Macro Overview
The market narrative evolved dramatically during the previous session, culminating in a powerful, broad-based rally. Initially, sentiment was cautious after the August Consumer Price Index (CPI) report revealed a headline increase of 0.4%, slightly above forecasts and marking the highest annual pace of 2.9% for the year. However, the market’s focus shifted decisively with the release of a much weaker-than-expected jobless claims report. A surge in unemployment claims to a near four-year high convinced investors that a weakening labor market would compel the Federal Reserve to cut interest rates, regardless of the sticky inflation data. This “bad news is good news” dynamic fueled a risk-on surge, with the S&P 500 (IVV) climbing 0.83% to close at a fresh record high.
U.S. Size & Style
It was a banner day for smaller companies, which surged on the prospect of lower interest rates. Small-caps (IJR) jumped 2.11%, significantly outpacing their large-cap counterparts (IVV at +0.83%). The rally was particularly strong in the value and growth segments of small- and mid-caps, with Mid-Cap Growth (IJK) up 1.87% and Small-Cap Value (IJS) rising 2.03%. This broad participation signals a healthy risk appetite and a shift away from the narrow, large-cap-led advances seen recently.
| Name | Ticker | 1-Day % Change | 1-Month % Change | 3-Month % Change | YTD % Change | 1-Year % Change |
|---|---|---|---|---|---|---|
| Small Cap | IJR | +2.11% | 8.37% | 10.77% | 4.94% | 11.41% |
| Small Growth | IJT | +2.06% | 6.37% | 8.41% | 5.87% | 10.41% |
| Small Value | IJS | +2.03% | 10.30% | 13.17% | 3.88% | 12.02% |
| Mid Growth | IJK | +1.87% | 6.32% | 9.51% | 7.66% | 12.44% |
| Mid Cap | IJH | +1.67% | 6.77% | 9.14% | 7.37% | 13.84% |
| Mid Value | IJJ | +1.62% | 7.56% | 8.88% | 6.94% | 15.17% |
| Large Value | IVE | +1.24% | 3.04% | 6.76% | 7.95% | 8.42% |
| Large Cap | IVV | +0.83% | 3.44% | 9.71% | 12.98% | 20.19% |
| Large Growth | IVW | +0.52% | 3.77% | 12.29% | 17.34% | 30.03% |
U.S. Sectors & Industries
Cyclical sectors led yesterday’s broad rally. Materials (+2.09%) was the top-performing sector, followed closely by Consumer Discretionary (+1.95%) and Health Care (+1.74%). The gains were fueled by strong performance in interest-rate sensitive industries like Homebuilders (XHB), which surged 2.60%. Even the previously lagging Health Care sector saw a revival, with Health Care Services (XHS) and Capital Markets (KCE) both jumping 2.29%. In a complete reversal from the prior day, Energy was the weakest sector, finishing nearly flat.
| Sector | 1-Day % Change | 1-Month % Change | 3-Month % Change | YTD % Change | 1-Year % Change |
|---|---|---|---|---|---|
| Materials (XLB) | +2.09% | 5.06% | 5.72% | 11.14% | 3.73% |
| Consumer Discretionary (XLY) | +1.95% | 5.81% | 10.79% | 6.32% | 26.67% |
| Health Care (XLV) | +1.74% | 7.24% | 3.42% | 2.44% | -8.50% |
| Financials (XLF) | +1.64% | 4.24% | 6.30% | 12.57% | 23.84% |
| Real Estate (XLRE) | +1.62% | 3.73% | 2.19% | 6.20% | -1.91% |
| Communication Services (XLC) | +1.54% | 7.58% | 11.66% | 20.85% | 39.31% |
| Industrials (XLI) | +0.95% | 1.64% | 6.25% | 16.67% | 20.83% |
| Consumer Staples (XLP) | +0.81% | -2.21% | -0.42% | 3.76% | -0.25% |
| Utilities (XLU) | +0.53% | -0.98% | 5.86% | 13.97% | 13.30% |
| Technology (XLK) | +0.34% | 2.63% | 12.97% | 16.97% | 25.45% |
| Energy (XLE) | +0.02% | 5.79% | 4.15% | 5.73% | 9.15% |
Global Thematic
The risk-on sentiment fueled a major rebound in beaten-down thematic areas. ARK Genomic Revolution (ARKG) soared 5.69%, and the flagship ARK Innovation ETF (ARKK) gained 3.63%. Lithium & Battery Tech (LIT) also had a strong day, rising 3.24%. The persistent pain in the Cannabis space continued, however, as MSOS (-5.81%) and CNBS (-5.02%) were among the worst performers of the day.
