Surging Oil Prices Fuel Commodity Rally, Pressure Equities and Bonds

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Macro Overview

Global markets diverged as a sharp spike in energy prices rattled investor sentiment. U.S. equities, represented by the S&P 500 (IVV), finished the day flat, while both Developed ex-U.S. (EFA) and Emerging Markets (EEM) posted losses of 0.50% and 0.72%, respectively. The standout performer was the commodities complex, with the Broad Commodities index (DJP) climbing 3.13% on geopolitical tensions. Concurrently, rising inflation fears pushed Treasury yields higher, causing the U.S. Aggregate Bond (AGG) to decline by 0.37%.

U.S. Size & Style

A defensive posture was evident across U.S. size and style segments, with investors favoring value over growth. Large Cap Value (IVE) was the only category to end in positive territory, gaining 0.23%. In contrast, growth-oriented segments like Large Cap Growth (IVW) slipped 0.25%. Small caps broadly underperformed their larger counterparts, with Small Cap Value (IJS) falling 0.75% as concerns over rising rates weighed on smaller companies.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Large Value (IVE) 0.23% 2.53% 5.80% 12.29% 20.87%
Large Cap (IVV) 0.00% 2.46% 5.10% 14.00% 22.76%
Large Growth (IVW) -0.25% 2.28% 4.49% 15.20% 24.04%
Mid Value (IJJ) -0.38% 2.31% 6.08% 14.66% 23.15%
Mid Cap (IJH) -0.32% 2.47% 5.06% 18.05% 25.63%
Mid Growth (IJK) -0.27% 2.59% 3.97% 21.09% 27.70%
Small Value (IJS) -0.75% 2.34% 6.88% 22.18% 37.83%
Small Cap (IJR) -0.58% 1.72% 7.34% 23.76% 35.27%
Small Growth (IJT) -0.54% 0.99% 7.73% 25.07% 32.53%

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U.S. Sectors & Industries

The Energy sector (XLE) was the undisputed leader, surging 4.66% as geopolitical uncertainty in the Middle East drove crude oil prices sharply higher. Conversely, interest-rate-sensitive sectors bore the brunt of the day’s selling pressure amid rising Treasury yields. Utilities (XLU) and Real Estate (XLRE) were the worst performers, declining 1.10% and 1.29%, respectively. Technology (XLK) also faced headwinds, finishing down 0.88%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
S&P 500 (SPY) -0.03% 2.39% 5.07% 13.96% 22.66%
Energy (XLE) 4.66% 9.26% 8.81% 36.43% 46.10%
Health Care (XLV) 1.67% 4.73% 17.90% 9.74% 31.66%
Materials (XLB) 0.61% 4.50% 3.47% 18.22% 22.56%
Communication Services (XLC) 0.52% 0.17% -4.12% -4.45% 5.21%
Financials (XLF) 0.36% 3.77% 13.22% 6.46% 13.21%
Consumer Discretionary (XLY) -0.16% 2.07% -0.24% 0.62% 7.78%
Consumer Staples (XLP) -0.20% 0.99% 1.62% 10.74% 5.86%
Industrials (XLI) -0.31% 1.47% 6.84% 19.63% 23.95%
Technology (XLK) -0.88% 0.29% 6.28% 29.73% 40.86%
Utilities (XLU) -1.10% -5.02% -2.94% 2.38% 2.87%
Real Estate (XLRE) -1.29% -0.11% 0.84% 11.73% 11.32%

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Global Thematic

Thematic performance was mixed, with cybersecurity funds showing notable strength. The WisdomTree Cybersecurity Fund (WCBR) and the Amplify Cybersecurity ETF (HACK) gained 4.19% and 3.27%, respectively. On the other end of the spectrum, cryptocurrency-related and speculative technology themes struggled in the risk-off environment. The CoinShares Bitcoin Mining ETF (WGMI) and the Global X Blockchain ETF (BKCH) fell 5.95% and 4.45%, respectively.

