Rate Hike Hopes Ease, Fueling Rally in Equities and Digital Assets

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Macro Overview

U.S. equities rallied on Thursday, propelled by comments from a Federal Reserve official that eased concerns about an imminent interest rate hike and sent Treasury yields lower. The S&P 500 (IVV) gained 1.08%, a move that was closely matched by Developed ex-U.S. markets (EFA) which rose 1.07%. Emerging Markets (EEM) saw a more modest advance of 0.48%, while U.S. Aggregate Bonds (AGG) ticked up 0.11%. Broad commodities (DJP) were nearly flat, masking significant divergence between surging precious metals and falling agricultural products.

U.S. Size & Style

Large-cap stocks led the day’s advance, with growth-oriented names showing particular strength. The S&P 500 Large Cap Growth (IVW) climbed 1.31%, outpacing its value counterpart. Performance moderated down the capitalization spectrum, with mid-caps posting solid but smaller gains. Small caps lagged considerably, as the S&P Small Cap 600 (IJR) rose just 0.34%, suggesting investors favored larger, more established companies during the session.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Large Value (IVE) 0.68% 2.27% 5.39% 13.26% 19.62%
Large Cap (IVV) 1.08% 2.08% 2.90% 14.06% 21.57%
Large Growth (IVW) 1.31% 1.81% 0.62% 14.38% 22.82%
Mid Value (IJJ) 0.61% -1.04% 3.77% 13.06% 15.99%
Mid Cap (IJH) 0.85% -0.47% 1.08% 15.32% 18.43%
Mid Growth (IJK) 1.08% 0.06% -1.45% 17.28% 20.47%
Small Value (IJS) 0.07% -1.09% 5.00% 20.88% 27.76%
Small Cap (IJR) 0.34% -2.07% 4.90% 21.04% 25.37%
Small Growth (IJT) 0.54% -3.26% 4.75% 20.84% 22.64%

Explore the U.S. Size & Style Explorer →

U.S. Sectors & Industries

Financials (XLF) topped the sector leaderboard with a 1.56% gain as falling Treasury yields provided a tailwind for the group. Technology (XLK) and Consumer Discretionary (XLY) were also strong performers, rising 1.29% and 1.39% respectively. In a notable divergence, the Energy sector (XLE) fell 0.74% despite reports of rising crude oil prices due to geopolitical tensions. Materials (XLB) and Consumer Staples (XLP) were the only other sectors to finish with losses.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
S&P 500 (SPY) 1.05% 2.05% 2.77% 13.99% 21.43%
Financials (XLF) 1.56% 2.06% 15.52% 7.84% 11.15%
Consumer Discretionary (XLY) 1.39% -1.48% -0.03% -2.08% 1.64%
Technology (XLK) 1.29% 4.45% -5.12% 29.48% 43.05%
Real Estate (XLRE) 1.19% -2.06% 2.58% 11.35% 10.33%
Industrials (XLI) 1.03% -4.70% 0.54% 13.12% 18.02%
Communication Services (XLC) 0.85% 1.83% 1.43% -3.13% 1.55%
Utilities (XLU) 0.84% -3.00% -0.93% 2.14% 5.50%
Health Care (XLV) 0.18% 6.79% 17.94% 12.88% 28.75%
Consumer Staples (XLP) -0.32% 0.47% 4.50% 11.14% 8.74%
Materials (XLB) -0.62% 3.16% 2.30% 16.98% 17.78%
Energy (XLE) -0.74% 9.92% 10.85% 46.50% 50.56%

Explore the U.S. Sectors & Industries Explorer →

Global Thematic

Thematic performance was overwhelmingly dominated by a powerful rally in digital assets and blockchain-related strategies. Crypto-focused funds crowded the top of the leaderboard, with the Global X Blockchain ETF (BKCH) and the First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT) both surging more than 10%. This concentrated strength highlighted a significant risk-on move within the crypto ecosystem. Laggards for the day were found in niche technology and materials themes, such as the Roundhill Photonics & Optics ETF (LYTE), which declined 2.17%.

