Mega-Caps Push Markets to New Records to Start Fed Week

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Macro Overview

Wall Street began the pivotal Federal Reserve meeting week on a positive note, with major indices climbing to new records. The S&P 500 (IVV) rose 0.52% on Monday, driven by continued strength in mega-cap technology stocks. Investor optimism was fueled by news of a significant stock purchase by Tesla’s CEO and reports that Google’s parent company, Alphabet, surpassed a $3 trillion market capitalization. The market appears to be in a holding pattern, albeit a bullish one, as it awaits the Fed’s interest rate decision and forward guidance on Wednesday, which remains the week’s main event.

U.S. Size & Style

The market reverted to a familiar pattern of large-cap growth leadership on Monday. The Large Growth index (IVW) surged 0.96%, significantly outpacing all other size and style segments. Value stocks were notably weaker, with Large Value (IVE) finishing flat at -0.01% and Mid-Cap Value (IJJ) falling 0.24%. The strength was highly concentrated in the biggest names, while small and mid-cap stocks posted muted gains, indicating a narrow advance to start the week.

U.S. Size & Style Performance
Name Ticker 1-Day % Change 1-Month % Change 3-Month % Change YTD % Change 1-Year % Change
Large Growth IVW +0.96% 4.06% 14.44% 18.60% 29.28%
Large Cap IVV +0.52% 2.71% 11.08% 13.53% 19.16%
Mid Growth IJK +0.22% 3.69% 10.04% 6.58% 8.74%
Small Value IJS +0.14% 4.73% 14.56% 2.69% 6.58%
Small Cap IJR +0.09% 3.61% 11.95% 3.60% 5.84%
Small Growth IJT +0.04% 2.53% 9.61% 4.52% 4.92%
Mid Cap IJH +0.02% 3.56% 9.52% 6.21% 9.70%
Large Value IVE -0.01% 1.13% 7.27% 7.71% 7.03%
Mid Value IJJ -0.24% 3.40% 8.97% 5.50% 10.53%

U.S. Sectors & Industries

Monday’s sector performance was clearly bifurcated between growth and value. Communication Services (+1.41%) and Technology (+0.90%) were the top performers, driven by strength in their mega-cap constituents. Telecom (XTL) and Semiconductors (XSD) were notable bright spots, gaining 1.87% and 1.48% respectively. On the flip side, defensive and value-oriented sectors lagged significantly. Consumer Staples was the worst performer, falling 1.15%, followed by Health Care (-0.85%) and Materials (-0.81%).

GICS Sector Performance (Ordered Best to Worst)
Sector 1-Day % Change 1-Month % Change 3-Month % Change YTD % Change 1-Year % Change
Communication Services (XLC) +1.41% 6.75% 16.28% 23.58% 38.49%
Technology (XLK) +0.90% 2.87% 14.47% 17.94% 24.83%
Consumer Discretionary (XLY) +0.87% 5.09% 13.91% 7.80% 26.14%
Industrials (XLI) +0.46% 1.22% 7.07% 16.27% 18.30%
Utilities (XLU) +0.23% 0.09% 5.98% 14.81% 12.31%
Real Estate (XLRE) -0.12% 2.35% 1.88% 5.60% -3.32%
Financials (XLF) -0.22% 2.33% 7.81% 11.84% 22.40%
Energy (XLE) -0.34% 3.20% 1.06% 4.74% 6.57%
Materials (XLB) -0.81% 1.01% 4.60% 9.14% 0.03%
Health Care (XLV) -0.85% 0.53% 1.07% 0.39% -10.83%
Consumer Staples (XLP) -1.15% -3.19% -1.26% 2.23% -3.01%

Global Thematic

Thematic performance was heavily skewed toward speculative and high-growth areas. The Uranium & Nuclear Energy theme was the undisputed leader, with Sprott Junior Uranium Miners (URNJ) skyrocketing 12.47% and the broader URA ETF gaining 9.35%. Tech & Battery Metals (LIT) also had a strong showing, up 3.70%. Conversely, the “vice” trades were out of favor, with Cannabis-related ETFs like CNBS (-2.53%) and BDC-focused funds like BIZD (-2.02%) among the day’s worst performers.