| Ticker | Name | 1-Day % Change |
|---|---|---|
| ARKG | ARK Genomic Revolution ETF | +5.69% |
| SLVR | Sprott Silver Miners & Physical Silver ETF | +3.99% |
| ARKK | ARK Innovation ETF | +3.63% |
| PEJ | Invesco Leisure and Entertainment ETF | +3.58% |
| LIT | Global X Lithium & Battery Tech ETF | +3.24% |
| URNM | Sprott Uranium Miners ETF | -1.04% |
| URNJ | Sprott Junior Uranium Miners ETF | -1.53% |
| MJ | Amplify Alternative Harvest ETF | -3.69% |
| CNBS | Amplify Seymour Cannabis ETF | -5.02% |
| MSOS | AdvisorShares Pure US Cannabis ETF | -5.81% |
Developed Markets ex-U.S.
The positive sentiment spilled over into international markets, with the broad Developed ex-U.S. index (EFA) rising 1.06%. Hong Kong (EWH) was a standout leader, jumping 1.75%. Gains were seen across the board, from Australia (+1.78%) to the Netherlands (+1.85%), as global investors cheered the benign U.S. inflation data. The only notable laggard was Israel (EIS), which edged down 0.34%.
| Name | Ticker | 1-Day % Change | 1-Month % Change | 3-Month % Change | YTD % Change | 1-Year % Change |
|---|---|---|---|---|---|---|
| Netherlands | EWN | +1.85% | 3.99% | 1.50% | 24.04% | 13.98% |
| Australia | EWA | +1.78% | 2.85% | 4.61% | 16.63% | 10.48% |
| Hong Kong | EWH | +1.75% | 5.00% | 12.78% | 35.12% | 45.77% |
| South Korea | EWY | +1.58% | 6.61% | 16.23% | 53.00% | 29.33% |
| Canada | EWC | +1.53% | 5.58% | 10.06% | 24.70% | 27.16% |
| France | EWQ | +1.47% | 2.79% | 3.26% | 24.06% | 15.41% |
| Japan | EWJ | +1.19% | 4.54% | 11.28% | 22.17% | 19.70% |
| U.K. | EWU | +1.08% | 3.81% | 6.54% | 27.00% | 20.00% |
| Dev ex-U.S. | EFA | +1.06% | 3.74% | 5.88% | 25.61% | 19.32% |
| Switzerland | EWL | +0.90% | 5.49% | 3.17% | 24.43% | 12.77% |
| Germany | EWG | +0.12% | -1.31% | -0.09% | 32.22% | 32.27% |
Emerging Markets
Emerging markets (EEM) participated enthusiastically in the global rally, gaining 1.46%. China (MCHI) was a primary driver, surging 2.67% as tech-focused Chinese ETFs like CQQQ jumped 4.61%. Mexico (EWW) also posted a strong 2.22% gain. The notable exception was Turkey (TUR), which fell 1.82%, completely missing out on the risk-on mood.
