Cooling Inflation Data Fuels Broad Market Gains

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Macro Overview

U.S. equities advanced after a softer-than-expected Producer Price Index report bolstered hopes for a pause in Federal Reserve rate hikes. The S&P 500 (IVV) rose 0.43%, and Developed ex-U.S. markets (EFA) gained 0.66%, supported by the positive inflation news. In contrast, Emerging Markets (EEM) edged lower by 0.15%, weighed down by reports of slowing GDP growth in China. Broad Commodities (DJP) added 0.56%, while the U.S. Aggregate Bond (AGG) index ticked up 0.14% as Treasury yields fell.

U.S. Size & Style

Gains were seen across the U.S. size and style spectrum, with a slight tilt towards smaller capitalization stocks. The Small Cap index (IJR) climbed 0.54%, with its value counterpart (IJS) advancing 0.61%. Large caps also participated in the rally, as the Large Cap Growth index (IVW) rose 0.49%. Mid Cap Growth (IJK) was the sole segment to finish in the red, posting a marginal decline of 0.09%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Large Value (IVE) 0.13% 0.66% 6.03% 9.40% 19.51%
Large Cap (IVV) 0.43% 0.27% 8.13% 11.31% 22.79%
Large Growth (IVW) 0.49% -0.12% 9.77% 12.61% 25.09%
Mid Value (IJJ) 0.26% 0.67% 6.67% 12.60% 19.68%
Mid Cap (IJH) 0.08% -0.70% 6.25% 15.14% 22.55%
Mid Growth (IJK) -0.09% -2.08% 5.76% 17.39% 25.07%
Small Value (IJS) 0.61% 1.45% 9.78% 20.49% 36.48%
Small Cap (IJR) 0.54% 1.93% 10.84% 22.18% 33.62%
Small Growth (IJT) 0.42% 2.28% 11.76% 23.64% 30.83%

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U.S. Sectors & Industries

Sector performance was highly divergent, reflecting the day’s specific corporate news. Communication Services (XLC) led all sectors with a 1.73% gain, followed by Financials (XLF), which rose 0.68% on strong bank earnings and now shows an overbought RSI of 71. Conversely, the Technology sector (XLK) was the day’s worst performer, falling 1.11% after a record-setting plunge in IBM shares. Utilities (XLU) also underperformed, declining 1.03%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
S&P 500 (SPY) 0.40% 0.25% 8.11% 11.28% 22.67%
Communication Services (XLC) 1.73% 1.33% -3.13% -3.13% 8.32%
Consumer Discretionary (XLY) 0.95% -1.12% -0.80% -1.63% 7.64%
Financials (XLF) 0.68% 5.97% 8.79% 4.16% 11.19%
Real Estate (XLRE) 0.18% -0.10% 3.54% 12.13% 11.56%
Consumer Staples (XLP) 0.06% -1.67% 3.69% 8.81% 7.15%
Health Care (XLV) 0.00% 3.98% 7.59% 3.12% 21.45%
Industrials (XLI) -0.22% 1.02% 5.44% 16.68% 21.67%
Materials (XLB) -0.28% -3.45% -1.34% 12.26% 15.35%
Energy (XLE) -0.79% 2.43% 2.05% 28.09% 34.08%
Utilities (XLU) -1.03% 1.72% -1.11% 7.34% 13.36%
Technology (XLK) -1.11% -5.21% 20.96% 26.43% 41.54%

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Global Thematic

Thematic performance was heavily influenced by the day’s sector trends, with financial technology funds leading the advance. The Amplify Digital Payments ETF (IPAY) surged 2.88%, and the Global X FinTech ETF (FINX) climbed 2.43%, benefiting from positive earnings in the financial sector. On the other end of the spectrum, semiconductor-focused funds faced significant headwinds. The Roundhill Memory ETF (DRAM) was the day’s biggest laggard, dropping 6.26%.

