Energy Rallies

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Macro Overview

U.S. equities retreated to close the week, driven by a sharp downturn in technology stocks that sent the S&P 500 (IVV) down 1.02%. International markets followed suit, with Developed ex-U.S. equities (EFA) falling 0.46% and Emerging Markets (EEM) declining a more substantial 1.40%. In contrast, commodities were the clear outlier, as the Broad Commodities index (DJP) surged 1.66% on the back of rising oil prices, while fixed income (AGG) posted a modest gain.

U.S. Size & Style

A distinct rotation out of growth was evident across the U.S. style box, with Large Growth (IVW) leading the decline at -1.47%. Its value counterpart, Large Value (IVE), demonstrated relative strength by falling only 0.52%. This trend of value outperforming growth was consistent across mid and small-cap segments, signaling a broad-based shift in investor preference away from higher-duration assets.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Large Value (IVE) -0.52% 2.37% 5.06% 9.83% 18.94%
Large Cap (IVV) -1.02% 0.55% 4.95% 9.60% 19.76%
Large Growth (IVW) -1.47% -1.05% 4.72% 9.12% 20.01%
Mid Value (IJJ) -0.75% 3.15% 5.11% 13.37% 18.93%
Mid Cap (IJH) -0.59% 0.75% 3.88% 15.00% 20.52%
Mid Growth (IJK) -0.64% -1.57% 2.48% 16.27% 21.77%
Small Value (IJS) -0.85% 4.37% 7.87% 21.11% 34.77%
Small Cap (IJR) -0.77% 3.80% 8.18% 22.06% 31.06%
Small Growth (IJT) -0.69% 3.20% 8.33% 22.84% 27.49%

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U.S. Sectors & Industries

Sector performance was highly divergent, with Energy (XLE) standing as the sole gainer, up 1.16% due to rising crude oil prices amid geopolitical tensions. At the other end of the spectrum, technology-related sectors bore the brunt of the sell-off, as Communication Services (XLC) and Technology (XLK) fell 1.78% and 1.09%, respectively. More defensive areas like Health Care (XLV) outperformed the broader market with a smaller decline of 0.44%, reflecting a rotation into less cyclical industries.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
S&P 500 (SPY) -0.99% 0.57% 4.93% 9.58% 19.66%
Energy (XLE) 1.16% 6.26% 5.58% 30.77% 37.23%
Real Estate (XLRE) -0.09% 4.19% 3.00% 14.30% 12.59%
Industrials (XLI) -0.41% 0.14% 3.65% 16.26% 19.70%
Health Care (XLV) -0.44% 7.35% 8.73% 4.95% 23.49%
Utilities (XLU) -0.66% 2.24% -1.52% 7.22% 12.71%
Materials (XLB) -0.71% -2.50% -2.24% 12.33% 14.31%
Consumer Staples (XLP) -0.72% 2.52% 4.03% 11.05% 7.96%
Financials (XLF) -0.86% 4.45% 7.68% 3.60% 8.79%
Technology (XLK) -1.09% -5.38% 13.90% 22.26% 35.22%
Consumer Discretionary (XLY) -1.62% 0.16% -3.93% -2.94% 5.65%
Communication Services (XLC) -1.78% 1.60% -6.85% -5.46% 5.03%

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Global Thematic

Thematic ETFs mirrored the broader market’s risk-off sentiment toward technology, with robotics and AI-focused funds leading the day’s laggards. The Global X Robotics & Artificial Intelligence ETF (BOTZ) declined 3.18%, while other funds in the space saw similar or larger losses. Conversely, pockets of strength emerged in biotechnology and cannabis, where the ALPS Medical Breakthroughs ETF (SBIO) rallied 2.77% and the AdvisorShares Pure US Cannabis ETF (MSOS) gained 2.29%.

