Small Caps Rally as Technology and Commodities Retreat

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Macro Overview

Global markets delivered a mixed performance as investors navigated sector rotations and macroeconomic crosscurrents. In the U.S., the S&P 500 (IVV) finished nearly flat with a 0.07% loss, while Developed ex-U.S. equities (EFA) also dipped slightly. Emerging Markets (EEM) managed a modest 0.12% gain, bucking the trend seen in most developed regions. The most significant move occurred in commodities, where the Broad Commodities index (DJP) fell 2.06%, pressured by a sharp decline in oil prices and a strengthening U.S. dollar.

U.S. Size & Style

A clear divergence emerged between large and small-cap U.S. equities during the session. Large-cap growth stocks (IVW) declined by 0.26%, weighed down by persistent weakness in the technology sector. In contrast, smaller companies demonstrated significant strength, with Small Growth (IJT) and Small Cap (IJR) advancing 1.25% and 1.16%, respectively. This rotation suggests a shift in investor appetite towards segments of the market outside of the mega-cap technology names that have recently faced pressure.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Large Value (IVE) 0.04% -0.37% 8.06% 7.52% 19.13%
Large Cap (IVV) -0.07% -1.41% 12.55% 8.12% 22.30%
Large Growth (IVW) -0.26% -2.30% 16.51% 8.39% 24.57%
Mid Value (IJJ) 0.89% 3.75% 11.15% 11.50% 20.60%
Mid Cap (IJH) 0.61% 3.33% 12.30% 15.34% 24.74%
Mid Growth (IJK) 0.33% 2.88% 13.30% 18.88% 28.56%
Small Value (IJS) 1.00% 3.97% 14.22% 18.55% 37.39%
Small Cap (IJR) 1.16% 5.43% 17.04% 20.72% 34.67%
Small Growth (IJT) 1.25% 6.84% 19.91% 22.74% 31.95%

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U.S. Sectors & Industries

Sector performance was widely dispersed, reflecting the broader market’s rotational nature. Industrials (XLI) led the way with a 1.16% gain, joined by other defensive and cyclical areas like Consumer Discretionary (XLY) and Utilities (XLU), which both rose over 1%. At the bottom of the ledger, the Energy sector (XLE) slid 1.63% as crude oil prices fell, while Communication Services (XLC) dropped 0.68%, pushing its RSI into oversold territory at 27.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
S&P 500 (SPY) -0.05% -1.41% 12.54% 8.10% 22.18%
Industrials (XLI) 1.16% 5.17% 10.15% 16.78% 25.82%
Consumer Discretionary (XLY) 1.15% -3.25% 5.13% -3.25% 7.58%
Utilities (XLU) 1.04% 1.06% 1.64% 8.10% 14.72%
Consumer Staples (XLP) 0.86% 0.27% 4.83% 10.08% 6.72%
Health Care (XLV) 0.77% 2.76% 6.38% -0.09% 16.62%
Materials (XLB) 0.57% 2.11% 5.99% 13.73% 18.84%
Real Estate (XLRE) -0.29% 0.75% 11.43% 12.01% 8.93%
Financials (XLF) -0.30% 3.79% 9.39% -1.07% 5.75%
Technology (XLK) -0.62% 1.59% 34.61% 27.45% 48.84%
Communication Services (XLC) -0.68% -7.48% -3.88% -8.97% 2.52%
Energy (XLE) -1.63% -9.31% -11.32% 21.45% 30.08%

Explore the U.S. Sectors & Industries Explorer →

Global Thematic

Thematic performance highlighted a risk-off sentiment in digital assets alongside strong interest in the housing sector. Home construction funds were standout leaders, with the iShares U.S. Home Construction ETF (ITB) and the State Street SPDR S&P Homebuilders ETF (XHB) surging 6.15% and 5.62%, respectively. Conversely, the day’s laggards were dominated by cryptocurrency and blockchain-related strategies. The First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT) posted a significant loss of 7.61%, mirroring the broad sell-off in the crypto market.