Name (Ticker) 1-Day
Leaders
Amplify Digital Payments ETF (IPAY) 2.88%
VanEck Alternative Asset Manager ETF (GPZ) 2.71%
Global X FinTech ETF (FINX) 2.43%
Roundhill Magnificent Seven ETF (MAGS) 2.34%
ProShares Online Retail ETF (ONLN) 2.32%
Laggards
Roundhill Memory ETF (DRAM) -6.26%
Tuttle Capital Pure Play Photonics ETF (FOTO) -4.40%
Amplify Seymour Cannabis ETF (CNBS) -3.17%
VistaShares Artificial Intelligence Supercycle ETF (AIS) -3.16%
VanEck Rare Earth and Strategic Metals ETF (REMX) -3.15%

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Developed ex-U.S. & Emerging Markets

Developed international markets generally posted gains, though performance varied significantly by country. Hong Kong (EWH) and the Netherlands (EWN) were standouts, rising 1.89% and 1.81% respectively. However, South Korea (EWY) experienced a sharp 3.02% decline, marking a major divergence. In the emerging markets, China (MCHI) managed a 1.73% gain despite disappointing GDP data, while Indonesia (EIDO) continued its downward trend with a 0.50% loss.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Developed Markets ex-U.S.
Developed ex-U.S. (EFA) 0.66% 0.55% 2.89% 10.69% 22.96%
Australia (EWA) 0.31% 0.70% -3.48% 11.52% 13.96%
Canada (EWC) 0.52% 0.95% 2.98% 10.83% 30.98%
France (EWQ) 0.95% -0.61% 0.91% 3.47% 9.93%
Germany (EWG) 0.27% -0.81% -0.08% -0.41% 1.21%
Hong Kong (EWH) 1.89% 0.96% -4.98% 5.57% 15.29%
Japan (EWJ) -0.42% -0.60% 5.53% 16.42% 36.08%
Netherlands (EWN) 1.81% -1.97% 8.94% 21.59% 32.23%
South Korea (EWY) -3.02% -18.83% 18.44% 76.55% 140.24%
Switzerland (EWL) 1.49% 2.71% 4.61% 7.52% 18.99%
U.K. (EWU) 0.99% 1.21% -0.74% 7.88% 22.16%
Emerging Markets
Emerging Markets (EEM) -0.15% -5.99% 5.95% 20.45% 37.32%
Brazil (EWZ) -0.42% 3.58% -12.63% 14.01% 36.60%
China (MCHI) 1.73% -1.42% -6.07% -9.26% -2.65%
India (INDA) -0.02% -1.10% -2.52% -9.86% -11.22%
Indonesia (EIDO) -0.50% -5.51% -24.86% -34.62% -30.34%
Malaysia (EWM) -0.93% 0.25% -0.72% 3.81% 21.24%
Mexico (EWW) 0.07% -3.05% -3.70% 10.33% 31.32%
South Africa (EZA) 0.46% -5.92% -10.71% -5.39% 29.90%
Taiwan (EWT) 0.60% -3.65% 26.94% 61.33% 83.99%
Thailand (THD) -0.54% -1.24% 2.88% 24.07% 39.92%

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Fixed Income

The fixed income market responded positively to the cooling inflation data, as falling Treasury yields lifted bond prices across the curve. The core U.S. Aggregate Bond index (AGG) gained 0.14%, while the duration-sensitive Long-Term Treasury index (SPTL) rose 0.20%. Credit-sensitive areas also saw gains, with High Yield (HYG) up 0.16%. Convertible bonds (CWB) were a notable exception, falling 0.53% in a move likely tied to weakness in the technology sector.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Multisector
Long-Term (BLV) 0.28% -1.40% -1.59% -0.73% 4.69%
Core Enhanced (IUSB) 0.18% -0.36% -0.37% 0.42% 4.67%
Core (AGG) 0.14% -0.38% -0.49% 0.22% 4.45%
Short-Term (BSV) 0.13% 0.10% 0.10% 0.59% 3.51%
Government
Intermediate (SPTI) 0.21% -0.03% -0.58% -0.23% 3.33%
Long-Term (SPTL) 0.20% -1.08% -1.59% -1.04% 4.17%
Short-Term (SPTS) 0.14% 0.17% 0.36% 0.82% 3.39%
Inflation Protected (TIP) 0.06% -0.58% -0.43% 0.95% 3.45%
Ultrashort (BIL) 0.01% 0.30% 0.90% 1.91% 3.82%
Specialty
Preferred Stock (PFF) 0.36% -1.72% -1.03% 1.38% 4.43%
Corporate (SPIB) 0.21% -0.07% -0.07% 0.63% 4.58%
Mortgage Backed (MBB) 0.17% -0.37% -0.46% 0.64% 5.89%
High Yield (HYG) 0.16% 0.17% 0.69% 1.96% 5.98%
Bank Loans (BKLN) 0.05% 0.55% 1.16% 0.51% 3.93%
Convertible (CWB) -0.53% -5.55% 4.97% 16.96% 24.93%
International & EM
International Local (IGOV) 0.50% -1.39% -2.31% -1.58% -0.93%
Emerging Local (EMLC) 0.24% -0.25% -0.10% 2.06% 8.51%
Emerging USD (EMB) 0.17% -0.60% 0.73% 2.04% 10.07%
International USD (BNDX) 0.15% -0.27% 0.52% 0.77% 2.21%
Municipals
Short-Term (SUB) -0.03% -0.04% 0.29% 0.83% 2.33%
High Yield (HYD) -0.08% -0.02% 1.57% 2.24% 8.18%
Long-Term (MLN) -0.11% 0.28% 1.14% 2.58% 9.82%
Intermediate (MUB) -0.18% -0.11% 0.69% 1.27% 6.34%