Name (Ticker) 1-Day
Leaders
Global X Blockchain ETF (BKCH) 10.51%
First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT) 10.24%
Bitwise Crypto Industry Innovators ETF (BITQ) 9.80%
VanEck Digital Transformation ETF (DAPP) 9.67%
Schwab Crypto Thematic Natural Language Processing ETF (STCE) 9.17%
Laggards
Roundhill Photonics & Optics ETF (LYTE) -2.17%
Tema Photonics & Optical ETF (LAZR) -1.30%
Sprott Rare Earths Ex-China ETF (REXC) -1.30%
Global X Genomics & Biotechnology ETF (GNOM) -1.08%
Amplify Seymour Cannabis ETF (CNBS) -0.95%

Explore the Thematic Explorer →

Developed ex-U.S. & Emerging Markets

International developed markets participated in the global equity rally, with the MSCI EAFE Index (EFA) gaining 1.07%. Standouts included Canada (EWC) and Japan (EWJ), which both advanced nearly 2%. Emerging markets displayed a more mixed picture; South Africa (EZA) was a clear outperformer with a 2.61% rally. Conversely, weakness in China (MCHI), which fell 0.31%, acted as a drag on the broader MSCI Emerging Markets Index (EEM).

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Developed Markets ex-U.S.
Developed ex-U.S. (EFA) 1.07% 2.07% 5.56% 14.46% 23.36%
Australia (EWA) 1.13% 3.30% 5.70% 17.60% 17.78%
Canada (EWC) 1.96% 4.73% 7.03% 16.38% 29.58%
France (EWQ) 0.33% -2.70% 2.85% 4.08% 10.64%
Germany (EWG) 0.92% 1.24% 4.73% 5.40% 9.12%
Hong Kong (EWH) 0.48% 0.26% 2.36% 9.87% 14.03%
Japan (EWJ) 1.94% 5.37% 4.77% 21.90% 31.08%
Netherlands (EWN) 0.15% 0.87% 2.10% 20.56% 36.71%
South Korea (EWY) 0.95% 12.68% -15.21% 85.72% 153.28%
Switzerland (EWL) 0.95% 0.51% 6.10% 7.76% 17.31%
U.K. (EWU) 0.95% 0.93% 6.38% 12.28% 22.24%
Emerging Markets
Emerging Markets (EEM) 0.48% 4.90% -3.02% 23.94% 37.55%
Brazil (EWZ) 0.11% 4.70% 11.13% 21.16% 37.55%
China (MCHI) -0.31% -2.74% -2.24% -8.89% -9.67%
India (INDA) -0.10% -0.48% 5.41% -7.64% -5.13%
Indonesia (EIDO) 1.69% 6.01% 10.48% -28.04% -23.71%
Malaysia (EWM) 0.71% 0.64% 3.01% 5.53% 17.94%
Mexico (EWW) 0.98% 0.55% 0.02% 12.64% 26.77%
South Africa (EZA) 2.61% 11.64% 9.40% 6.60% 34.09%
Taiwan (EWT) 0.64% 12.40% 3.02% 73.35% 96.16%
Thailand (THD) 1.44% 0.26% 1.03% 25.44% 29.29%

Explore the Global (ex-U.S.) Size & Style Explorer →

Fixed Income

The fixed income market saw modest gains across most categories as Treasury yields pulled back from recent highs. The U.S. Aggregate Bond index (AGG) rose 0.11%, with similar performance across the Treasury curve. Convertible bonds were a notable bright spot, with the SPDR Bloomberg Convertible Securities ETF (CWB) climbing 1.14% as it benefited from the strong performance in equities. International bonds also firmed, while parts of the high-yield municipal market, such as the SPDR Nuveen Bloomberg High Yield Municipal Bond ETF (HYD), experienced slight declines.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Multisector
Long-Term (BLV) 0.15% 0.08% -2.58% -2.31% 0.07%
Core (AGG) 0.11% 0.03% -0.56% -0.30% 1.68%
Core Enhanced (IUSB) 0.11% 0.07% -0.46% -0.03% 2.01%
Short-Term (BSV) 0.08% 0.13% 0.36% 0.65% 2.08%
Government
Long-Term (SPTL) 0.16% 0.33% -2.22% -2.59% -0.28%
Intermediate (SPTI) 0.14% -0.09% -0.29% -0.70% 0.59%
Inflation Protected (TIP) 0.13% 0.13% -0.85% 0.68% 0.98%
Short-Term (SPTS) 0.07% 0.18% 0.57% 1.02% 2.47%
Ultrashort (BIL) 0.02% 0.31% 0.91% 2.41% 3.72%
Specialty
Convertible (CWB) 1.14% -0.66% -5.98% 16.09% 21.34%
Preferred Stock (PFF) 0.53% -0.36% -1.40% 1.48% 2.01%
Mortgage Backed (MBB) 0.16% 0.30% -0.46% 0.12% 2.93%
Bank Loans (BKLN) 0.15% 1.34% 1.99% 2.20% 4.91%
High Yield (HYG) 0.13% 0.42% 0.91% 2.24% 4.24%
Corporate (SPIB) 0.09% -0.06% -0.18% 0.29% 2.22%
International & EM
International Local (IGOV) 0.63% 0.27% -0.24% -0.74% -0.39%
Emerging Local (EMLC) 0.47% 1.50% 2.52% 3.47% 8.32%
International USD (BNDX) 0.32% -0.67% -0.59% -0.05% 0.90%
Emerging USD (EMB) 0.32% 0.12% -0.23% 1.56% 6.01%
Municipals
Short-Term (SUB) -0.02% 0.14% 0.16% 0.95% 1.71%
Long-Term (MLN) -0.18% -1.52% -2.34% -0.47% 5.10%
Intermediate (MUB) -0.21% -1.10% -2.02% -0.80% 3.03%
High Yield (HYD) -0.22% -0.89% -2.45% -0.40% 4.37%

