Macro Overview
U.S. markets finished a mixed session on Thursday as investors digested stronger-than-expected economic growth data alongside record earnings from Nvidia that still managed to disappoint lofty expectations. The S&P 500, as tracked by IVV, gained 0.36%, while the tech-heavy Nasdaq also saw modest gains. However, the Dow Jones Industrial Average lagged, closing in negative territory. The energy sector, tracked by XLE, was a bright spot, climbing 0.76% on the day. Small-cap stocks, represented by IJR, underperformed, finishing the day down 0.19%. The mixed performance came as second-quarter GDP growth was revised upward to 3.3%, exceeding initial estimates and signaling a resilient economy. Despite the positive economic news, a slight dip in Nvidia’s stock after its earnings report seemed to cap enthusiasm in the tech sector, raising questions about the sustainability of the recent AI-fueled rally.
U.S. Size & Style
Across U.S. size and style, growth-oriented funds generally outperformed their value counterparts. Large-cap growth (IVW) rose 0.55%, while large-cap value (IVE) saw a smaller gain of 0.07%. Mid-cap growth (IJK) also posted a solid 0.60% gain, while mid-cap value (IJJ) fell 0.19%. The trend reversed in small caps, where small-cap growth (IJT) declined by 0.14% and small-cap value (IJS) saw a larger drop of 0.32%. In terms of fund flows, large-cap blend ETFs saw significant inflows of over $5.8 billion in the last week, while small-cap blend funds experienced outflows of over $1.3 billion in the last month.
U.S. Sectors & Industries
The technology sector (XLK) was a top performer, gaining 0.79%, with semiconductors (XSD) leading the charge with a 1.58% advance. The energy sector (XLE) also had a strong showing, up 0.76%, driven by gains in oil and gas exploration and production (XOP), which rose 1.05%. On the other end of the spectrum, defensive sectors like utilities (XLU) and consumer staples (XLP) were the biggest laggards, falling 0.76% and 0.63%, respectively. Financials (XLF) saw the largest inflows over the past week, attracting nearly $1 billion, while consumer staples (XLP) saw the largest outflows at over $500 million.
Global Thematic
Thematic ETFs had a strong day, with several niche sectors posting significant gains. Uranium and nuclear energy (URA) was a standout performer, surging 3.28%. Cloud computing (SKYY) also had a robust session, climbing 3.13%. Other top-performing themes included cannabis (CNBS) and cybersecurity (HACK). In contrast, precious metals miners were a weak spot, with gold miners (GDX) falling 0.24%. From a flows perspective, gold miners (GDX) saw the largest inflows over the past week, at $196 million, while the iShares A.I. Innovation and Tech Active ETF (BAI) experienced the largest outflows, shedding $161 million.
Developed Markets ex-U.S.
International developed markets were broadly positive, with the broad-based EFA up 0.37%. South Korea (EWY) was the top-performing country, with a gain of 1.61%, followed by Japan (EWJ) at 0.84%. European markets were more mixed, with France (EWQ) up 0.80% while the U.K. (EWU) slipped 0.22%. The majority of developed market country ETFs are trading above their 50-day and 200-day moving averages, indicating a positive medium- and long-term trend.
Emerging Markets
Emerging markets also saw gains, with the benchmark EEM rising 0.38%. Brazil (EWZ) was a notable outperformer, jumping 1.62%. China (MCHI) also had a solid day, gaining 0.72%. India (INDA), however, bucked the trend, falling 0.27%. Over the past year, China has been a standout performer, with MCHI up over 51%.
Fixed Income
In the fixed income space, longer-duration bonds saw the largest gains as yields ticked lower. Government long bonds (SPTL) rose 0.57%, while the core taxable bond ETF (AGG) gained 0.12%. High-yield bonds (HYG) were up a modest 0.05%. Over the past week, taxable core and corporate bond ETFs have seen the largest inflows, at over $1.3 billion and $1.1 billion respectively.
Commodities
Commodities were broadly higher, with precious metals leading the way. Silver (SLV) jumped 1.51%, while gold (GLD) gained 0.74%. Natural gas (UNG) also had a strong day, rising 3.12%. Agriculture (DBA) was the main laggard, falling 0.58%. Precious metals have seen significant inflows over the past month, with over $1.9 billion flowing into the category.
Cryptocurrency
The cryptocurrency market was mixed, with Bitcoin (IBIT) down a slight 0.11%, while Ethereum (ETHA) fell more sharply, losing 2.86%. In contrast, Solana (SOLZ) posted a gain of 1.52%. Over the past month, Ethereum-focused ETFs have seen massive inflows of over $4.4 billion, while Bitcoin ETFs have seen outflows of over $273 million.
What to Watch Today
All eyes will be on the release of the July Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation. Economists are expecting a slight uptick in the core reading, which excludes volatile food and energy prices. A hotter-than-expected number could reignite concerns about inflation and potentially influence the Fed’s thinking on future interest rate cuts. Investors will be closely watching the data for any signs that inflationary pressures are re-accelerating, which could lead to increased market volatility.
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This report is for informational purposes only and should not be considered investment advice. This report was generated with assistance from AI.
