Daily Review & Preview: September 4, 2025
Macro Overview
U.S. markets delivered a mixed performance on Wednesday as a rebound in technology stocks helped lift broader indexes, while investors digested fresh signs of a cooling labor market. The S&P 500, as tracked by IVV, gained 0.54%, driven by a strong showing in growth-oriented sectors. The Communication Services sector (XLC) was the standout performer, surging 1.67% on the day, largely due to a significant rally in Alphabet shares following a favorable court ruling. In contrast, the Energy sector (XLE) faced significant headwinds, dropping -2.24% amid falling crude oil prices. The mixed sentiment came after weaker-than-expected job openings data eased pressure from the bond market, fueling speculation that the Federal Reserve may have more room to consider interest rate cuts later this year.
U.S. Size & Style
The divide between growth and value was evident in Wednesday’s trading. Large-Cap Growth (IVW) led the way with a 1.04% advance, while Large-Cap Value (IVE) finished nearly flat, down -0.04%. Smaller capitalization stocks lagged their larger peers, with the Small-Cap blend (IJR) declining by -0.12%. On the flows front, the Invesco QQQ Trust (QQQ) experienced significant outflows, shedding over $2.15 billion in the past week, while the SPDR S&P 500 ETF Trust (SPY) saw inflows of $5.75 billion over the same period.
U.S. Sectors & Industries
Communication Services (XLC) was the clear leader, rallying 1.67%. The surge was almost entirely driven by Alphabet (GOOGL, GOOG), which soared over 9% after a favorable antitrust ruling. Given Alphabet’s combined weight of over 20% in the sector, its performance single-handedly lifted the group. Technology (XLK) followed with a solid gain of 0.60%. On the other end of the spectrum, Energy (XLE) was the worst-performing sector, falling -2.24%, with oil and gas exploration and production firms (XOP) tumbling -2.77%. Financials (XLF) attracted the most new capital over the last week with inflows totaling $1.34 billion, while the Technology sector saw the largest redemptions, with outflows of $3.03 billion, primarily from the Vanguard Information Technology ETF (VGT).
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Global Thematic
Thematic ETFs saw wide performance dispersion. Silver Miners (SIL) jumped 1.92%, and other precious metals-related funds also posted strong gains. Conversely, cannabis-focused ETFs had a difficult session, with AdvisorShares Pure US Cannabis ETF (MSOS) plummeting -10.66%. In terms of fund flows, the VanEck Gold Miners ETF (GDX) pulled in a notable $311 million over the past week. In contrast, the ARK Innovation ETF (ARKK) continued to see significant outflows, with investors pulling $378 million.
Developed Markets ex-U.S.
International developed markets were broadly positive. South Korea (EWY) was a notable outperformer, climbing 1.38% on the day. The broader iShares MSCI EAFE ETF (EFA), which tracks developed markets outside the U.S. and Canada, posted a modest gain of 0.15%. Hong Kong (EWH) was a laggard in the region, declining by -0.70%.
Emerging Markets
Emerging markets also trended higher, with the iShares MSCI Emerging Markets ETF (EEM) rising 0.38%. Thailand (THD) was one of the strongest performers, gaining 1.21%. Chinese equities, however, showed weakness, with the iShares MSCI China ETF (MCHI) falling -0.50% and several China-focused technology ETFs posting losses.
Fixed Income
Bond markets rallied as yields eased on economic growth concerns. Long-duration government bonds saw strong interest, with the SPDR Portfolio Long Term Treasury ETF (SPTL) gaining 0.96%. High-yield corporate bonds (HYG) also found support, rising 0.27%. The largest fund flows in the fixed income space were directed toward investment-grade corporate bond ETFs like LQD, which attracted over $800 million in the past week.
Commodities
The commodity complex was a mixed bag. Natural Gas (UNG) was a bright spot, rising 2.19%. Precious metals also gained, with Gold (GLD) up 0.78% and Silver (SLV) adding 0.51%. Energy commodities sold off, with WTI Crude Oil (USO) falling -2.51%. Gold ETFs dominated inflows, with GLD alone taking in over $3.3 billion in the past week, reflecting strong safe-haven demand.
Cryptocurrency
Digital assets had a strong session, led by a significant rally in Ethereum. The iShares Ethereum Trust (ETHA) surged 4.86%, greatly outpacing Bitcoin. The iShares Bitcoin Trust (IBIT) posted a solid gain of 1.27%. Ethereum-related products saw large inflows over the past month, totaling nearly $4 billion for the category.
What to Watch Today
All eyes will be on the release of the ISM Services PMI this morning. This report is a critical indicator of the health of the U.S. services sector, which accounts for the majority of economic activity. Investors will be scrutinizing the data for any signs of slowing momentum that could influence the Federal Reserve’s policy path. A weaker-than-expected reading could reinforce expectations for an interest rate cut, while a surprisingly strong number might revive inflation concerns. Also on the docket are the weekly Initial Jobless Claims, which will provide another timely update on the state of the labor market.
For a deeper dive into the data, access today’s full Daily ETF Data Pack.
Disclosures
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.
