Best-Performing ETFs of Last Week

Wall Street saw a subdued performance last week, with the S&P 500 up 0.3% and Nasdaq 100 up 1%, largely propelled by a tech rally that added $420 billion to sector market cap, led by Alphabet's 11.6% surge following a favorable U.S. antitrust outcome. Concurrently, August U.S. job growth significantly decelerated to 22,000, reinforcing labor market softness and strengthening expectations for a September Fed rate cut, now at an 89% probability for a 25-basis-point reduction. This macro environment, coupled with specific sector catalysts like lithium supply concerns and lower cost of capital for biotech, drove notable gains in ETFs tracking tanker shipping, precious metals miners, lithium, and biotech.

Analysis

The market exhibited a divergent performance last week, with the tech-heavy Nasdaq 100 gaining 1.0% while the Dow Jones declined 0.3%, indicating a preference for specific growth segments over the broader market. This dynamic was primarily fueled by two factors: a significant rally in mega-cap technology and strengthening expectations for a near-term Federal Reserve rate cut. The tech sector added $420 billion in market capitalization, led by an 11.6% surge in Alphabet (GOOGL) after a favorable U.S. court ruling on its search deal with Apple mitigated concerns over a separate $3.45 billion EU fine. This rally was further supported by a sharply decelerating labor market, as the U.S. added only 22,000 jobs in August against a forecast of 75,000 and prior months were revised down by a net 21,000 jobs. Consequently, the market is pricing in an 89% probability of a 25-basis-point Fed rate cut in September. This macroeconomic backdrop created distinct winners, with rate-sensitive and supply-constrained sectors outperforming. ETFs tracking silver miners (SLVP, +10.5%) and lithium (LIT, +6.4%) rallied on reports of structural supply deficits and production suspensions, respectively, while biotech ETFs (BBC, +6.1%) gained on the prospect of lower financing costs in a reduced-rate environment.

Key Decisions for Investors

• Investors should consider maintaining or increasing exposure to resilient mega-cap technology stocks, as demonstrated by Alphabet's 11.6% rally on a favorable antitrust outcome, which highlights the sector's ability to drive performance even in a subdued market.
• With an 89% probability of a September Fed rate cut, it is prudent to evaluate positions in rate-sensitive assets, including biotech ETFs like BBC that benefit from lower capital costs and precious metals miners such as GOEX and SLVP that gain from a lower-rate environment.
• Actively monitor commodity supply chains for disruption-driven opportunities; the 6.4% gain in the lithium ETF (LIT) following a mine suspension in China underscores how specific supply shocks can create significant, targeted investment theses independent of broader market trends.