Inflation Fears Sink U.S. Stocks as Commodities and Crypto Surge

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Macro Overview

U.S. equities experienced their most significant decline in three weeks as resurgent inflation concerns, fueled by rising oil prices, pushed Treasury yields higher. The S&P 500 (IVV) fell 0.83%, and the U.S. Aggregate Bond market (AGG) declined 0.34%. In contrast, Broad Commodities (DJP) gained 0.84%, while Emerging Markets (EEM) proved to be a notable outlier, advancing 0.77% against the broader risk-off sentiment. Developed ex-U.S. markets (EFA) also ended the day in negative territory, down 0.29%.

U.S. Size & Style

The equity downturn was broad-based across all U.S. size and style segments, with small-caps bearing the brunt of the sell-off. Small-Cap Growth (IJT) was the weakest performer, dropping 1.30%, followed closely by the broader Small Cap index (IJR) with a 1.05% loss. Large-cap stocks also retreated, though growth-oriented names (IVW) at -0.69% held up slightly better than their value counterparts (IVE), which fell 0.99%. No segment registered an oversold or overbought RSI reading, indicating a widespread but not extreme move lower.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Large Value (IVE) -0.99% 2.77% 5.00% 12.18% 19.03%
Large Cap (IVV) -0.83% 2.81% 3.16% 12.48% 20.93%
Large Growth (IVW) -0.69% 2.73% 1.59% 12.46% 22.28%
Mid Value (IJJ) -0.62% 0.97% 6.34% 13.25% 18.67%
Mid Cap (IJH) -0.87% 1.92% 5.18% 16.27% 21.75%
Mid Growth (IJK) -1.03% 2.81% 4.12% 18.98% 24.48%
Small Value (IJS) -0.84% 1.13% 8.14% 21.62% 32.33%
Small Cap (IJR) -1.05% 0.88% 8.06% 22.35% 29.84%
Small Growth (IJT) -1.30% 0.62% 7.94% 22.82% 27.22%

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U.S. Sectors & Industries

Sector performance diverged significantly, driven by macroeconomic crosscurrents. The Energy sector (XLE) was the top performer, gaining 0.27% as crude oil prices climbed amid geopolitical tensions; the sector now shows an overbought RSI of 73. On the other end of the spectrum, consumer-focused sectors lagged, with Consumer Discretionary (XLY) falling 1.61% and Consumer Staples (XLP) declining 1.41%, pressured by a negative market reaction to key retail earnings. Health Care (XLV) was the day’s biggest laggard, shedding 1.87%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
S&P 500 (SPY) -0.84% 2.76% 3.14% 12.43% 20.83%
Energy (XLE) 0.27% 10.03% 7.36% 44.53% 53.21%
Real Estate (XLRE) 0.20% -0.33% 2.34% 13.44% 11.46%
Materials (XLB) -0.19% 4.78% 5.83% 16.53% 18.44%
Technology (XLK) -0.29% 4.21% 3.49% 27.49% 41.66%
Communication Services (XLC) -0.57% -0.11% -4.42% -5.43% 2.03%
Utilities (XLU) -0.57% -2.60% -1.04% 3.90% 4.40%
Financials (XLF) -0.92% 1.62% 10.62% 4.88% 9.38%
Industrials (XLI) -1.20% 0.93% 5.55% 16.50% 20.40%
Consumer Staples (XLP) -1.41% 0.54% 0.46% 11.22% 5.38%
Consumer Discretionary (XLY) -1.61% 1.81% -0.87% -1.90% 3.33%
Health Care (XLV) -1.87% 8.25% 17.68% 12.31% 27.56%

Explore the U.S. Sectors & Industries Explorer →

Global Thematic

Thematic performance was dominated by a surge in digital asset strategies, which stood in stark contrast to the weakness in traditional equities. Crypto-focused funds were the day’s clear leaders, with the First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT) rallying 8.53% and the Global X Blockchain ETF (BKCH) climbing 5.93%. Conversely, themes related to defense and specialized healthcare faced headwinds. The Defiance Drone and Modern Warfare ETF (JEDI) fell 3.95%, while the Virtus Biotech Clinical Trials ETF (BBC) declined 3.85%.

