U.S. Stocks Hit Record Highs as Oil Prices Tumble

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Macro Overview

U.S. equity markets surged to new records, propelled by a significant drop in oil prices that eased inflation concerns. The S&P 500 (IVV) gained 1.77%, with international markets following suit as Developed ex-U.S. (EFA) rose 1.23%. Emerging Markets (EEM) were a standout, advancing 2.61% on the day. In contrast, Broad Commodities (DJP) fell 1.65%, while the U.S. Aggregate Bond (AGG) index gained 0.41% as Treasury yields declined.

U.S. Size & Style

The rally in U.S. equities was broad-based, with growth-oriented stocks leading the charge across all market capitalizations. Large Growth (IVW) climbed 2.38%, significantly outpacing its value counterpart’s 1.11% gain. Mid-caps and small-caps also posted strong returns, with Small Growth (IJT) adding 1.85%. This performance continues a strong trend for smaller companies, with the Small Cap (IJR) index now up over 25% year-to-date.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Large Value (IVE) 1.11% 2.38% 6.54% 11.98% 21.99%
Large Cap (IVV) 1.77% 3.52% 7.69% 13.72% 23.63%
Large Growth (IVW) 2.38% 4.52% 8.66% 15.03% 24.75%
Mid Value (IJJ) 1.38% 3.15% 8.25% 15.83% 24.16%
Mid Cap (IJH) 1.80% 1.83% 7.36% 17.96% 24.79%
Mid Growth (IJK) 2.27% 0.65% 6.58% 19.87% 25.38%
Small Value (IJS) 1.51% 3.56% 10.22% 24.06% 41.50%
Small Cap (IJR) 1.72% 2.68% 10.79% 25.73% 38.16%
Small Growth (IJT) 1.85% 1.81% 11.37% 27.24% 34.97%

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U.S. Sectors & Industries

Sector performance showed a clear divergence, driven by earnings and commodity price action. Technology (XLK) was the day’s undisputed leader, surging 4.98% following strong results from AI-related companies. Industrials (XLI) also performed well, gaining 1.77% after a positive report from Caterpillar. Conversely, Energy (XLE) and Utilities (XLU) were the only sectors in the red, falling 0.46% and 0.56% respectively, as oil prices declined sharply.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
S&P 500 (SPY) 1.80% 3.56% 7.70% 13.71% 23.56%
Technology (XLK) 4.98% 3.49% 15.47% 30.13% 43.25%
Materials (XLB) 1.94% -0.02% 3.05% 15.60% 20.50%
Industrials (XLI) 1.77% 1.35% 9.28% 20.79% 24.92%
Financials (XLF) 0.87% 4.06% 12.60% 6.59% 13.22%
Communication Services (XLC) 0.63% 2.23% -3.24% -4.27% 4.89%
Consumer Staples (XLP) 0.60% 0.45% 2.90% 11.29% 8.94%
Consumer Discretionary (XLY) 0.07% 1.00% 0.69% -0.54% 9.05%
Real Estate (XLRE) -0.02% 1.10% 3.36% 13.67% 12.19%
Health Care (XLV) -0.09% -1.00% 12.49% 5.61% 23.99%
Energy (XLE) -0.46% 9.96% -0.76% 32.67% 41.28%
Utilities (XLU) -0.56% -3.61% -4.27% 4.70% 3.83%

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Global Thematic

The day’s top-performing thematic funds were heavily concentrated in high-growth technology, mirroring the broader sector leadership. Funds focused on Photonics, Memory, and Space Technology saw gains ranging from approximately 8% to over 10%, including the Spear Alpha ETF (SPRX) which advanced 9.17%. On the other side of the ledger, themes tied to energy and digital assets lagged. Energy infrastructure funds declined in line with falling oil prices, while the CoinShares Bitcoin Mining ETF (WGMI) fell 3.65%.

