Technology Sector Surges on Strong Earnings, Defying Broader Market

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Macro Overview

U.S. equities posted a mixed performance, with the S&P 500 (IVV) gaining 0.66% on the back of a powerful technology rally that offset weakness elsewhere. International markets were varied, as Developed ex-U.S. (EFA) slipped 0.23% while Emerging Markets (EEM) rose 0.66%. The equity advance came despite hawkish commentary from Federal Reserve officials and rising Treasury yields, which kept the U.S. Aggregate Bond (AGG) nearly flat. Meanwhile, Broad Commodities (DJP) had a strong session, climbing 1.02% led by gains in energy.

U.S. Size & Style

A significant performance gap emerged between growth and value styles, particularly within large-cap stocks. Large Growth (IVW) jumped 1.59%, driven by the technology sector’s outperformance. In stark contrast, Large Value (IVE) declined by 0.34% on the day. This divergence was less pronounced in smaller market segments, with mid and small-cap indexes finishing the day nearly unchanged, indicating the rally’s narrow leadership.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Large Value (IVE) -0.34% 2.01% 4.38% 12.63% 18.33%
Large Cap (IVV) 0.66% 4.34% 3.00% 13.71% 20.65%
Large Growth (IVW) 1.59% 6.42% 1.90% 14.45% 22.31%
Mid Value (IJJ) -0.22% -0.27% 4.49% 13.34% 15.02%
Mid Cap (IJH) 0.04% 0.86% 3.34% 16.69% 18.68%
Mid Growth (IJK) 0.22% 1.78% 2.14% 19.62% 21.96%
Small Value (IJS) 0.08% 1.35% 5.42% 22.09% 27.36%
Small Cap (IJR) 0.01% 0.87% 5.45% 22.69% 25.21%
Small Growth (IJT) -0.12% 0.32% 5.46% 23.04% 23.00%

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U.S. Sectors & Industries

The Technology (XLK) sector was the day’s standout story, surging 3.16% as the only one of eleven sectors to finish in positive territory. This impressive gain was fueled by better-than-expected earnings and strong forward guidance from AI-centric companies including Nvidia and Salesforce. All other sectors retreated, with defensive areas posting some of the largest losses; Consumer Staples (XLP) fell 1.38% and Health Care (XLV) dropped 1.13%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
S&P 500 (SPY) 0.66% 4.33% 3.01% 13.68% 20.57%
Technology (XLK) 3.16% 8.21% 2.39% 31.32% 43.38%
Energy (XLE) -0.22% 6.73% 10.08% 41.22% 43.95%
Financials (XLF) -0.65% 1.76% 12.96% 6.59% 9.28%
Utilities (XLU) -0.76% -5.47% -3.73% 2.50% 4.07%
Materials (XLB) -0.82% 3.58% 4.39% 18.33% 17.62%
Industrials (XLI) -0.85% -2.40% 2.83% 15.87% 18.24%
Real Estate (XLRE) -0.95% -2.40% 0.93% 12.38% 9.48%
Communication Services (XLC) -1.07% 3.48% -3.92% -4.81% 1.46%
Consumer Discretionary (XLY) -1.09% 4.55% -4.47% -2.57% -0.08%
Health Care (XLV) -1.13% 5.01% 15.82% 11.78% 27.45%
Consumer Staples (XLP) -1.38% -0.33% 1.29% 10.91% 8.27%

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Global Thematic

Cybersecurity funds dominated the thematic leaderboard, capitalizing on the strength in the technology sector and positive corporate results from firms like CrowdStrike. The WisdomTree Cybersecurity Fund (WCBR) and the Global X Cybersecurity ETF (BUG) both posted gains exceeding 10%. Conversely, themes sensitive to higher interest rates and economic outlooks struggled, with the Invesco Leisure and Entertainment ETF (PEJ) and iShares U.S. Home Construction ETF (ITB) among the notable laggards.