Global Thematic Top & Bottom 5 Performers
Ticker Name 1-Day % Change
URNJ Sprott Junior Uranium Miners ETF +12.47%
URNM Sprott Uranium Miners ETF +10.06%
URA Global X Uranium ETF +9.35%
NLR VanEck Uranium and Nuclear ETF +6.81%
SETM Sprott Critical Materials ETF +5.71%
SBIO ALPS Medical Breakthroughs ETF -1.40%
MSOS AdvisorShares Pure US Cannabis ETF -1.67%
BIZD VanEck BDC Income ETF -2.02%
PBDC Putnam BDC Income ETF -2.35%
CNBS Amplify Seymour Cannabis ETF -2.53%

Developed Markets ex-U.S.

International developed markets posted solid gains on Monday, with the broad EFA index climbing 0.67%. The Netherlands (EWN) was a top performer, surging 1.99%, followed by strong showings from Australia (EWA, +1.21%) and Canada (EWC, +1.07%). The risk-on sentiment was widespread across Europe and the Pacific. The only notable area of weakness was Israel, with ETFs like EIS (-1.60%) and IZRL (-1.53%) falling sharply.

Developed Markets ex-U.S. Performance
Name Ticker 1-Day % Change 1-Month % Change 3-Month % Change YTD % Change 1-Year % Change
Netherlands EWN +1.99% 4.87% 5.52% 26.98% 15.19%
Australia EWA +1.21% 2.76% 6.34% 17.31% 9.63%
Canada EWC +1.07% 6.05% 9.99% 25.22% 26.15%
France EWQ +0.92% 0.00% 4.79% 25.09% 15.65%
Japan EWJ +0.73% 1.50% 11.42% 22.22% 19.21%
Dev ex-U.S. EFA +0.67% 1.54% 6.72% 25.94% 18.39%
South Korea EWY +0.67% 7.90% 19.23% 55.61% 28.13%
U.K. EWU +0.36% 1.99% 6.26% 26.70% 18.84%
Germany EWG +0.27% -2.72% 1.43% 32.32% 29.95%
Hong Kong EWH +0.27% 3.73% 13.67% 34.75% 43.55%
Switzerland EWL -0.16% 1.94% 2.53% 23.19% 10.17%

Emerging Markets

Emerging markets (EEM) also participated in the global rally, gaining 0.73%. Brazil (EWZ) was a standout performer, jumping 1.60%. The gains were broad-based across Latin America and Emerging Asia. In a remarkable reversal, Turkey (TUR) soared 6.10% after being a major laggard last week. The only notable area of weakness was Africa-focused funds, with AFK down 1.58%.

Emerging Markets Performance
Name Ticker 1-Day % Change 1-Month % Change 3-Month % Change YTD % Change 1-Year % Change
Brazil EWZ +1.60% 8.19% 10.40% 38.01% 9.54%
Mexico EWW +0.98% 8.85% 11.33% 45.19% 28.99%
China MCHI +0.75% 7.96% 18.78% 38.83% 62.07%
Emerging EEM +0.73% 5.41% 12.81% 27.08% 26.18%
Indonesia EIDO +0.73% -2.92% -0.95% -0.20% -16.11%
South Africa EZA +0.59% 5.74% 15.66% 47.10% 40.04%
India INDA +0.53% 1.37% -1.13% 1.50% -6.96%
Thailand THD +0.34% 6.21% 17.91% 3.72% -4.02%
Malaysia EWM +0.31% 2.28% 7.55% 6.37% 2.51%
Taiwan EWT +0.30% 4.30% 12.84% 21.75% 23.84%

Fixed Income

The fixed income markets were broadly positive on Monday as investors positioned for the Fed meeting. The rally was led by riskier credit segments, with Convertible bonds (CWB) gaining 0.71%. International (IGOV) and Emerging Market (EMLC) bonds also saw strong bids, rising 0.47% and 0.39% respectively. The only area to see weakness was Municipal Short-Term bonds (SUB), which slipped by a marginal 0.05%.