Name (Ticker) 1-Day
Leaders
Tuttle Capital Pure Play Photonics ETF (FOTO) 10.47%
Tema Memory ETF (DISK) 9.27%
Spear Alpha ETF (SPRX) 9.17%
Defiance Drone and Modern Warfare ETF (JEDI) 8.64%
Roundhill Space & Technology ETF (MARS) 7.86%
Laggards
CoinShares Bitcoin Mining ETF (WGMI) -3.65%
VanEck Onchain Economy ETF (NODE) -0.98%
Alerian Energy Infrastructure ETF (ENFR) -0.59%
ALERIAN MLP INDEX ETNS DUE JANUARY 28, 2044 (AMJB) -0.56%
ETRACS Alerian MLP Infrastructure Index ETN Series B (MLPB) -0.55%

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Developed ex-U.S. & Emerging Markets

International markets participated in the global equity rally, with several countries posting exceptional gains. South Korea (EWY) was a significant outlier, climbing 6.80% and extending its remarkable year-to-date return to over 76%. In emerging markets, Taiwan (EWT) also showed notable strength with a 4.32% advance. The primary weak spot was Brazil (EWZ), which slipped 0.91% against the positive global trend.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Developed Markets ex-U.S.
Developed ex-U.S. (EFA) 1.23% 2.83% 8.25% 13.51% 25.49%
Australia (EWA) 2.45% 7.23% 5.77% 16.63% 18.23%
Canada (EWC) 0.59% 3.86% 4.13% 11.78% 30.57%
France (EWQ) 1.11% 3.51% 9.92% 8.16% 16.83%
Germany (EWG) 1.06% 3.62% 7.79% 5.20% 8.26%
Hong Kong (EWH) 0.00% 9.51% -0.65% 9.59% 16.37%
Japan (EWJ) 1.83% 1.58% 7.94% 17.80% 31.11%
Netherlands (EWN) 2.31% 2.24% 12.39% 22.28% 41.01%
South Korea (EWY) 6.80% -5.00% 4.62% 76.03% 141.99%
Switzerland (EWL) 0.92% -0.36% 7.55% 8.20% 21.70%
U.K. (EWU) 0.23% 2.50% 5.64% 11.50% 24.32%
Emerging Markets
Emerging Markets (EEM) 2.61% 0.46% 3.48% 21.24% 38.17%
Brazil (EWZ) -0.91% 4.82% -6.67% 14.68% 40.15%
China (MCHI) 0.34% 10.17% -1.47% -6.01% -0.55%
India (INDA) 0.74% 1.96% 3.91% -6.51% -3.72%
Indonesia (EIDO) 2.00% 11.09% -12.04% -30.76% -25.68%
Malaysia (EWM) 1.03% 5.30% -1.88% 5.94% 22.03%
Mexico (EWW) 0.67% 2.07% 3.35% 12.78% 34.57%
South Africa (EZA) 2.53% 3.06% 0.35% -2.10% 29.08%
Taiwan (EWT) 4.32% -2.53% 13.05% 60.88% 81.71%
Thailand (THD) 0.60% 2.47% 6.99% 25.87% 33.09%

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Fixed Income

Bond markets strengthened as Treasury yields declined amid easing inflation concerns and a flight to safety from commodities. Longer-duration bonds saw the largest price increases, with the Long-Term Treasury (SPTL) gaining 0.84%. Risk-on sentiment in equities also benefited credit-sensitive areas of the bond market, highlighted by a strong 1.98% gain for Convertible (CWB) bonds. High Yield (HYG) also posted a respectable 0.30% advance for the session.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Multisector
Long-Term (BLV) 0.76% -2.41% -0.85% -1.64% 0.27%
Core Enhanced (IUSB) 0.42% -0.51% 0.19% 0.32% 2.79%
Core (AGG) 0.41% -0.62% 0.07% 0.08% 2.41%
Short-Term (BSV) 0.19% 0.07% 0.48% 0.72% 2.63%
Government
Long-Term (SPTL) 0.84% -2.33% -1.03% -2.10% -0.79%
Intermediate (SPTI) 0.36% -0.23% 0.03% -0.25% 1.61%
Inflation Protected (TIP) 0.18% -0.46% -0.89% 0.73% 1.69%
Short-Term (SPTS) 0.07% 0.15% 0.50% 0.90% 2.73%
Ultrashort (BIL) 0.00% 0.28% 0.89% 2.10% 3.76%
Specialty
Convertible (CWB) 1.98% 1.13% 3.31% 19.19% 26.64%
Mortgage Backed (MBB) 0.62% -0.52% 0.17% 0.43% 3.83%
Preferred Stock (PFF) 0.36% 1.29% -0.34% 2.22% 3.71%
Corporate (SPIB) 0.33% -0.19% 0.47% 0.68% 3.10%
High Yield (HYG) 0.30% 0.28% 1.15% 2.12% 5.08%
Bank Loans (BKLN) 0.10% 1.03% 0.79% 0.95% 4.24%
International & EM
Emerging Local (EMLC) 0.55% 0.75% 2.64% 2.50% 8.62%
Emerging USD (EMB) 0.50% -0.59% 1.43% 1.94% 7.53%
International Local (IGOV) 0.34% 0.83% -0.60% -0.67% -0.43%
International USD (BNDX) 0.27% -0.31% 0.99% 0.89% 1.40%
Municipals
Long-Term (MLN) 0.58% -1.57% 0.20% 1.65% 7.49%
High Yield (HYD) 0.38% -2.20% -0.17% 0.87% 6.28%
Intermediate (MUB) 0.29% -1.35% -0.07% 0.60% 4.90%
Short-Term (SUB) 0.09% -0.01% 0.44% 0.90% 1.91%