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Commodities

Commodities were lifted by gains in the agriculture and energy complexes, driven by geopolitical developments. Wheat (WEAT) was the day’s top performer, surging 4.22% amid escalating conflict in the Black Sea region that threatens grain supplies. WTI Crude oil (USO) also advanced, gaining 1.01% as tensions between the U.S. and Iran persisted. In contrast, precious metals showed weakness, with Silver (SLV) declining 1.81% while Gold (GLD) remained nearly unchanged.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Broad Commodities (DJP) 0.56% 2.52% -0.89% 24.57% 35.21%
Agriculture
Wheat (WEAT) 4.22% 10.56% 10.61% 24.79% 11.75%
Corn (CORN) 1.72% 5.52% -1.55% 0.34% 1.60%
Broad (DBA) 1.27% 6.07% 2.98% 9.64% 13.13%
Soybeans (SOYB) 1.11% 5.72% 4.38% 16.74% 19.56%
Sugar (CANE) -0.30% 5.26% 6.98% 0.56% -11.02%
Energy
WTI Crude (USO) 1.01% 0.14% -0.99% 75.51% 61.28%
Broad (DBE) 0.71% 4.04% 4.11% 70.25% 58.87%
Brent Crude (BNO) 0.63% 3.34% 0.57% 68.04% 57.58%
Natural Gas (UNG) 0.29% -7.70% -0.28% -13.95% -32.11%
Industrial Metals
Copper (CPER) 0.23% -2.57% 3.68% 10.50% 12.59%
Broad (DBB) -0.12% -3.30% -1.88% 7.19% 32.72%
Precious Metals
Platinum (PPLT) 2.77% -5.42% -21.18% -18.52% 22.27%
Palladium (PALL) 0.72% -2.17% -16.46% -17.90% 9.36%
Gold (GLD) 0.05% -6.10% -15.46% -6.05% 21.39%
Broad (DBP) -0.30% -8.42% -18.42% -9.51% 25.03%
Silver (SLV) -1.81% -17.74% -27.32% -18.95% 52.39%

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Cryptocurrency

The cryptocurrency market posted modest gains, with Ethereum outperforming its larger peer. The Ethereum tracker (ETHA) rose 2.40%, while the Bitcoin equivalent (IBIT) saw a smaller increase of 0.63%. The broader Multi-Coin index (NCIQ) advanced 0.50% for the session. XRP (XRP) was a minor laggard, ending the day down 0.37%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
XRP (XRP) -0.37% -12.97% -20.75% -39.52%
Solana (SOLZ) 0.00% 2.44% -10.15% -38.63% -55.80%
Multi-Coin (NCIQ) 0.50% -2.17% -14.72% -28.65% -45.97%
Bitcoin (IBIT) 0.63% -2.46% -13.51% -25.86% -44.36%
Ethereum (ETHA) 2.40% 5.52% -19.20% -35.27% -37.01%

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What to Watch Today

Looking ahead to Thursday, market participants will be closely watching a full slate of economic data and corporate earnings. Key data releases include the weekly Initial Jobless Claims, June Retail Sales, and the July Philadelphia Fed Manufacturing Index, all scheduled for 8:30 AM ET. The earnings calendar is also busy, with pre-market reports from UnitedHealth Group and U.S. Bancorp, followed by results from Netflix after the closing bell. Additionally, several Federal Reserve officials are scheduled to speak, including Governor Lisa Cook and Vice Chair Philip Jefferson, whose comments on the economic outlook will be scrutinized.

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.