Name (Ticker) 1-Day
Leaders
WisdomTree Cybersecurity Fund (WCBR) 4.19%
Sprott Silver Miners & Physical Silver ETF Silver Miners ETF (SLVR) 3.52%
Amplify Cybersecurity ETF (HACK) 3.27%
Sprott Rare Earths Ex-China ETF (REXC) 3.21%
Global X Cybersecurity ETF (BUG) 3.17%
Laggards
Tuttle Capital Pure Play Photonics ETF (FOTO) -7.23%
CoinShares Bitcoin Mining ETF (WGMI) -5.95%
Global X Blockchain ETF (BKCH) -4.45%
Schwab Crypto Thematic Natural Language Processing ETF (STCE) -4.35%
Spear Alpha ETF (SPRX) -4.10%

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Developed ex-U.S. & Emerging Markets

International equities broadly retreated, with developed markets outside the U.S. (EFA) falling 0.50%. South Korea (EWY) was a notable laggard, dropping 1.79%, while energy-rich Canada (EWC) managed a 0.33% gain against the trend. Emerging markets (EEM) also declined, though China (MCHI) proved to be a bright spot, rising 0.64%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Developed Markets ex-U.S.
Developed ex-U.S. (EFA) -0.50% 3.53% 5.53% 14.24% 23.61%
Australia (EWA) -1.18% 5.62% 3.17% 16.36% 16.41%
Canada (EWC) 0.33% 4.86% 6.37% 14.57% 31.69%
France (EWQ) -0.31% 6.02% 6.83% 8.66% 15.12%
Germany (EWG) -0.34% 5.74% 4.90% 5.28% 5.67%
Hong Kong (EWH) 0.40% 6.05% -4.59% 9.01% 13.62%
Japan (EWJ) -0.88% 1.59% 4.71% 19.60% 28.60%
Netherlands (EWN) -0.69% 0.91% 5.65% 21.68% 37.19%
South Korea (EWY) -1.79% -11.12% -14.24% 67.78% 126.98%
Switzerland (EWL) -0.22% 2.27% 5.98% 9.24% 22.20%
U.K. (EWU) -0.31% 4.06% 5.33% 11.84% 23.72%
Emerging Markets
Emerging Markets (EEM) -0.72% -2.59% -3.59% 19.72% 34.39%
Brazil (EWZ) -0.42% -2.06% -9.19% 11.82% 32.33%
China (MCHI) 0.64% 7.15% -1.74% -4.60% -0.31%
India (INDA) -0.45% 1.70% 0.60% -7.23% -3.80%
Indonesia (EIDO) -1.24% 7.59% -12.84% -30.60% -26.50%
Malaysia (EWM) -0.50% 2.22% -5.58% 4.60% 18.61%
Mexico (EWW) -0.76% 2.77% -2.27% 12.59% 29.09%
South Africa (EZA) 0.11% 9.26% -0.69% 3.50% 33.07%
Taiwan (EWT) -0.88% -3.78% 6.32% 60.84% 77.29%
Thailand (THD) 0.10% 1.64% 5.11% 26.40% 31.61%

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Fixed Income

Fixed income markets sold off as a surge in oil prices and hawkish commentary from a Fed official fueled inflation concerns and pushed Treasury yields higher. The benchmark U.S. Aggregate Bond (AGG) fell 0.37%. Longer-duration bonds were hit hardest by the rise in rates, with the Long-Term Treasury (SPTL) and the Long-Term Corporate Bond (BLV) declining by 0.79% and 0.80%, respectively. High Yield (HYG) showed relative resilience, dipping just 0.16%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Multisector
Short-Term (BSV) -0.13% 0.16% 0.14% 0.61% 2.66%
Core Enhanced (IUSB) -0.35% -0.42% -0.78% -0.07% 2.62%
Core (AGG) -0.37% -0.51% -0.95% -0.35% 2.26%
Long-Term (BLV) -0.80% -2.04% -3.10% -2.63% -0.21%
Government
Ultrashort (BIL) 0.00% 0.28% 0.91% 2.16% 3.76%
Short-Term (SPTS) -0.07% 0.25% 0.36% 0.90% 2.80%
Inflation Protected (TIP) -0.21% -0.45% -1.29% 0.55% 1.64%
Intermediate (SPTI) -0.28% -0.20% -0.71% -0.57% 1.57%
Long-Term (SPTL) -0.79% -2.13% -3.14% -3.03% -0.95%
Specialty
Bank Loans (BKLN) 0.00% 0.83% 0.79% 1.20% 4.34%
High Yield (HYG) -0.16% 0.19% 0.63% 2.03% 5.03%
Preferred Stock (PFF) -0.23% 0.56% -2.30% 1.69% 3.47%
Convertible (CWB) -0.24% -1.35% -0.59% 17.22% 24.66%
Corporate (SPIB) -0.27% -0.07% -0.25% 0.38% 3.00%
Mortgage Backed (MBB) -0.38% -0.49% -1.04% 0.03% 3.64%
International & EM
International USD (BNDX) -0.33% -0.36% -0.02% 0.52% 1.24%
Emerging Local (EMLC) -0.39% 0.79% 1.28% 2.90% 8.13%
Emerging USD (EMB) -0.42% -0.77% -0.10% 1.54% 6.87%
International Local (IGOV) -0.63% 0.86% -2.56% -1.13% -1.27%
Municipals
Short-Term (SUB) 0.02% 0.18% 0.56% 1.10% 2.07%
Long-Term (MLN) -0.03% -0.67% 0.32% 2.12% 8.25%
High Yield (HYD) -0.06% -1.22% -0.28% 1.25% 7.09%
Intermediate (MUB) -0.08% -0.82% -0.28% 0.68% 5.06%

