Small Caps Lead on a Mixed Day Ahead of Fed Decision

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Macro Overview

U.S. equity markets traded in a narrow range on Tuesday, closing mixed as investors remained in a holding pattern ahead of today’s pivotal Federal Reserve decision. The Large Cap (IVV) benchmark slipped -0.08%, while small caps managed to buck the trend, with the Small Cap (IJR) index gaining +0.46%. Volatility ticked higher and Treasury yields rose slightly, reflecting caution as Wall Street braces for updated economic projections and Chair Powell’s commentary on the rate path for 2026.

U.S. Size & Style

Performance diverged significantly by market capitalization, with small caps outperforming their larger counterparts. Small Value (IJS) led the pack, rising +0.51%, followed closely by Small Cap (IJR) at +0.46%. In contrast, large and mid-cap styles struggled to find traction, with Large Growth (IVW) finishing flat at -0.03% and Mid Growth (IJK) lagging at -0.14%.

Name (Ticker) 1-Day % Change WTD 1 Month 3 Month YTD 1 Year
Small Value (IJS) +0.51% +0.16% +3.66% +4.65% +6.69% +0.26%
Small Cap (IJR) +0.46% +0.05% +3.17% +3.59% +6.72% -0.19%
Small Growth (IJT) +0.37% +0.00% +2.60% +2.49% +6.68% -0.85%
Large Growth (IVW) -0.03% -0.37% +2.06% +6.00% +22.59% +20.54%
Mid Value (IJJ) -0.04% -0.47% +2.59% +1.21% +6.69% +1.22%
Mid Cap (IJH) -0.06% -0.56% +1.91% +1.43% +7.17% +1.04%
Large Cap (IVV) -0.08% -0.38% +1.80% +5.35% +17.70% +14.42%
Large Value (IVE) -0.10% -0.41% +1.54% +4.49% +11.97% +7.00%
Mid Growth (IJK) -0.14% -0.68% +1.14% +1.44% +7.26% +0.50%

U.S. Sectors & Industries

Only five of the eleven GICS sectors posted gains, led by Energy (XLE) at +0.62%, buoyed by strength in oil and gas equipment sub-sectors despite weakness in crude prices. Technology (XLK) added +0.26%, while defensive sectors like Utilities and Staples also saw mild buying. On the downside, Health Care (XLV) was the clear laggard, dropping -0.97% as biotechnology stocks faced significant selling pressure.

Sector (Ticker) 1-Day % Change WTD 1 Month 3 Month YTD 1 Year
Energy (XLE) +0.62% -0.48% +2.08% +5.25% +9.35% +3.94%
Technology (XLK) +0.26% +0.97% +2.73% +11.71% +27.91% +24.50%
Consumer Staples (XLP) +0.23% -0.60% +1.67% -2.72% +1.11% -2.63%
Communication Services (XLC) +0.11% -0.63% +3.82% +1.15% +21.29% +19.18%
Utilities (XLU) +0.07% -1.27% -4.67% +3.46% +15.31% +11.83%
Consumer Discretionary (XLY) -0.01% -1.46% +0.04% +0.29% +5.86% +2.54%
Materials (XLB) -0.21% -1.59% +1.12% -3.70% +4.64% -3.69%
Financial (XLF) -0.37% -0.75% +0.95% +0.22% +11.38% +8.74%
Real Estate (XLRE) -0.59% -1.20% -1.87% -2.56% +1.87% -4.53%
Industrials (XLI) -0.73% -0.85% -0.05% +2.42% +17.50% +11.67%
Health Care (XLV) -0.97% -2.15% +2.61% +8.70% +10.45% +5.48%

Global Thematic

Thematic performance was heavily skewed towards precious metals and digital assets. Silver miners dominated the leaderboard, with Sprott Silver Miners (SLVR) surging +5.86%. Blockchain and crypto-related funds also posted strong gains. Conversely, healthcare innovation and clean water themes faced headwinds, occupying the bottom of the performance table.

Developed Markets ex-U.S.

International developed markets were largely subdued. South Korea was the top performer, with South Korea (EWY) rising +0.53%, while European markets showed mixed results. Germany (EWG) gained +0.46%, but France (EWQ) remained under pressure, falling -0.99%.