| Name | Ticker | 1-Day % Change | 1-Month % Change | 3-Month % Change | YTD % Change | 1-Year % Change |
|---|---|---|---|---|---|---|
| China | MCHI | +2.67% | 11.05% | 16.07% | 38.36% | 61.99% |
| Mexico | EWW | +2.22% | 6.78% | 8.67% | 42.89% | 32.42% |
| Indonesia | EIDO | +1.79% | -1.89% | -4.21% | -1.98% | -16.90% |
| Thailand | THD | +1.53% | 6.01% | 16.62% | 3.55% | -2.39% |
| Emerging | EEM | +1.46% | 6.06% | 10.46% | 26.23% | 26.97% |
| South Africa | EZA | +1.39% | 7.45% | 13.30% | 46.20% | 40.99% |
| Brazil | EWZ | +0.87% | 8.72% | 8.42% | 35.93% | 9.55% |
| Malaysia | EWM | +0.64% | 2.97% | 5.80% | 5.45% | 3.26% |
| Taiwan | EWT | +0.29% | 4.08% | 12.38% | 21.21% | 24.60% |
| India | INDA | +0.15% | 1.86% | -3.78% | 1.14% | -6.12% |
Fixed Income
Bonds rallied alongside equities as the inflation report eased concerns about future Fed hikes. Credit-sensitive assets performed well, with Convertible bonds (CWB) leading the way with a 0.88% gain. Long-duration assets also caught a bid, with Municipal Long (MLN) and Taxable Long Term (BLV) bonds rising 0.64% and 0.58% respectively. Even the shortest end of the curve saw modest gains.
| Category | Ticker | 1-Day % Change | 1-Month % Change | 3-Month % Change | YTD % Change | 1-Year % Change |
|---|---|---|---|---|---|---|
| Convertible | CWB | +0.88% | 4.83% | 9.30% | 14.91% | 22.38% |
| Municipal Long | MLN | +0.64% | 3.75% | 4.71% | -0.19% | -0.76% |
| Taxable Long Term | BLV | +0.58% | 3.66% | 6.41% | 7.79% | -1.54% |
| Preferred Stock | PFF | +0.56% | 3.45% | 7.09% | 6.55% | 4.39% |
| Emerging | EMLC | +0.51% | 1.93% | 4.27% | 15.01% | 9.63% |
| Government Long | SPTL | +0.48% | 3.44% | 5.83% | 6.73% | -4.53% |
| International | IGOV | +0.42% | 1.59% | 1.52% | 11.48% | 3.71% |
| Emerging USD | EMB | +0.37% | 2.61% | 5.95% | 11.14% | 9.24% |
| Municipal Intermediate | MUB | +0.37% | 2.51% | 3.57% | 2.08% | 1.38% |
| Municipal High Yield | HYD | +0.28% | 3.63% | 3.51% | 0.76% | 0.55% |
| Taxable High Yield | HYG | +0.25% | 1.50% | 3.42% | 7.08% | 8.30% |
| Taxable Core Enhanced | IUSB | +0.19% | 1.92% | 3.79% | 6.64% | 3.45% |
| Taxable Core | AGG | +0.19% | 1.97% | 3.75% | 6.59% | 2.93% |
| Mortgage Backed | MBS | +0.18% | 2.40% | 4.19% | 7.12% | 3.07% |
| Corporate | SPIB | +0.18% | 1.54% | 3.44% | 6.84% | 5.55% |
| Inflation Protected | TIP | +0.16% | 1.71% | 4.10% | 7.43% | 4.55% |
| Bank Loans | BKLN | +0.14% | 0.78% | 2.07% | 4.42% | 7.36% |
| Taxable Multisector | PYLD | +0.11% | 1.78% | 3.80% | 7.52% | 7.52% |
| Municipal Short | SUB | +0.09% | 0.67% | 1.90% | 3.34% | 3.67% |
| International USD | BNDX | +0.06% | 0.57% | 0.94% | 2.67% | 2.84% |
| Taxable Short-Term | BSV | +0.04% | 0.89% | 2.13% | 4.84% | 4.24% |
| Government Short | SPTS | +0.03% | 0.71% | 1.67% | 3.80% | 4.05% |
| Taxable Ultrashort | BIL | +0.01% | 0.37% | 1.08% | 2.94% | 4.43% |
| Government Intermediate | SPTI | 0.00% | 1.51% | 3.20% | 6.82% | 3.38% |
Commodities
Commodities were one of the few areas to see widespread declines. The energy complex was hit particularly hard, with WTI Crude Oil (USO) falling 2.29% and Natural Gas (UNG) continuing its slide with a 3.57% loss. The broad commodities index (DJP) ended the day down 0.26%. In contrast, Industrial Metals (DBB) bucked the trend, gaining 1.56% on the back of a 1.66% rise in Copper (CPER).
