Wall Street was in the green last week.Despite the tariff-led volatility, the S&P 500 and the Dow posted their best weekly performances since 2023, while the Nasdaq’s 7% weekly surge marked its strongest since 2022, as quoted on Yahoo Finance.
For the week, SPDR S&P 500 ETF Trust SPY tacked in 9.1% gains, SPDR Dow Jones Industrial Average ETF Trust DIA jumped 8.2% andthe Nasdaq-100-based ETFInvesco QQQ Trust, Series 1 QQQ advanced 11.4%.
Inside Tariff Developments
Markets experienced wild swings throughout the week, largely driven by President Trump’s rapidly shifting tariff policy. On April 9, markets saw historic gains after Trump announced a temporary 90-day pause on tariffs for around 75 countries, even as tariffs on Chinese goods were hiked to 145% (read: Semiconductors Leading Nasdaq's Bounce-Back: ETFs in Focus).
But markets tumbled on April 10, only to rebound on April 11. On April 11, China announced that it would raise tariffs on U.S. imports to 125%, up from the previously planned 84%, effective Saturday (read: US-Sino Trade War Escalates: ETF Areas Under Pressure).
Sector Winners
Despite the whiplash from tariff developments, the strongest performances of last week came from theTechnology, Industrials, and Financials sectors. Let’s dele a little deeper.
Technology – VanEck Semiconductor ETF (SMH) – Up 16.1%
The technology sector outperformed last week, with the chip stocks leading the pack. The performance of the SMH ETF deserves a special mention. Amongst the broader tech ETFs, iShares US Technology ETF IYW gained 14.5% last week, breezing past many others in the group. Cheaper valuation, chances of a dovish Fed (if the economy goes into a tailspin) and buy-the-dip strategy made the space a winner.
Industrials – First Trust RBA Amer Industrial Renaissance ETF (AIRR) – Up 11.9%
Amid the recent push for “America First” principle, industrial stocks that are the most exposed to the local economy hogged attention. The ETF AIRR measures the performance of small and mid-cap U.S. companies in the industrial and community banking sectors.
With trade tariffs roiling the global markets since the start of April, many companies would turn to America-made products, which should give rise ETFs like AIRR. The ETF may benefit from the likely emergence of industrial reshoring.
However, another specific industrial ETF gained massively last week, i.e. iShares US Aerospace & Defense ETF ITA. The ETF ITA surged 13.8% last week.
Financials – iShares US Broker-Dealers & Securities Exch ETF (IAI) – Up 10.1%
The sudden risk-on sentiments to close the week boosted the long-term bond yields, resulting in a steeper yield curve and higher interest rate margins. This is a plus for the financial and bank stocks. Since banks borrow money at short-term rates and lend capital at long-term rates, a higher long-term rate does not bode well. Moreover, if trading activities rise amid risk-on sentiments, broker-dealers ETFs like IAI should benefit.
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Invesco QQQ (QQQ): ETF Research Reports SPDR S&P 500 ETF (SPY): ETF Research Reports SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports VanEck Semiconductor ETF (SMH): ETF Research Reports iShares U.S. Aerospace & Defense ETF (ITA): ETF Research Reports iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI): ETF Research Reports First Trust RBA American Industrial Renaissance ETF (AIRR): ETF Research Reports iShares U.S. Technology ETF (IYW): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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