Name (Ticker) 1-Day
Leaders
WisdomTree Cybersecurity Fund (WCBR) 10.45%
Global X Cybersecurity ETF (BUG) 10.41%
Amplify Cybersecurity ETF (HACK) 8.18%
First Trust NASDAQ Cybersecurity ETF (CIBR) 7.61%
iShares Cybersecurity & Tech ETF (IHAK) 7.56%
Laggards
Invesco Leisure and Entertainment ETF (PEJ) -1.85%
iShares U.S. Home Construction ETF (ITB) -1.73%
AdvisorShares Psychedelics ETF (PSIL) -1.71%
State Street SPDR S&P Homebuilders ETF (XHB) -1.40%
Amplify Seymour Cannabis ETF (CNBS) -1.28%

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Developed ex-U.S. & Emerging Markets

International equity performance was split between developed and emerging regions. Developed ex-U.S. markets (EFA) edged lower by 0.23%, weighed down by a 1.54% drop in France (EWQ). In contrast, Emerging Markets (EEM) gained 0.66%, propelled by strong performance in technology-heavy Asian markets. Taiwan (EWT) and South Korea (EWY) were notable outperformers, rising 2.11% and 1.65%, respectively.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Developed Markets ex-U.S.
Developed ex-U.S. (EFA) -0.23% 3.96% 4.72% 14.25% 21.85%
Australia (EWA) -0.13% 4.26% 5.55% 16.59% 15.04%
Canada (EWC) 0.05% 4.83% 7.37% 15.99% 30.48%
France (EWQ) -1.54% 1.83% 2.67% 4.97% 11.53%
Germany (EWG) 0.59% 6.70% 4.07% 6.98% 8.54%
Hong Kong (EWH) 0.09% 0.79% 0.99% 9.78% 13.55%
Japan (EWJ) 0.43% 4.73% 4.40% 19.33% 27.18%
Netherlands (EWN) -0.13% 4.65% 4.12% 22.03% 34.84%
South Korea (EWY) 1.65% 12.99% -8.14% 87.35% 157.05%
Switzerland (EWL) -0.75% 2.03% 2.80% 8.13% 17.37%
U.K. (EWU) -0.47% 2.66% 4.45% 12.17% 20.71%
Emerging Markets
Emerging Markets (EEM) 0.66% 6.27% -0.64% 24.20% 38.11%
Brazil (EWZ) 0.11% -0.31% -0.02% 13.63% 28.87%
China (MCHI) -0.36% 1.18% -0.36% -8.01% -6.80%
India (INDA) -0.44% 1.31% 2.02% -8.36% -5.98%
Indonesia (EIDO) 1.12% 4.12% -0.49% -31.19% -28.46%
Malaysia (EWM) -0.59% 3.41% 1.22% 7.54% 19.33%
Mexico (EWW) -0.50% 0.81% -1.60% 12.92% 28.85%
South Africa (EZA) -0.17% 15.53% 6.04% 6.21% 34.35%
Taiwan (EWT) 2.11% 11.06% 5.50% 70.99% 90.12%
Thailand (THD) -0.03% 2.50% 2.82% 26.46% 32.21%

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Fixed Income

The fixed income market was subdued as Treasury yields climbed following resilient U.S. jobless claims data and hawkish remarks from Fed officials. The U.S. Aggregate Bond (AGG) registered a small loss of 0.03%, reflecting the pressure from higher rates. Longer-duration bond funds saw slightly larger declines, while credit-sensitive categories like High Yield (HYG) also finished marginally lower. The market action reflected increased expectations for a Federal Reserve rate hike by year-end.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Multisector
Core (AGG) -0.03% 0.49% 0.03% 0.25% 2.33%
Short-Term (BSV) -0.05% 0.55% 0.57% 0.87% 2.39%
Core Enhanced (IUSB) -0.09% 0.50% 0.14% 0.46% 2.63%
Long-Term (BLV) -0.12% 0.25% -1.34% -1.43% 1.12%
Government
Ultrashort (BIL) 0.00% 0.31% 0.90% 2.33% 3.73%
Short-Term (SPTS) -0.03% 0.49% 0.71% 1.14% 2.70%
Intermediate (SPTI) -0.04% 0.44% 0.20% -0.22% 1.26%
Inflation Protected (TIP) -0.07% 0.78% -0.29% 1.10% 1.40%
Long-Term (SPTL) -0.16% -0.10% -1.03% -1.79% 0.82%
Specialty
Convertible (CWB) 0.28% 2.87% -2.26% 17.70% 22.86%
Bank Loans (BKLN) 0.00% 1.24% 1.74% 1.90% 4.70%
Corporate (SPIB) -0.03% 0.60% 0.29% 0.75% 2.73%
High Yield (HYG) -0.04% 1.25% 1.14% 2.53% 4.57%
Mortgage Backed (MBB) -0.06% 0.53% 0.16% 0.68% 3.56%
Preferred Stock (PFF) -0.16% 1.66% -1.05% 1.92% 2.16%
International & EM
International USD (BNDX) -0.17% -0.21% -0.37% 0.33% 1.23%
International Local (IGOV) -0.17% 2.15% -0.63% -0.58% -0.41%
Emerging USD (EMB) -0.19% 0.62% 0.39% 1.85% 6.82%
Emerging Local (EMLC) -0.23% 2.42% 2.83% 3.50% 8.47%
Municipals
Short-Term (SUB) -0.02% 0.44% 0.59% 1.18% 1.95%
Intermediate (MUB) -0.06% -0.12% -0.61% 0.25% 4.19%
Long-Term (MLN) -0.09% -0.31% -0.06% 1.09% 7.04%
High Yield (HYD) -0.13% -0.05% -0.84% 0.73% 6.05%

