Softer Inflation Reading Propels Equities to Record Levels

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Macro Overview

U.S. equities reached new highs after a flat Producer Price Index report for July bolstered expectations for the Federal Reserve to maintain current interest rates. The S&P 500 (IVV) gained 0.68%, while international stocks saw more modest increases, with Developed ex-U.S. (EFA) up 0.18% and Emerging Markets (EEM) rising 0.33%. In contrast to the risk-on sentiment in stocks, Broad Commodities (DJP) declined sharply by 1.41%, weighed down by retreating oil prices. The U.S. Aggregate Bond market (AGG) also advanced 0.27% as Treasury yields eased on the inflation data.

U.S. Size & Style

Gains were recorded across all U.S. size and style segments, led by a strong showing in small-cap value. The Small Value (IJS) category rose 0.85%, continuing its impressive three-month run where it has gained over 11%. Large-cap growth (IVW) also outperformed the broader market with a 0.74% increase. Following recent strength, Large Value (IVE) has now reached an RSI of 70, signaling overbought conditions.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Large Value (IVE) 0.60% 3.09% 6.37% 13.09% 19.66%
Large Cap (IVV) 0.68% 3.84% 5.07% 14.70% 22.01%
Large Growth (IVW) 0.74% 4.46% 3.95% 15.85% 23.73%
Mid Value (IJJ) 0.49% 3.34% 9.01% 15.75% 19.61%
Mid Cap (IJH) 0.46% 4.23% 7.50% 19.39% 22.79%
Mid Growth (IJK) 0.40% 5.06% 6.03% 22.69% 25.61%
Small Value (IJS) 0.85% 3.75% 11.26% 24.03% 32.18%
Small Cap (IJR) 0.46% 3.26% 11.01% 25.15% 29.86%
Small Growth (IJT) 0.06% 2.80% 10.69% 26.04% 27.28%

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U.S. Sectors & Industries

Nine of the eleven S&P 500 sectors finished in positive territory, with Communication Services (XLC) leading the advance with a significant 2.07% gain. Technology (XLK) also posted a strong performance, rising 1.01% and contributing to the market’s record-setting day. Defensive sectors such as Real Estate (XLRE) and Consumer Staples (XLP) also saw gains of 1.42% and 1.08%, respectively. Materials (XLB) was the notable laggard, declining 0.51%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
S&P 500 (SPY) 0.70% 3.83% 5.06% 14.68% 21.96%
Communication Services (XLC) 2.07% 0.86% -3.35% -3.83% 2.57%
Real Estate (XLRE) 1.42% 0.94% 2.94% 13.54% 12.85%
Consumer Staples (XLP) 1.08% 1.67% 2.22% 12.11% 6.98%
Technology (XLK) 1.01% 5.24% 8.00% 32.83% 42.94%
Financials (XLF) 0.59% 3.91% 14.66% 7.29% 12.13%
Consumer Discretionary (XLY) 0.48% 2.08% -0.02% -0.41% 3.87%
Utilities (XLU) 0.46% -3.67% -0.78% 4.54% 4.68%
Energy (XLE) 0.05% 7.61% 6.71% 38.43% 47.00%
Health Care (XLV) -0.04% 4.32% 15.27% 9.70% 28.52%
Industrials (XLI) -0.05% 3.00% 7.27% 20.40% 23.40%
Materials (XLB) -0.51% 3.42% 0.86% 16.29% 17.07%

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Global Thematic

Thematic performance was clearly divided between technology and commodities. Cloud computing and cybersecurity funds dominated the leaderboard, with the WisdomTree Cloud Computing Fund (WCLD) surging 5.65%. This strength in software and digital infrastructure themes was widespread among the day’s top performers. Conversely, commodity-centric strategies faced significant headwinds, as seen in the 4.00% drop for the CoinShares Bitcoin Mining ETF (WGMI) and losses exceeding 3% for copper and nickel miner ETFs.