Name (Ticker) 1-Day
Leaders
First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT) 8.53%
Global X Blockchain ETF (BKCH) 5.93%
Bitwise Crypto Industry Innovators ETF (BITQ) 5.76%
Schwab Crypto Thematic Natural Language Processing ETF (STCE) 5.26%
VanEck Digital Transformation ETF (DAPP) 4.96%
Laggards
Defiance Drone and Modern Warfare ETF (JEDI) -3.95%
Virtus Biotech Clinical Trials ETF (BBC) -3.85%
REX Drone ETF (DRNZ) -3.59%
iShares Genomics Immunology and Healthcare ETF (IDNA) -3.58%
Roundhill Space & Technology ETF (MARS) -3.43%

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Developed ex-U.S. & Emerging Markets

International equity performance was mixed, with emerging markets outperforming their developed counterparts. The broad Emerging Markets index (EEM) rose 0.77%, buoyed by a standout 2.14% gain in South Korea (EWY). In contrast, the Developed ex-U.S. index (EFA) slipped 0.29%, with most major European and Asian markets posting modest losses. Switzerland (EWL) was among the weaker performers, down 1.12%, while the U.K. (EWU) was nearly flat with a 0.06% decline.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Developed Markets ex-U.S.
Developed ex-U.S. (EFA) -0.29% 4.66% 5.23% 13.55% 20.12%
Australia (EWA) -0.73% 4.31% 4.40% 15.20% 14.94%
Canada (EWC) -0.10% 5.37% 6.48% 15.07% 32.91%
France (EWQ) -0.57% 4.81% 5.53% 6.70% 9.73%
Germany (EWG) -0.27% 7.46% 4.46% 5.40% 5.67%
Hong Kong (EWH) 0.22% 3.66% -2.36% 9.73% 13.82%
Japan (EWJ) -0.54% 4.25% 3.91% 17.38% 23.51%
Netherlands (EWN) -0.48% 3.67% 6.59% 22.12% 34.96%
South Korea (EWY) 2.14% 9.39% -1.08% 83.25% 155.35%
Switzerland (EWL) -1.12% 2.26% 4.12% 8.18% 16.84%
U.K. (EWU) -0.06% 4.63% 4.63% 11.96% 20.31%
Emerging Markets
Emerging Markets (EEM) 0.77% 4.81% 2.28% 22.38% 36.52%
Brazil (EWZ) -0.35% -3.78% -6.22% 8.49% 28.94%
China (MCHI) 0.22% 2.64% -1.32% -6.98% -5.60%
India (INDA) 0.02% 2.06% 3.19% -8.33% -7.90%
Indonesia (EIDO) -0.64% -0.24% -5.68% -31.96% -30.93%
Malaysia (EWM) -0.18% 1.86% -1.68% 6.05% 17.02%
Mexico (EWW) 0.48% 0.55% -2.35% 10.49% 27.67%
South Africa (EZA) 0.26% 14.34% 5.02% 4.60% 32.93%
Taiwan (EWT) -0.60% 8.47% 13.22% 63.81% 85.21%
Thailand (THD) -0.34% 0.74% 4.08% 26.16% 32.77%

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Fixed Income

Fixed income markets weakened as rising oil prices renewed inflation fears and pushed Treasury yields higher across the curve. The core U.S. Aggregate Bond ETF (AGG) fell 0.34%, with longer-duration assets seeing the largest price declines, evidenced by a 0.72% drop in the Long-Term Bond ETF (BLV). Bucking the trend, floating-rate Bank Loans (BKLN) managed a 0.10% gain, benefiting from the rising rate environment. Inflation Protected Treasuries (TIP) finished the session nearly unchanged.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Multisector
Short-Term (BSV) -0.08% 0.33% 0.70% 0.82% 2.68%
Core Enhanced (IUSB) -0.31% -0.02% 0.44% 0.19% 2.72%
Core (AGG) -0.34% -0.12% 0.27% -0.09% 2.38%
Long-Term (BLV) -0.72% -1.18% -0.79% -2.32% 0.21%
Government
Inflation Protected (TIP) 0.01% 0.24% 0.24% 1.17% 2.46%
Ultrashort (BIL) 0.00% 0.31% 0.89% 2.27% 3.73%
Short-Term (SPTS) -0.03% 0.35% 0.74% 1.11% 2.91%
Intermediate (SPTI) -0.25% 0.05% 0.45% -0.32% 1.61%
Long-Term (SPTL) -0.71% -1.12% -0.27% -2.53% -0.01%
Specialty
Bank Loans (BKLN) 0.10% 0.98% 1.48% 1.64% 4.68%
Convertible (CWB) -0.15% 1.93% 0.88% 17.17% 24.23%
High Yield (HYG) -0.19% 0.33% 1.09% 2.13% 4.97%
Corporate (SPIB) -0.21% 0.02% 0.47% 0.50% 2.85%
Mortgage Backed (MBB) -0.29% 0.08% 0.59% 0.44% 3.96%
Preferred Stock (PFF) -0.46% 0.90% -0.77% 1.29% 2.08%
International & EM
International Local (IGOV) -0.17% 1.92% 0.10% -0.48% -0.29%
International USD (BNDX) -0.19% -0.11% 0.15% 0.22% 1.07%
Emerging Local (EMLC) -0.35% 1.90% 3.40% 3.30% 8.34%
Emerging USD (EMB) -0.46% -0.30% 1.02% 1.35% 6.16%
Municipals
Short-Term (SUB) 0.03% 0.35% 0.77% 1.14% 1.99%
High Yield (HYD) -0.06% -1.00% 0.48% 0.81% 6.45%
Intermediate (MUB) -0.20% -0.60% 0.37% 0.32% 4.66%
Long-Term (MLN) -0.32% -0.85% 1.33% 1.27% 7.51%