Name (Ticker) 1-Day
Leaders
ALPS Medical Breakthroughs ETF (SBIO) 2.77%
AdvisorShares Pure US Cannabis ETF (MSOS) 2.29%
Virtus Biotech Clinical Trials ETF (BBC) 2.12%
Amplify Seymour Cannabis ETF (CNBS) 1.83%
F/M Emerald Life Sciences Innovation ETF (LFSC) 1.77%
Laggards
Themes Humanoid Robotics ETF (BOTT) -5.53%
Roundhill Humanoid Robotics ETF (HUMN) -3.28%
Global X Robotics & Artificial Intelligence ETF (BOTZ) -3.18%
Innovator Deepwater Frontier Tech ETF (LOUP) -3.11%
iShares U.S. Home Construction ETF (ITB) -2.85%

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Developed ex-U.S. & Emerging Markets

International equities broadly declined, though performance varied by region. In developed markets, Japan (EWJ) was a notable laggard, falling 1.54%, while European markets posted more modest losses. Emerging markets underperformed, with the broad index (EEM) down 1.40%, heavily influenced by sharp drops in technology-centric markets like Taiwan (EWT) and China (MCHI), which shed 2.83% and 2.20%, respectively. A standout performer was Indonesia (EIDO), which climbed 2.05% against the negative trend.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Developed Markets ex-U.S.
Developed ex-U.S. (EFA) -0.46% -0.43% 0.61% 9.29% 20.60%
Australia (EWA) 0.42% 0.35% -3.49% 11.33% 12.85%
Canada (EWC) 0.10% 2.17% 2.06% 10.75% 29.02%
France (EWQ) -0.09% -0.46% -1.17% 2.72% 8.07%
Germany (EWG) -0.19% -0.48% -2.81% -1.23% -0.88%
Hong Kong (EWH) -0.05% 3.28% -4.59% 5.38% 14.11%
Japan (EWJ) -1.54% -4.19% 0.87% 12.67% 30.43%
Netherlands (EWN) -1.30% -4.28% 5.30% 18.39% 31.01%
South Korea (EWY) -0.50% -20.74% 6.70% 67.19% 127.54%
Switzerland (EWL) 0.30% 2.75% 2.97% 7.23% 18.28%
U.K. (EWU) -0.06% 2.22% -1.31% 8.27% 21.87%
Emerging Markets
Emerging Markets (EEM) -1.40% -7.69% -0.05% 16.26% 31.17%
Brazil (EWZ) -0.28% 3.28% -13.59% 11.95% 33.06%
China (MCHI) -2.20% -0.09% -10.11% -11.27% -5.21%
India (INDA) 0.45% -0.31% -4.62% -9.51% -11.09%
Indonesia (EIDO) 2.05% -0.48% -23.56% -32.39% -28.12%
Malaysia (EWM) 0.64% 2.06% -1.37% 5.12% 22.09%
Mexico (EWW) -0.15% -2.85% -4.09% 9.92% 29.94%
South Africa (EZA) -0.92% -6.24% -14.66% -7.44% 25.41%
Taiwan (EWT) -2.83% -7.40% 16.95% 53.20% 71.17%
Thailand (THD) -0.08% 1.66% 3.64% 24.98% 35.93%

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Fixed Income

The fixed income market saw modest demand as investors sought safety from the equity sell-off. The U.S. Aggregate Bond index (AGG) ticked higher by 0.07%, with longer-duration government bonds showing slightly more strength. In contrast, credit-sensitive areas displayed some weakness, as High Yield corporate bonds (HYG) edged down 0.19%, indicating a preference for quality within the asset class.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Multisector
Long-Term (BLV) 0.22% -1.43% -1.54% -0.53% 4.70%
Core (AGG) 0.07% -0.08% -0.66% 0.29% 4.32%
Core Enhanced (IUSB) 0.04% -0.08% -0.56% 0.46% 4.53%
Short-Term (BSV) -0.01% 0.38% -0.12% 0.56% 3.33%
Government
Long-Term (SPTL) 0.31% -1.34% -1.66% -0.77% 4.33%
Inflation Protected (TIP) 0.28% 0.27% -0.29% 1.13% 3.20%
Intermediate (SPTI) 0.11% 0.36% -0.82% -0.16% 3.18%
Short-Term (SPTS) 0.03% 0.44% 0.15% 0.82% 3.28%
Ultrashort (BIL) 0.02% 0.31% 0.89% 1.94% 3.83%
Specialty
Bank Loans (BKLN) 0.05% 0.55% 0.58% 0.56% 3.93%
Mortgage Backed (MBB) 0.02% -0.08% -0.80% 0.58% 5.59%
Corporate (SPIB) 0.00% 0.23% -0.25% 0.60% 4.23%
Convertible (CWB) -0.05% -7.27% 1.33% 14.58% 21.59%
Preferred Stock (PFF) -0.07% -1.93% -2.22% 0.49% 2.58%
High Yield (HYG) -0.19% 0.36% 0.25% 1.75% 5.38%
International & EM
International USD (BNDX) -0.06% -0.56% -0.13% 0.56% 1.82%
Emerging USD (EMB) -0.06% -0.37% 0.08% 1.83% 9.64%
International Local (IGOV) -0.20% -1.35% -3.23% -2.14% -1.67%
Emerging Local (EMLC) -0.35% -0.34% -1.18% 1.34% 7.49%
Municipals
Short-Term (SUB) -0.01% 0.01% 0.18% 0.82% 2.37%
High Yield (HYD) -0.02% 0.00% 0.82% 2.06% 8.95%
Intermediate (MUB) -0.04% -0.11% 0.06% 1.10% 6.56%
Long-Term (MLN) -0.06% 0.39% 0.48% 2.40% 10.56%