Name (Ticker) 1-Day
Leaders
WisdomTree Cloud Computing Fund (WCLD) 5.65%
Tema Memory ETF (DISK) 5.02%
Global X Cloud Computing ETF (CLOU) 4.83%
WisdomTree Cybersecurity Fund (WCBR) 4.83%
Fidelity Cloud Computing ETF (FCLD) 4.82%
Laggards
CoinShares Bitcoin Mining ETF (WGMI) -4.00%
Tuttle Capital Pure Play Photonics ETF (FOTO) -3.79%
Sprott Copper Miners ETF (COPP) -3.57%
Sprott Nickel Miners ETF (NIKL) -3.26%
Global X Copper Miners ETF (COPX) -3.15%

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Developed ex-U.S. & Emerging Markets

International equity performance was mixed, with specific country indices showing notable divergence. Among developed nations, South Korea (EWY) was a clear outperformer, climbing 1.56%, while Japan (EWJ) also posted a solid 0.70% gain. In emerging markets, Taiwan (EWT) advanced 1.24%, continuing its strong year-to-date performance. However, several key emerging economies lagged, including China (MCHI) which fell 1.20%, and Indonesia (EIDO) which declined 1.65%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Developed Markets ex-U.S.
Developed ex-U.S. (EFA) 0.18% 5.28% 6.33% 14.96% 22.66%
Australia (EWA) -0.50% 4.90% 3.57% 15.16% 14.01%
Canada (EWC) 0.53% 5.74% 8.05% 15.69% 32.14%
France (EWQ) -0.29% 5.67% 7.43% 7.79% 12.54%
Germany (EWG) 0.21% 6.62% 6.34% 5.49% 5.79%
Hong Kong (EWH) 0.22% 5.63% -6.88% 7.58% 9.47%
Japan (EWJ) 0.70% 6.20% 6.34% 22.61% 29.61%
Netherlands (EWN) 1.03% 6.32% 10.22% 26.28% 40.14%
South Korea (EWY) 1.56% 6.31% -5.31% 83.73% 144.49%
Switzerland (EWL) 0.08% 2.05% 4.96% 8.12% 19.61%
U.K. (EWU) -0.23% 4.10% 4.38% 11.31% 20.66%
Emerging Markets
Emerging Markets (EEM) 0.33% 3.38% -0.29% 22.49% 34.62%
Brazil (EWZ) -0.27% -4.58% -7.31% 7.31% 25.33%
China (MCHI) -1.20% 3.60% -8.38% -8.81% -8.43%
India (INDA) 0.06% 2.44% 4.17% -7.53% -5.18%
Indonesia (EIDO) -1.65% 4.17% -11.16% -32.07% -31.88%
Malaysia (EWM) -0.42% 2.40% -4.87% 5.04% 15.54%
Mexico (EWW) -1.32% 1.75% -4.63% 10.42% 25.89%
South Africa (EZA) -1.46% 7.28% -2.85% -0.06% 24.29%
Taiwan (EWT) 1.24% 5.52% 13.32% 69.21% 84.26%
Thailand (THD) -0.20% 1.02% 3.62% 25.32% 28.56%

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Fixed Income

The fixed income market rallied in response to the softer-than-expected wholesale inflation figures, which pushed Treasury yields lower. The core U.S. Aggregate Bond (AGG) index gained 0.27%, with longer-duration government bonds like the Long-Term Treasury (SPTL) rising 0.60%. Credit-sensitive assets also benefited from the improved sentiment, with High Yield (HYG) adding 0.23% and Convertible bonds (CWB) climbing 0.47%. The across-the-board gains reflect heightened expectations that the Federal Reserve will pause its rate-hiking cycle.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Multisector
Long-Term (BLV) 0.56% -0.76% -1.31% -1.95% -0.19%
Core Enhanced (IUSB) 0.31% 0.38% 0.18% 0.39% 2.65%
Core (AGG) 0.27% 0.33% 0.02% 0.11% 2.29%
Short-Term (BSV) 0.15% 0.63% 0.63% 0.91% 2.70%
Government
Long-Term (SPTL) 0.60% -0.89% -1.04% -2.29% -0.65%
Intermediate (SPTI) 0.28% 0.55% 0.21% -0.11% 1.72%
Inflation Protected (TIP) 0.22% 0.03% -0.77% 0.83% 1.72%
Short-Term (SPTS) 0.14% 0.60% 0.71% 1.14% 2.87%
Ultrashort (BIL) 0.00% 0.31% 0.91% 2.20% 3.76%
Specialty
Convertible (CWB) 0.47% 2.65% 0.77% 20.37% 26.26%
Preferred Stock (PFF) 0.39% 2.25% -0.84% 2.75% 3.45%
Mortgage Backed (MBB) 0.32% 0.62% 0.16% 0.64% 3.85%
Corporate (SPIB) 0.24% 0.56% 0.41% 0.75% 2.95%
High Yield (HYG) 0.23% 0.83% 1.31% 2.42% 4.93%
Bank Loans (BKLN) 0.15% 1.17% 1.14% 1.54% 4.60%
International & EM
Emerging USD (EMB) 0.44% 0.42% 1.09% 2.09% 6.59%
International Local (IGOV) 0.24% 1.74% -1.08% -0.89% -1.61%
Emerging Local (EMLC) 0.23% 1.54% 2.19% 3.02% 7.66%
International USD (BNDX) 0.19% 0.29% 0.74% 0.77% 1.33%
Municipals
High Yield (HYD) 0.38% -0.62% 0.58% 1.66% 7.19%
Intermediate (MUB) 0.17% -0.42% 0.35% 0.98% 5.17%
Long-Term (MLN) 0.11% -0.25% 0.98% 2.38% 8.30%
Short-Term (SUB) 0.02% 0.28% 0.71% 1.15% 2.03%