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

Commodities

The commodities complex was split between strength in precious metals and weakness in agricultural products. Escalating geopolitical tensions in the Middle East fueled a flight to safety, sending Palladium (PALL) soaring 4.92% and Gold (GLD) up 1.85%. Crude oil also firmed, with the United States Oil Fund (USO) gaining 0.67%. However, these gains were offset by sharp drops in agriculture, highlighted by a 2.66% decline in the Teucrium Wheat Fund (WEAT).

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Broad Commodities (DJP) -0.13% 11.36% 5.78% 38.18% 49.73%
Agriculture
Soybeans (SOYB) 0.62% 10.10% 12.60% 27.13% 26.26%
Corn (CORN) -0.25% 12.49% 15.46% 13.76% 14.86%
Broad (DBA) -0.61% 4.68% 8.30% 13.99% 10.30%
Sugar (CANE) -2.32% 15.75% 17.67% 16.76% 5.78%
Wheat (WEAT) -2.66% 11.79% 19.63% 35.80% 30.07%
Energy
WTI Crude (USO) 0.67% 16.35% 0.87% 105.45% 89.88%
Brent Crude (BNO) 0.29% 16.87% 3.63% 97.39% 84.00%
Broad (DBE) -0.26% 15.51% 7.70% 97.82% 87.04%
Natural Gas (UNG) -2.42% 3.76% -10.42% -14.44% -19.68%
Industrial Metals
Copper (CPER) 0.96% 0.68% 1.24% 14.16% 40.73%
Broad (DBB) 0.70% 2.38% -1.60% 12.42% 33.11%
Precious Metals
Palladium (PALL) 4.92% 12.97% 8.68% -11.30% 23.23%
Platinum (PPLT) 3.19% 11.72% -2.31% -11.55% 27.21%
Silver (SLV) 2.51% 15.42% -8.55% -6.01% 62.16%
Broad (DBP) 2.24% 11.22% -1.55% 0.55% 29.02%
Gold (GLD) 1.85% 10.36% 0.58% 3.51% 25.01%

Explore the Commodities Explorer →

Cryptocurrency

Digital assets experienced a significant rally, with broad-based gains across the major tokens reflecting renewed risk appetite. XRP (XRP) led the charge, surging an impressive 9.67%. The two largest cryptocurrencies, Bitcoin (IBIT) and Ethereum (ETHA), also posted strong advances of 5.85% and 5.37%, respectively. This synchronized move higher lifted the entire digital asset ecosystem and fueled outperformance in crypto-related thematic ETFs.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Ethereum (ETHA) 5.37% 34.80% 40.06% -15.20% -43.84%
Bitcoin (IBIT) 5.85% 28.18% 25.27% -6.65% -27.32%
Multi-Coin (NCIQ) 6.08% 29.20% 26.30% -9.38% -33.31%
Solana (SOLZ) 6.17% 42.30% 46.49% -16.35% -52.63%
XRP (XRP) 9.67% 36.29% 22.40% -19.83%

Explore the Digital Assets Explorer →

What to Watch Today

Looking ahead to Friday, market participants will be keenly focused on the August Employment Situation report from the Bureau of Labor Statistics. This pivotal data will offer a fresh assessment of the U.S. labor market’s health and could significantly influence the Federal Reserve’s policy outlook. Additionally, investors will be reacting to details from Tesla’s ‘Cybercab’ autonomous vehicle event, which was held after Thursday’s market close.

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.