| Name | Ticker | 1-Day % Change | 1-Month % Change | 3-Month % Change | YTD % Change | 1-Year % Change |
|---|---|---|---|---|---|---|
| Copper | CPER | +1.66% | 4.01% | -4.06% | 14.47% | 10.68% |
| Industrial Metals | DBB | +1.56% | 3.64% | 8.08% | 7.27% | 10.63% |
| Palladium | PALL | +1.07% | 3.82% | 11.31% | 30.16% | 16.52% |
| Silver | SLV | +1.02% | 10.56% | 14.69% | 43.52% | 44.68% |
| Wheat | WEAT | +0.97% | -2.56% | -7.93% | -13.28% | -19.15% |
| Soybeans | SOYB | +0.87% | 2.50% | 1.56% | 2.93% | 0.78% |
| Agriculture | DBA | +0.74% | 2.93% | 1.33% | 3.08% | 14.05% |
| Corn | CORN | +0.74% | 2.68% | -3.61% | -6.23% | -1.68% |
| Precious Metals | DBP | +0.07% | 8.74% | 9.44% | 36.93% | 43.30% |
| Gold | GLD | -0.15% | 8.49% | 8.56% | 38.26% | 44.14% |
| Platinum | PPLT | -0.22% | 4.39% | 10.10% | 52.07% | 44.18% |
| Sugar | CANE | -0.24% | -3.86% | -4.92% | -7.39% | -7.96% |
| Broad Based Commodities | DJP | -0.26% | 3.22% | 0.84% | 8.01% | 15.80% |
| Gasoline | UGA | -1.91% | 3.14% | 2.37% | 1.29% | 12.98% |
| Brent Crude Oil | BNO | -2.04% | 0.37% | 0.00% | -0.47% | 8.56% |
| WTI Crude Oil | USO | -2.29% | -1.08% | -2.43% | -3.38% | 7.59% |
| Natural Gas | UNG | -3.57% | -4.97% | -22.13% | -26.12% | -12.84% |
Cryptocurrency
Digital assets participated strongly in the risk-on rally. Ethereum (ETHA) was the standout performer, surging 2.42% as it outpaced Bitcoin for the day. Bitcoin (IBIT) still posted a healthy gain of 0.77%, and Solana (SOLZ) also climbed more than 2%, as the entire complex benefited from the improved macro sentiment.
| Name | Ticker | 1-Day % Change | 1-Month % Change | 3-Month % Change | YTD % Change | 1-Year % Change |
|---|---|---|---|---|---|---|
| Ethereum | ETHA | +2.42% | 3.84% | 57.16% | 32.42% | 88.68% |
| Solana | SOLZ | +2.06% | 26.28% | 33.35% | N/A | N/A |
| Multi-Coin | NCIQ | +1.27% | -2.47% | 11.82% | N/A | N/A |
| Bitcoin | IBIT | +0.77% | -3.86% | 5.16% | 22.58% | 98.26% |
What to Watch Today
The key economic release this morning was the preliminary September University of Michigan Consumer Sentiment Index. The headline number came in at 58.0, a slight decrease from August’s final reading of 58.2 and indicating a continued deterioration in consumer confidence. The report highlights ongoing consumer worries about inflation, future business conditions, and the labor market, continuing a trend seen in the prior month. While the market digested yesterday’s positive reaction to weak jobs data, this morning’s soft sentiment reading could temper enthusiasm as it raises questions about the health and future spending patterns of the U.S. consumer.
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.