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

Commodities

The commodities complex experienced a broad sell-off, led by significant declines in energy and precious metals. WTI Crude (USO) and Brent Crude (BNO) fell 1.78% and 1.93% respectively, contributing to the negative tone. Precious metals also faced heavy selling pressure, with Palladium (PALL) plunging 4.06% and Gold (GLD) dropping 1.47%. A rare exception to the downturn was Sugar (CANE), which managed a 1.40% gain against the trend.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Broad Commodities (DJP) -1.41% 4.60% -6.10% 28.08% 43.79%
Agriculture
Sugar (CANE) 1.40% 11.18% 5.45% 11.12% -3.50%
Soybeans (SOYB) -0.16% -0.51% -0.63% 15.28% 14.18%
Wheat (WEAT) -0.16% 2.79% -4.14% 21.78% 14.72%
Broad (DBA) -0.79% -0.36% -3.86% 8.23% 6.36%
Corn (CORN) -1.59% 2.05% -5.64% 1.02% 6.61%
Energy
Broad (DBE) -1.11% 7.57% -3.91% 78.64% 75.13%
WTI Crude (USO) -1.78% 6.15% -11.98% 80.78% 72.55%
Brent Crude (BNO) -1.93% 8.13% -10.94% 75.64% 69.82%
Natural Gas (UNG) -2.25% -3.86% -9.20% -18.68% -19.60%
Industrial Metals
Copper (CPER) -0.42% 5.03% -1.04% 13.99% 42.58%
Broad (DBB) -0.78% 3.35% -3.66% 10.29% 32.85%
Precious Metals
Gold (GLD) -1.47% 8.67% -7.33% 0.67% 29.03%
Broad (DBP) -1.52% 9.08% -12.50% -2.53% 33.36%
Silver (SLV) -1.52% 11.50% -26.70% -9.72% 66.17%
Platinum (PPLT) -2.51% 7.02% -20.51% -16.64% 27.21%
Palladium (PALL) -4.06% 4.88% -12.85% -18.01% 15.11%

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Cryptocurrency

Digital assets were largely unchanged, exhibiting a muted reaction to the positive sentiment seen in traditional equity markets. Bitcoin (IBIT) ended the day nearly flat with a 0.03% loss, while Ethereum (ETHA) posted a modest 0.49% gain. The narrow trading range for most major crypto assets suggests a period of consolidation continues for the sector. Over the last three months, both Bitcoin and Ethereum-tracking funds remain down by more than 16%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Bitcoin (IBIT) -0.03% 1.87% -20.48% -27.73% -48.63%
Multi-Coin (NCIQ) 0.05% 2.06% -20.44% -30.48% -52.99%
XRP (XRP) 0.36% -5.36% -28.90% -44.98%
Solana (SOLZ) 0.47% 1.33% -16.56% -39.50% -64.93%
Ethereum (ETHA) 0.49% 6.43% -16.39% -36.56% -60.36%

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What to Watch Today

Looking ahead to Friday, market participants will be closely watching the release of the July Retail Sales report at 8:30 AM ET. This key economic indicator will provide the latest insight into the strength of consumer spending, a critical component of the U.S. economy. There are no Federal Reserve officials scheduled to deliver public remarks, leaving the economic data as the primary focus for the final trading session of the week.

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.