Explore the related Explorers: Taxable → · Municipal → · Specialty →

Commodities

Commodities posted broad gains, driven by strength in energy and precious metals amid a weaker U.S. dollar and heightened geopolitical risk. The Broad Commodities index (DJP) advanced 0.84%. WTI Crude Oil (USO) jumped 2.77% following escalating tensions in the Middle East. Precious metals also rallied, with Silver (SLV) surging 2.75% and Gold (GLD) adding 0.34%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Broad Commodities (DJP) 0.84% 6.63% 0.16% 33.85% 50.22%
Agriculture
Corn (CORN) 0.37% 5.14% 2.23% 6.20% 10.31%
Broad (DBA) 0.32% 1.28% 1.47% 11.21% 8.08%
Wheat (WEAT) 0.16% 1.56% 1.93% 27.09% 20.00%
Soybeans (SOYB) 0.04% 1.12% 4.30% 19.72% 18.85%
Sugar (CANE) -0.44% 14.53% 12.12% 14.71% 0.83%
Energy
WTI Crude (USO) 2.77% 7.19% -6.74% 94.53% 83.00%
Brent Crude (BNO) 2.24% 8.46% -3.86% 88.88% 79.26%
Broad (DBE) 2.08% 8.83% 2.33% 90.49% 84.64%
Natural Gas (UNG) 0.00% -2.72% -12.88% -18.35% -17.48%
Industrial Metals
Copper (CPER) -0.10% 2.42% 2.02% 12.56% 42.26%
Broad (DBB) -0.44% 2.61% -2.52% 9.68% 32.95%
Precious Metals
Silver (SLV) 2.75% 20.95% -10.29% -4.28% 79.09%
Platinum (PPLT) 1.34% 15.27% -5.82% -10.53% 36.50%
Broad (DBP) 0.76% 14.48% -2.79% 1.92% 40.38%
Gold (GLD) 0.34% 12.97% -0.51% 4.78% 34.67%
Palladium (PALL) -0.12% 6.14% -3.24% -16.77% 19.00%

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Cryptocurrency

Cryptocurrencies staged a powerful rally, decoupling from the negative sentiment seen in traditional risk assets. The entire complex moved sharply higher, led by a remarkable 15.69% surge in XRP (XRP). The two largest digital assets also posted strong gains, with Ethereum (ETHA) climbing 10.52% and Bitcoin (IBIT) advancing 6.24%. This broad-based strength propelled the Multi-Coin index (NCIQ) up by 7.15% for the session.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Solana (SOLZ) 5.97% 12.47% 1.34% -30.53% -56.36%
Bitcoin (IBIT) 6.24% 11.68% -6.34% -17.02% -36.52%
Multi-Coin (NCIQ) 7.15% 12.70% -4.94% -19.58% -41.45%
Ethereum (ETHA) 10.52% 22.47% 8.74% -21.76% -46.67%
XRP (XRP) 15.69% 10.50% -10.10% -32.80%

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What to Watch Today

Looking ahead to Friday, market participants will be monitoring the monthly State Employment and Unemployment data for July, scheduled for release at 10:00 AM ET. In the afternoon, the Federal Reserve will issue its H.8 statistical release on the assets and liabilities of U.S. commercial banks. The earnings calendar includes reports from BJ’s Wholesale Club (BJ) and The Buckle (BKE) 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.