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Commodities

Commodities posted broad gains, with the Broad Commodities (DJP) index rising 1.02%. The energy complex was a primary driver, as WTI Crude (USO) and Brent Crude (BNO) gained 2.09% and 2.32% respectively, amid ongoing geopolitical tensions. Precious metals also advanced, with Silver (SLV) climbing 1.92% and Gold (GLD) adding 0.30%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Broad Commodities (DJP) 1.02% 7.74% 5.23% 34.72% 49.21%
Agriculture
Sugar (CANE) 2.14% 19.35% 19.60% 17.58% 4.35%
Wheat (WEAT) 0.85% 11.01% 14.56% 36.30% 29.00%
Broad (DBA) 0.80% 4.34% 4.91% 12.93% 7.85%
Soybeans (SOYB) 0.04% 4.57% 7.38% 22.42% 20.22%
Corn (CORN) -1.15% 10.55% 10.00% 11.68% 15.79%
Energy
Brent Crude (BNO) 2.32% 6.14% 1.11% 82.59% 71.23%
WTI Crude (USO) 2.09% 4.21% -0.78% 87.98% 74.09%
Broad (DBE) 1.71% 6.45% 6.98% 84.61% 77.15%
Natural Gas (UNG) 0.19% 3.17% -6.71% -14.93% -14.44%
Industrial Metals
Broad (DBB) 0.12% 2.86% -0.66% 11.42% 34.70%
Copper (CPER) -0.20% 3.12% 3.90% 14.36% 44.54%
Precious Metals
Palladium (PALL) 2.46% 4.95% -2.42% -15.46% 23.16%
Silver (SLV) 1.92% 18.59% -7.01% -2.56% 79.39%
Platinum (PPLT) 0.90% 13.78% -3.84% -10.10% 36.28%
Broad (DBP) 0.58% 13.62% 0.80% 3.59% 40.16%
Gold (GLD) 0.30% 12.80% 3.45% 6.63% 35.14%

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Cryptocurrency

Digital assets saw widespread gains, with several alternative coins posting significant advances. Solana (SOLZ) was the day’s top performer, surging 13.25%. The largest cryptocurrencies also moved higher, as Bitcoin (IBIT) rose 1.87% and Ethereum (ETHA) added 1.18%. The broad-based rally extended recent positive momentum across the crypto space.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Ethereum (ETHA) 1.18% 28.28% 21.86% -15.87% -45.40%
Multi-Coin (NCIQ) 1.84% 23.68% 8.39% -11.31% -34.91%
Bitcoin (IBIT) 1.87% 23.17% 6.69% -8.78% -28.85%
XRP (XRP) 5.77% 33.69% 9.76% -20.52%
Solana (SOLZ) 13.25% 44.36% 30.77% -12.84% -49.92%

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What to Watch Today

Looking ahead to Friday, market participants will be focused on the keynote address by Federal Reserve Chairman Kevin Warsh at the Jackson Hole Economic Policy Symposium for insights into the monetary policy outlook. Key economic data releases include the August Chicago PMI and the final reading of the University of Michigan Consumer Sentiment survey. Additionally, a few corporate earnings reports are scheduled for release before the market opens.

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.