Fixed Income Category Performance
Category Ticker 1-Day % Change 1-Month % Change 3-Month % Change YTD % Change 1-Year % Change
Convertible CWB +0.71% 4.48% 11.42% 15.78% 22.07%
International IGOV +0.47% 1.35% 1.44% 11.56% 3.21%
Emerging EMLC +0.39% 1.61% 4.64% 15.42% 8.91%
Preferred Stock PFF +0.38% 2.75% 8.15% 6.72% 3.83%
Emerging USD EMB +0.36% 2.29% 6.50% 11.21% 8.64%
Mortgage Backed MBS +0.32% 2.67% 4.56% 7.42% 3.40%
Municipal Long MLN +0.29% 4.27% 4.76% 0.04% -0.47%
Taxable High Yield HYG +0.28% 1.39% 3.80% 7.28% 8.05%
Municipal High Yield HYD +0.28% 3.61% 3.74% 0.90% 0.61%
Taxable Long Term BLV +0.27% 4.17% 6.29% 7.79% -1.54%

Commodities

Commodities saw a broad-based rally on Monday. The broad commodities index (DJP) rose 1.26%, with strong gains across the board. Natural Gas (UNG) was the standout performer, surging 3.20% as it rebounded from recent lows. Agriculture (DBA) also had a strong day, up 1.49%. Even precious metals like Gold (GLD) posted a solid 1.04% gain. The only major commodity to finish in the red was Palladium (PALL), which fell 1.17% after a strong run-up last week.

Commodity Performance
Name Ticker 1-Day % Change 1-Month % Change 3-Month % Change YTD % Change 1-Year % Change
Natural Gas UNG +3.20% 0.62% -21.09% -23.20% -10.90%
Copper CPER +1.50% 3.98% -2.49% 15.38% 9.96%
Agriculture DBA +1.49% 3.14% 3.52% 4.96% 15.35%
Gasoline UGA +1.32% 5.23% 1.82% 3.51% 12.81%
Broad Commodities DJP +1.26% 5.21% 0.48% 10.07% 15.12%
WTI Crude Oil USO +1.25% 1.96% -7.47% -1.75% 6.29%
Energy DBE +1.13% 3.02% -3.27% 3.04% 11.47%
Silver SLV +1.10% 12.35% 17.56% 47.21% 38.33%
Gold GLD +1.04% 10.24% 7.15% 39.97% 41.99%
Palladium PALL -1.17% 7.29% 15.84% 30.94% 11.39%

Cryptocurrency

The cryptocurrency market took a significant hit on Monday, giving back a large portion of the gains from Friday’s spectacular rally. Ethereum (ETHA) led the decline, falling 3.82%, while Solana (SOLZ) also dropped sharply by 3.66%. Bitcoin (IBIT) was not immune to the sell-off, losing 1.33%. This sharp reversal suggests profit-taking and renewed caution in the most speculative corner of the market ahead of the Federal Reserve’s meeting.

Cryptocurrency Performance
Name Ticker 1-Day % Change 1-Month % Change 3-Month % Change YTD % Change 1-Year % Change
Bitcoin IBIT -1.33% -1.41% 9.64% 23.47% 92.42%
Multi-Coin NCIQ -1.62% -0.70% 17.79% N/A N/A
Solana SOLZ -3.66% 24.73% 53.86% N/A N/A
Ethereum ETHA -3.82% 2.59% 77.69% 34.48% 84.94%

What to Watch Today

The August Retail Sales report, released this morning, showed a surprisingly strong 0.6% month-over-month increase, significantly outpacing the 0.2% growth economists had forecast. This robust figure, coupled with an upward revision to July’s data, points to continued resilience from the U.S. consumer despite other signs of a cooling economy. While this strong spending might normally suggest inflationary pressure, the market will likely view it through the lens of the upcoming Fed meeting, weighing whether consumer strength gives the Fed cover to be more patient with rate cuts. Other data to watch today include Industrial Production and Business Inventories.

For a deeper dive into the data, access today’s full Daily ETF Data Pack.

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.

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