Name (Ticker) 1-Day
Leaders
ARK Genomic Revolution ETF (ARKG) 7.14%
iShares U.S. Home Construction ETF (ITB) 6.15%
State Street SPDR S&P Homebuilders ETF (XHB) 5.62%
ROBO Global Healthcare Technology and Innovation ETF (HTEC) 3.17%
Global X Genomics & Biotechnology ETF (GNOM) 2.97%
Laggards
First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT) -7.61%
Defiance Drone and Modern Warfare ETF (JEDI) -5.98%
CoinShares Bitcoin Mining ETF (WGMI) -5.95%
Global X Blockchain ETF (BKCH) -5.87%
Sprott Junior Gold Miners ETF (SGDJ) -5.46%

Explore the Thematic Explorer →

Developed ex-U.S. & Emerging Markets

International equity performance was varied across regions. In developed markets, Germany (EWG) fell 1.05%, while Switzerland (EWL) gained 1.15%, but the most notable move was South Korea (EWY) jumping 2.63%. Emerging markets were also fragmented, as India (INDA) advanced 1.14%. However, commodity-exposed nations faced headwinds, with Indonesia (EIDO) and South Africa (EZA) declining by 3.77% and 2.74%, respectively.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Developed Markets ex-U.S.
Developed ex-U.S. (EFA) -0.20% -0.11% 9.02% 8.16% 20.13%
Australia (EWA) -0.39% -1.65% 2.70% 8.08% 10.52%
Canada (EWC) -0.66% -1.63% 6.43% 6.73% 27.30%
France (EWQ) 0.20% 1.63% 8.17% 2.04% 9.75%
Germany (EWG) -1.05% -3.62% 6.18% -2.69% -0.08%
Hong Kong (EWH) 0.14% -8.52% -4.62% 1.12% 11.48%
Japan (EWJ) -0.15% 1.63% 11.80% 15.31% 32.84%
Netherlands (EWN) -0.43% 2.14% 17.96% 19.71% 30.89%
South Korea (EWY) 2.63% 8.37% 53.21% 102.90% 177.70%
Switzerland (EWL) 1.15% 1.04% 10.41% 5.55% 16.51%
U.K. (EWU) -0.26% -2.09% 3.84% 4.83% 19.26%
Emerging Markets
Emerging Markets (EEM) 0.12% 2.59% 19.58% 23.54% 43.08%
Brazil (EWZ) -0.88% -6.04% -6.81% 7.56% 26.52%
China (MCHI) -0.73% -6.79% -6.96% -13.82% -5.69%
India (INDA) 1.14% 2.56% 6.98% -8.18% -9.43%
Indonesia (EIDO) -3.77% -8.71% -21.74% -36.09% -30.57%
Malaysia (EWM) 0.71% -5.86% -4.85% 0.61% 17.64%
Mexico (EWW) -1.26% -3.72% 3.33% 7.99% 28.91%
South Africa (EZA) -2.74% -5.67% -0.48% -7.71% 25.30%
Taiwan (EWT) -0.49% 8.14% 48.04% 64.84% 92.79%
Thailand (THD) -0.10% -2.42% 8.44% 18.70% 41.85%

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Fixed Income

Bonds rallied as Treasury yields declined amid a flight to safety and easing inflation concerns from lower oil prices. The U.S. Aggregate Bond index (AGG) posted a solid 0.49% gain for the day. Longer-duration instruments saw the largest advances, with the Long-Term Treasury ETF (SPTL) climbing 1.26%. In contrast, credit-sensitive assets like High Yield (HYG) and Bank Loans (BKLN) finished flat to slightly negative, underscoring the defensive positioning in the bond market.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Multisector
Long-Term (BLV) 0.94% 2.76% 3.07% 1.95% 5.59%
Core (AGG) 0.49% 1.10% 1.45% 0.96% 4.41%
Core Enhanced (IUSB) 0.39% 1.09% 1.61% 1.06% 4.75%
Short-Term (BSV) 0.14% 0.36% 0.68% 0.46% 3.14%
Government
Long-Term (SPTL) 1.26% 3.32% 2.66% 1.74% 4.72%
Intermediate (SPTI) 0.39% 0.76% 0.55% 0.01% 2.93%
Inflation Protected (TIP) 0.39% 0.19% 1.20% 1.13% 3.61%
Short-Term (SPTS) 0.10% 0.29% 0.60% 0.59% 3.06%
Ultrashort (BIL) 0.01% 0.29% 0.88% 1.69% 3.85%
Specialty
Mortgage Backed (MBB) 0.43% 1.07% 1.62% 1.26% 5.71%
Corporate (SPIB) 0.24% 0.71% 1.30% 0.80% 4.54%
High Yield (HYG) -0.03% 0.44% 2.40% 1.54% 5.62%
Bank Loans (BKLN) -0.10% -0.24% 0.86% -0.23% 4.01%
Preferred Stock (PFF) -0.32% -1.36% 2.16% 1.11% 6.01%
Convertible (CWB) -1.03% 1.54% 15.66% 20.85% 33.33%
International & EM
Emerging USD (EMB) 0.32% 1.90% 4.58% 2.51% 10.51%
International USD (BNDX) 0.25% 1.15% 2.12% 1.52% 2.46%
International Local (IGOV) 0.15% -1.11% -0.24% -1.66% -2.51%
Emerging Local (EMLC) -0.16% 0.66% 2.95% 0.81% 7.62%
Municipals
High Yield (HYD) 0.42% 1.82% 4.63% 2.60% 7.62%
Intermediate (MUB) 0.19% 1.48% 2.51% 1.66% 6.46%
Long-Term (MLN) 0.11% 2.52% 3.34% 2.64% 8.80%
Short-Term (SUB) -0.02% 0.37% 0.69% 0.78% 2.73%