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Commodities

The commodity complex was dominated by a sharp sell-off in energy markets, driven by geopolitical optimism regarding Middle East shipping lanes. WTI Crude (USO) plunged 5.19%, while Natural Gas (UNG) fell 3.36%. In stark contrast, precious and industrial metals rallied strongly, with Palladium (PALL) and Platinum (PPLT) surging 7.31% and 6.64%, respectively. Silver (SLV) also posted a solid 2.63% gain.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
Broad Commodities (DJP) -1.65% 5.30% -9.66% 22.04% 36.86%
Agriculture
Sugar (CANE) 0.71% 1.43% -3.32% 1.59% -8.88%
Broad (DBA) -0.47% 3.44% -2.23% 8.39% 11.36%
Soybeans (SOYB) -0.75% 2.50% -0.67% 14.59% 17.30%
Corn (CORN) -1.00% 5.28% -7.17% 0.11% 3.68%
Wheat (WEAT) -1.65% 6.47% -1.40% 19.48% 10.72%
Energy
Natural Gas (UNG) -3.36% -15.63% -10.78% -20.31% -24.61%
Broad (DBE) -4.28% 11.01% -15.62% 63.93% 55.57%
WTI Crude (USO) -5.19% 11.35% -21.56% 67.41% 52.12%
Brent Crude (BNO) -5.25% 14.24% -24.63% 60.03% 48.54%
Industrial Metals
Copper (CPER) 1.26% 7.64% 12.82% 14.82% 44.81%
Broad (DBB) 0.40% 5.55% 3.27% 10.24% 34.73%
Precious Metals
Palladium (PALL) 7.31% 6.94% -8.87% -15.74% 12.48%
Platinum (PPLT) 6.64% 6.93% -10.69% -15.57% 30.01%
Silver (SLV) 2.63% -2.14% -18.35% -16.42% 58.45%
Broad (DBP) 1.40% -0.84% -11.56% -8.33% 25.66%
Gold (GLD) 0.66% -1.05% -9.78% -5.59% 20.34%

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Cryptocurrency

The cryptocurrency space was notably quiet amidst the significant moves in traditional asset classes. Major digital assets posted marginal gains, with Bitcoin (IBIT) rising 0.64% and Ethereum (ETHA) adding 0.28%. This muted price action suggests investors were focused elsewhere, as the broader crypto market consolidated without a clear directional trend for the day. The Multi-Coin (NCIQ) index advanced by a modest 0.48%.

Name (Ticker) 1-Day 1 Month 3 Month YTD 1 Year
XRP (XRP) 0.08% -0.33% -22.81% -41.13%
Solana (SOLZ) 0.27% -8.34% -12.45% -41.06% -58.23%
Ethereum (ETHA) 0.28% 10.03% -20.37% -36.91% -49.01%
Multi-Coin (NCIQ) 0.48% 4.64% -19.73% -29.52% -47.45%
Bitcoin (IBIT) 0.64% 4.36% -19.85% -26.71% -44.19%

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What to Watch Today

Looking ahead to Wednesday, market participants will be closely watching the morning release of the ISM Services PMI for insights into the health of the U.S. service sector. Additionally, several Federal Reserve officials are scheduled to speak, including Governor Lisa Cook and Kansas City Fed President Jeff Schmid, whose comments on the economic outlook will be scrutinized. The earnings season also continues with reports from companies including Shopify (SHOP) and Prudential Financial (PRU).

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.