Country (Ticker) 1-Day % Change WTD 1 Month 3 Month YTD 1 Year
South Korea (EWY) +0.53% +1.35% +4.11% +27.56% +87.80% +82.38%
Germany (EWG) +0.46% +0.29% +2.59% +0.12% +32.67% +27.16%
Australia (EWA) +0.42% +0.04% -0.34% -2.01% +12.12% +4.54%
Canada (EWC) +0.23% -0.41% +5.93% +7.71% +32.57% +26.80%
Japan (EWJ) +0.14% -0.47% +0.02% +4.06% +25.16% +21.06%
Switzerland (EWL) -0.12% -0.59% +3.50% +2.98% +27.91% +22.25%
Dev ex-U.S. (EFA) -0.14% -0.45% +1.15% +3.23% +28.32% +22.89%
Netherlands (EWN) -0.29% +0.00% +1.40% +8.19% +33.36% +28.43%
U.K. (EWU) -0.46% -0.79% +0.02% +2.71% +29.08% +23.86%
Hong Kong (EWH) -0.60% -1.63% -2.65% +0.60% +32.97% +23.82%
France (EWQ) -0.99% -0.92% +0.98% +2.67% +26.00% +22.14%

Emerging Markets

Emerging markets were also mixed. Thailand (THD) and Mexico (EWW) posted solid gains of over +0.90%. However, broad weakness in Asian giants weighed on the index, with China (MCHI) slipping -1.40% and Indonesia (EIDO) falling -1.01%.

Country (Ticker) 1-Day % Change WTD 1 Month 3 Month YTD 1 Year
Thailand (THD) +0.94% -0.17% -0.35% -0.38% +1.68% -4.09%
Mexico (EWW) +0.92% +0.86% +2.14% +7.80% +50.63% +38.61%
South Africa (EZA) +0.78% -1.43% +4.16% +13.35% +61.54% +44.85%
India (INDA) +0.36% -1.30% -0.89% +1.06% +1.20% -3.40%
Taiwan (EWT) +0.23% +0.57% +1.72% +6.65% +26.97% +23.60%
Malaysia (EWM) +0.19% -1.01% +0.53% +4.77% +9.78% +10.09%
Brazil (EWZ) -0.03% +0.65% +1.36% +10.83% +48.09% +36.52%
Emerging (EEM) -0.16% -0.38% -0.04% +6.52% +31.64% +25.10%
Indonesia (EIDO) -1.01% -0.74% +0.81% +9.50% +3.80% -5.79%
China (MCHI) -1.40% -2.09% -3.55% -2.57% +32.20% +22.51%

Fixed Income

Fixed income markets were mostly lower as yields ticked up ahead of the Fed. International USD (BNDX) was a rare bright spot, managing a +0.08% gain. Meanwhile, credit-sensitive sectors struggled, with Corporate (SPIB) and Taxable Multisector (PYLD) both retreating -0.15%.

Category (Ticker) 1 Day WTD 1 Month 3 Month YTD 1 Year
International USD (BNDX) +0.08% -0.16% -0.56% +0.28% +2.76% +1.73%
Convertible (CWB) +0.07% +0.17% -0.97% +4.17% +18.48% +13.75%
Bank Loans (BKLN) +0.05% +0.14% +0.86% +1.90% +6.30% +6.55%
Government Long (SPTL) +0.04% -0.26% -1.19% -0.23% +5.39% -0.37%
Taxable Ultrashort (BIL) +0.02% +0.03% +0.33% +0.98% +3.93% +4.21%
Municipal Short (SUB) 0.00% +0.08% +0.32% +0.06% +3.25% +3.19%
Preferred Stock (PFF) -0.02% -0.02% +0.10% -1.32% +4.33% +1.61%
Municipal Long (MLN) -0.03% +0.06% -0.32% +2.92% +1.37% -0.21%
Taxable Long Term (BLV) -0.03% -0.29% -0.64% -0.04% +6.61% +1.16%
Government Short (SPTS) -0.03% -0.10% +0.14% +0.73% +4.52% +4.70%
Municipal High Yield (HYD) -0.04% -0.03% +0.44% +2.00% +1.97% +0.88%
Municipal Intermediate (MUB) -0.06% -0.11% -0.13% +1.87% +3.19% +1.70%
Emerging (EMLC) -0.08% -0.27% +0.81% +2.35% +16.93% +14.04%
Emerging USD (EMB) -0.08% -0.50% +0.21% +2.51% +12.90% +9.82%
Mortgage Backed (MBS) -0.08% -0.34% -0.25% +0.78% +7.55% +5.64%
Taxable Core Enhanced (IUSB) -0.09% -0.24% -0.14% +0.62% +6.93% +5.08%
Taxable Short-Term (BSV) -0.09% -0.14% +0.13% +0.65% +5.45% +5.21%
Taxable Core (AGG) -0.09% -0.25% -0.09% +0.52% +6.73% +4.76%
Government Intermediate (SPTI) -0.10% -0.28% -0.14% +0.31% +6.97% +5.57%
Taxable High Yield (HYG) -0.11% -0.36% +0.63% +1.05% +7.86% +6.86%
Inflation Protected (TIP) -0.13% -0.33% -0.44% -0.45% +6.61% +4.73%
International (IGOV) -0.14% -0.52% -0.74% -1.85% +8.85% +4.95%
Corporate (SPIB) -0.15% -0.24% +0.25% +0.72% +7.32% +6.22%
Taxable Multisector (PYLD) -0.15% -0.30% +0.30% +1.31% +8.69% +7.86%