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

Commodities

It was a broadly negative session for the commodities complex, driven by a stronger U.S. dollar and specific geopolitical developments. WTI Crude (USO) plunged 4.47% following reports of advancing peace talks between the U.S. and Iran, which eased supply concerns. Precious metals also experienced a sharp sell-off, with Silver (SLV) plummeting 7.09% and Gold (GLD) losing 3.02%. The weakness was widespread across industrial metals and agricultural products as well.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Broad Commodities (DJP) -2.06% -12.81% -6.56% 14.76% 26.05%
Agriculture
Sugar (CANE) 0.65% -6.06% -12.76% -4.66% -14.90%
Broad (DBA) -0.15% -3.63% -1.23% 4.08% 4.65%
Wheat (WEAT) -0.27% -8.92% -1.50% 11.97% -1.93%
Corn (CORN) -0.72% -9.48% -10.21% -6.26% -6.84%
Soybeans (SOYB) -0.76% -3.89% 0.10% 10.18% 9.73%
Energy
Natural Gas (UNG) 2.00% 7.22% 0.00% -4.32% -27.82%
Broad (DBE) -3.31% -19.00% -10.16% 48.87% 44.07%
Brent Crude (BNO) -4.23% -25.93% -18.03% 43.86% 39.47%
WTI Crude (USO) -4.47% -24.57% -7.20% 53.69% 45.60%
Industrial Metals
Copper (CPER) -2.71% -6.71% 8.88% 3.86% 18.31%
Broad (DBB) -2.78% -8.15% 4.48% 3.71% 28.55%
Precious Metals
Gold (GLD) -3.02% -11.58% -9.45% -7.67% 19.51%
Broad (DBP) -3.97% -14.54% -11.49% -11.03% 24.32%
Platinum (PPLT) -4.88% -18.55% -17.12% -23.67% 18.71%
Palladium (PALL) -5.46% -13.87% -17.61% -27.36% 8.70%
Silver (SLV) -7.09% -24.25% -17.74% -19.62% 58.79%

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Cryptocurrency

Digital assets faced significant selling pressure, contributing to the risk-off tone in speculative corners of the market. Bitcoin (IBIT) declined by 4.08%, while Ethereum (ETHA) fell 4.79%. This broad-based weakness extended across the asset class and was reflected in the poor performance of crypto-related equities. The continued downturn has pushed year-to-date losses for major cryptocurrencies deeper into negative territory.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Ethereum (ETHA) -4.79% -23.44% -25.36% -46.86% -35.39%
XRP (XRP) -4.22% -21.12% -23.97% -42.50%
Bitcoin (IBIT) -4.08% -21.16% -13.77% -31.78% -43.61%
Solana (SOLZ) -4.05% -22.11% -25.80% -47.55% -58.02%
Multi-Coin (NCIQ) -3.97% -21.31% -16.17% -35.03% -44.90%

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What to Watch Today

Looking ahead to Thursday, market participants will be closely watching a heavy slate of economic data releases. The main event will be the Personal Consumption Expenditures (PCE) Price Index for May, the Federal Reserve’s preferred inflation gauge, due at 8:30 AM ET. Also scheduled for that time are the final estimate for Q1 GDP, weekly Initial Jobless Claims, and Durable Goods Orders. Later in the day, attention will turn to a speech by Federal Reserve Governor Lisa D. Cook at 2:00 PM ET and a 7-Year Note auction by the U.S. Treasury.

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.