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Commodities

Commodities delivered a powerful performance, driven by a significant rally in the energy markets. Geopolitical tensions surrounding the Strait of Hormuz sent WTI Crude (USO) and Brent Crude (BNO) soaring by 6.73% and 6.78%, respectively. This strength extended to precious metals, where Silver (SLV) jumped 3.32% and Gold (GLD) added 1.02%. The broad-based gains lifted the overall Broad Commodities index (DJP) by 3.13%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Broad Commodities (DJP) 3.13% 7.52% -1.72% 28.93% 44.40%
Agriculture
Broad (DBA) 0.72% 0.18% -0.54% 9.01% 9.95%
Soybeans (SOYB) 0.50% 0.00% 0.68% 15.14% 19.46%
Sugar (CANE) 0.47% 9.07% 8.52% 9.69% -1.92%
Wheat (WEAT) 0.42% 1.22% 2.56% 20.23% 11.67%
Corn (CORN) 0.00% 0.92% -5.21% -0.51% 3.52%
Energy
Brent Crude (BNO) 6.78% 18.88% -5.65% 76.94% 69.58%
WTI Crude (USO) 6.73% 15.84% -5.74% 82.07% 71.79%
Broad (DBE) 5.91% 14.85% 0.19% 78.47% 73.46%
Natural Gas (UNG) 4.11% -4.34% -4.07% -17.29% -23.18%
Industrial Metals
Broad (DBB) 1.18% 4.99% 1.38% 11.90% 34.59%
Copper (CPER) 0.70% 5.76% 4.99% 14.93% 44.69%
Precious Metals
Silver (SLV) 3.32% 10.12% -18.63% -7.78% 70.33%
Broad (DBP) 1.45% 7.39% -10.02% -1.32% 33.52%
Gold (GLD) 1.02% 6.77% -7.20% 1.57% 28.59%
Platinum (PPLT) 0.38% 7.72% -14.47% -14.66% 31.35%
Palladium (PALL) 0.24% 8.84% -6.80% -13.64% 22.55%

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Cryptocurrency

The digital assets space faced selling pressure amid a broader risk-off tone in the market. The two largest cryptocurrencies by market cap saw declines, with Bitcoin (IBIT) falling 1.55% and Ethereum (ETHA) dropping 2.28%. This move mirrored the weakness seen in technology and other growth-oriented assets. Bucking the negative trend, Solana (SOLZ) managed to post a 3.11% gain.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Ethereum (ETHA) -2.28% 4.51% -19.11% -36.96% -54.08%
Bitcoin (IBIT) -1.55% 0.00% -20.29% -27.03% -45.21%
Multi-Coin (NCIQ) -1.14% 0.40% -20.31% -29.79% -49.05%
XRP (XRP) -0.18% -7.62% -28.21% -44.44%
Solana (SOLZ) 3.11% -2.00% -17.88% -39.39% -60.15%

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What to Watch Today

Looking ahead to Tuesday, market participants will be watching several key economic releases for further insight into the state of the U.S. economy. The morning’s data includes the NFIB Small Business Optimism Index at 6:00 AM ET, followed by Existing Home Sales at 10:00 AM ET. Additionally, the U.S. Treasury Department is scheduled to auction $58 billion in 3-year notes in the afternoon, which will be monitored for demand in the current rising-yield environment.

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.