Commodities

Commodities saw sharp divergence. Precious metals were the standout performers, with Silver (SLV) rallying +4.67% and Platinum (PPLT) up +3.10%. On the other end of the spectrum, energy commodities collapsed, led by a massive drop in Natural Gas (UNG) of -6.44%.

Commodity (Ticker) 1-Day % Change WTD 1 Month 3 Month YTD 1 Year
Silver (SLV) +4.67% +4.19% +25.61% +48.39% +109.53% +90.37%
Platinum (PPLT) +3.10% +3.27% +9.90% +23.67% +86.14% +79.94%
Palladium (PALL) +2.59% +3.30% +8.62% +32.25% +64.50% +54.42%
Precious Metals (DBP) +1.59% +1.07% +8.73% +20.78% +64.61% +61.41%
Corn (CORN) +0.63% +0.56% +1.04% +2.10% -4.37% -1.59%
Gold (GLD) +0.51% +0.25% +5.18% +15.97% +60.00% +57.89%
Agriculture (DBA) 0.00% -0.45% +0.76% -2.58% -0.71% +0.45%
Wheat (WEAT) -0.15% -0.24% -1.43% -0.72% -14.32% -15.20%
Gasoline (UGA) -0.15% -2.21% -4.02% +0.34% +2.75% +5.87%
Soybeans (SOYB) -0.61% -1.30% -1.81% +3.22% +5.82% +7.73%
Broad Commodities (DJP) -0.66% -2.41% +2.52% +8.26% +16.86% +17.80%
Brent Crude Oil (BNO) -0.69% -2.68% -1.65% -4.15% -4.37% -0.66%
WTI Crude Oil (USO) -0.89% -2.86% -1.96% -4.81% -7.53% -1.84%
Energy (DBE) -0.98% -3.41% -2.78% -1.39% +0.75% +5.62%
Sugar (CANE) -1.20% -0.70% +3.99% -10.41% -16.84% -24.33%
Copper (CPER) -1.77% -2.10% +6.46% +16.07% +29.77% +22.79%
Industrial Metals (DBB) -1.78% -1.65% +2.13% +10.63% +17.03% +13.54%
Natural Gas (UNG) -6.44% -13.87% +1.08% +6.33% -16.12% +2.40%

Cryptocurrency

Digital assets posted a strong recovery, with major tokens seeing significant inflows. Ethereum (ETHA) led the charge, jumping over +6.11%, while Bitcoin (IBIT) added +2.58%.

Asset (Ticker) 1-Day % Change WTD 1 Month 3 Month
XRP (XRP) +1.37% +4.54%
Bitcoin (IBIT) +2.58% +4.26% -10.24% -16.40%
Multi-Coin (NCIQ) +3.10% +5.12% -9.79% -19.14%
Solana (SOLZ) +4.71% +5.71% -14.87% -37.59%
Ethereum (ETHA) +6.11% +10.15% -3.89% -22.49%

What to Watch Today

Investors brace for a pivotal Fed decision that could set the tone for the remainder of the year. The main event arrives this afternoon with the Federal Reserve’s final interest rate decision of the year. While a rate cut is widely anticipated, the spotlight will be on the updated “dot plot” and Chair Powell’s press conference, as traders seek clarity on the central bank’s policy outlook for 2026.

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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.