In the latest trading session, broad-market exchange-traded funds, including the IWM and IVV, witnessed declines, with the Invesco QQQ Trust (QQQ) suffering a notable drop of nearly 3%. This downturn in U.S. equity indexes came as investors reacted to disappointing quarterly earnings results from major firms such as Tesla and Alphabet.
The Nasdaq Composite Index fell significantly, shedding over 500 points, reflecting a general deterioration in risk sentiment among investors, particularly due to the performance of these tech heavyweights. In the energy sector, the iShares US Energy ETF (IYE) and Energy Select Sector SPDR (XLE) managed to gain roughly 0.5% each, offering a stark contrast to the declines in technology.
However, even within the tech sector, the Technology Select Sector SPDR ETF (XLK) experienced a notable decline of 3.3%. Other technology-focused funds, including iShares US Technology ETF (IYW) and iShares Expanded Tech Sector ETF (IGM), also reported losses. The semiconductor sector was not spared from the downturn, with SPDR S&P Semiconductor (XSD) losing 3% and iShares Semiconductor (SOXX) dropping by 3.8%. In the financial sector, the Financial Select Sector SPDR (XLF) experienced a modest decline of 0.5%.
Direxion Daily Financial Bull 3X Shares (FAS) dropped by 1.4%, while its bearish counterpart, Direxion Daily Financial Bear 3X Shares (FAZ), showcased a slight gain of 1.2%, indicating a mixed response from investors in this sector. On the commodities front, crude oil prices rose by 1.2%, with the United States Oil Fund (USO) increasing by 1%.
Meanwhile, natural gas prices fell by 1.3%, contributing to a 2.9% decline in the United States Natural Gas Fund (UNG). Gold prices showed resilience, climbing 0.6% as per Comex metrics, mirrored by a similar increase in SPDR Gold Shares (GLD). Silver, on the other hand, saw a minor increase of 0.2%, although the iShares Silver Trust (SLV) experienced a negligible drop of less than 0.1%. Within the consumer sector, Consumer Staples Select Sector SPDR (XLP) eased by 0.2%.
Additionally, both Vanguard Consumer Staples ETF (VDC) and iShares Dow Jones US Consumer Goods (IYK) saw declines. In terms of consumer discretionary, Consumer Discretionary Select Sector SPDR (XLY) fell by 3.2%, with associated retail funds such as VanEck Vectors Retail ETF (RTH) and SPDR S&P Retail (XRT) also reporting lower performance. The health care sector showed some positive movement, with Health Care Select Sector SPDR (XLV) edging up by 0.7%.
Both iShares US Healthcare (IYH) and Vanguard Health Care ETF (VHT) displayed gains, and the iShares NASDAQ Biotechnology ETF (IBB) recorded a 0.9% increase. In the industrials sector, Select Sector SPDR-Industrial (XLI) saw a decline of 1.2%, with Vanguard Industrials (VIS) and iShares U.S. Industrials (IYJ) also experiencing drops of 1.1% and 1.2%, respectively.
As the market digests these developments, investors remain cautious and watchful of upcoming earnings and economic indicators..