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Commodities

Commodities delivered a strong performance, driven primarily by a rally in the energy sector amid heightened geopolitical risk in the Middle East. Brent Crude (BNO) surged 4.10% while WTI Crude (USO) gained 3.91%, pushing the broad energy index (DBE) up 3.03%. Precious metals also found a bid, with Gold (GLD) advancing 0.95% as investors sought safe-haven assets.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Broad Commodities (DJP) 1.66% 4.14% 0.79% 25.13% 34.39%
Agriculture
Sugar (CANE) 2.20% 2.53% 7.39% -0.15% -12.57%
Wheat (WEAT) 1.32% 8.84% 12.37% 26.44% 14.25%
Broad (DBA) 0.91% 3.73% 3.42% 9.09% 11.86%
Corn (CORN) 0.91% 3.67% -0.95% 0.28% 1.31%
Soybeans (SOYB) 0.59% 4.30% 3.96% 16.61% 16.71%
Energy
Brent Crude (BNO) 4.10% 11.98% 7.10% 71.96% 59.57%
WTI Crude (USO) 3.91% 8.52% 6.83% 79.24% 62.76%
Broad (DBE) 3.03% 10.58% 10.83% 73.49% 60.28%
Natural Gas (UNG) 0.86% -9.16% -3.04% -14.27% -33.06%
Industrial Metals
Broad (DBB) -0.20% -2.77% -1.72% 6.93% 30.97%
Copper (CPER) -0.37% -1.86% 1.69% 8.47% 11.04%
Precious Metals
Gold (GLD) 0.95% -5.20% -17.38% -7.04% 19.77%
Silver (SLV) 0.77% -16.22% -31.03% -21.17% 46.55%
Broad (DBP) 0.63% -7.69% -20.70% -10.93% 22.45%
Palladium (PALL) -0.83% -4.26% -20.38% -21.93% -3.19%
Platinum (PPLT) -1.29% -7.47% -24.66% -22.22% 9.07%

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Cryptocurrency

Digital assets remained relatively stable amidst the volatility in traditional equity markets, posting only minor losses. Bitcoin (IBIT) registered a slight decline of 0.11%, while Ethereum (ETHA) pulled back 1.56%. The muted price action suggests the cryptocurrency space was largely disconnected from the specific technology-driven sell-off that impacted the Nasdaq and S&P 500.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Ethereum (ETHA) -1.56% 6.43% -24.32% -37.98% -46.25%
Solana (SOLZ) -0.66% 5.05% -16.14% -40.14% -60.19%
XRP (XRP) -0.49% -7.65% -26.81% -40.55%
Multi-Coin (NCIQ) -0.25% 0.06% -18.73% -29.79% -48.66%
Bitcoin (IBIT) -0.11% -0.03% -17.27% -26.79% -46.27%

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What to Watch Today

Looking ahead to Monday, market participants will be watching several key events. The economic calendar includes the release of the US Leading Index for June at 9:00 AM ET. Additionally, the Federal Reserve Board of Governors has a closed meeting scheduled in the afternoon to discuss advance and discount rates. On the earnings front, reports are expected from companies including AMC Entertainment, Domino’s Pizza, and Steel Dynamics, while the Treasury will conduct its regular 3-month and 6-month bill auctions.

This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.

This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.