Trade War or Not, Specific Industry ETFs Are in Sweet Spots

The U.S.-China trade tensions once again started hitting headlines since last Friday. On Friday, Trump announced plans to impose an additional 100% tariff on Chinese goods starting Nov. 1, in response to Beijing’s new export controls on rare earth minerals. This caused a Wall Street crash on Friday.

At the start of this week, however, markets briefly rallied after Trump hinted at a possible easing of tensions. But the optimism eroded quickly after China sanctioned U.S. units of a South Korean shipping company. Meanwhile, Trump warned of further trade restrictions in response to Beijing’s halt on U.S. soybean purchases, as quoted on Yahoo Finance.

No wonder, markets remained edgy. A measure of market volatility, Barclays iPath Series B S P 500 VIX Short Term Futures ETN Series B VXX, has gained 5.9% over the past month and surged 10.9% over the past week. SPDR S&P 500 ETF Trust SPY has lost 1.24% over the past week.

While many investors are clueless about where to park money or growing suspicious about the broader market rally, we would like to note that some specific corners of the market remain steady lately despite rising trade tensions. These areas stayed steady on their own inherent fundamentals. Below we highlight a few of them.

ETF Areas That Are Fundamentally Strong Right Now

Marijuana – AdvisorShares Pure US Cannabis ETF MSOS – Up 5.8% on Oct. 15, 2025, down 0.4% past week

Marijuana ETFs have rebounded sharply lately. The rally stemmed from renewed hopes on the legalization momentum, including likely U.S. federal rescheduling of cannabis and President Trump’s pro-CBD stance (read: From Loss to Lift-Off: Marijuana ETFs Rebound on Legalization Prospects).

Silver Miners – Amplify Junior Silver Miners ETF SILJ – Up 5.3% on Oct. 15, 2025, Up 2.3% past week

Silver has been a hot trade this year, with the silver bullion ETF iShares Silver Trust SLV gaining 79.5%.  Silver prices have gained due to their increased safe-haven appeal as well as higher industrial demand.  As mining stocks often act as leveraged plays of the underlying metal, silver mining ETFs have gained massively. The renewed trade tensions have added to the safe-haven appeal for the metal.

Gold Miners – Sprott Junior Gold Miners ETF SGDJ – Up 4.9% on Oct. 15, 2025, Up 4.9% past week

Gold prices have gained over 57% this year. The ongoing Fed rate cut momentum, surging central bank demand, especially from emerging economies, and the yellow metal’s safe-haven appeal amid trade tensions and increasing geopolitical risks have brightened the metal’s glow. The recent talks of the town – the AI bubble fear and the possible pullbacks in the markets – have also been driving some skeptical investors to gold bullion and gold miners.

Biotech – Virtus LifeSci Biotech Clinical Trials ETF BBC – Up 4.9% on Oct. 15, 2025, Up 4.6% past week

Biotech stocks are rebounding lately, thanks to the long-term growth potential helped by medical innovation. However, investing in this volatile and high-growth space demands high risk tolerance. The Fed rate cut hopes have probably been aiding the space, which needs cheaper funding. The valuation of the space is also decent. Trump’s recent drug-pricing deal with the likes of Pfizer and AstraZeneca bodes well for the biotech space.

Artificial Intelligence – Themes Generative Artificial Intelligence ETF WISE – Up 5.0% on Oct. 15, 2025, Up 0.3% past week

Who doesn’t know the rally in artificial intelligence and the massive investments ongoing in the industry? The ChatGPT-maker OpenAI has been on a dealmaking spree.  It recently inked deals with NVIDIA, AMD, Broadcom and Oracle.Other tech players, including NVIDIA, Oracle, Amazon, Google, Meta, and Microsoft are all making similar billion-dollar AI bets. The AI space has its own fundamentals and pros and cons. It is less likely to be impacted by the U.S.-China trade tensions (read: Are Big Tech ETFs Strong Enough to Weather AI Bubble Fears?).

Clean Energy – ProShares S&P Kensho Cleantech ETF CTEX – Up 5.7% on Oct. 15, 2025, Up 11.8% past week

Clean energy ETFs have surged massively this year, marking a solid comeback after years of underperformance. The ETF CTEX has gained about 134% over the past six months. The recent rally is fueled by easing U.S. policy concerns, soaring AI-driven electricity demand, an easy Fed policy and cheaper clean energy valuations.

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This article originally published on Zacks Investment Research (zacks.com).

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