U.S. stocks rebounded sharply on Monday, staging a comeback from last week’s sell-off driven by weak labor market data and escalating trade tensions. The S&P 500 rose 1.5%, while the Dow Jones jumped 1.3%, marking one of its strongest days in months. The Nasdaq Composite Index outperformed, gaining 1.9% and recording its best daily performance since May.
Stronger-than-expected earnings from major corporations, including Tyson Foods (TSN), upbeat economic data and growing Fed rate cut speculation helped boost investor confidence (read: Nasdaq ETF (QQQM) Hits New 52-Week High).
Tech stocks fueled much of the momentum. NVIDIA (NVDA) rallied 3.6%, while Meta (META) and Microsoft (MSFT) hit all-time highs, climbing 3.5% and 2.2%, respectively. The tech-heavy Invesco QQQ QQQ rose 1.8%.
We have highlighted five ETFs from the sector that led the rally. These include VanEck Vectors Digital Transformation ETF DAPP, iShares Blockchain and Tech ETF IBLC, ARK Autonomous Technology & Robotics ETF ARKQ and Global X Social Media Index ETF SOCL.
The weak job data has increased speculation of a rate cut in September. According to CME Group's FedWatch Tool, the chances of a quarter-point rate cut in September have jumped to 91.9% from 63.1% a week ago.
Further, trade tensions are back in the spotlight. Trump’s new tariffs, ranging from 10%-41%, are set to fully kick in this week, stoking fears of renewed inflationary pressure. On Monday, President Trump announced plans to substantially raise tariffs on India, accusing the country of indirectly funding Russia’s war in Ukraine by purchasing Russian oil.
AI Momentum: The generative AI wave continues to be the tech sector and the overall stock market’s growth engine. Demand for data centers, GPUs, AI-focused software, and automation tools is driving investor enthusiasm across the board. Tech companies have poured billions into data centers and AI chips to support the growth of AI models.
Rate Cut Hopes Add Fuel: Lower interest rates benefit high-growth tech stocks, which are more sensitive to borrowing costs (read: Defensive ETFs to Gain Attention Amid Soft Jobs Data?).
Strong Earnings: The technology sector is among the major growth drivers for the second-quarter earnings season and beyond.
Promising Outlook: The global digital shift has accelerated e-commerce across various sectors, including remote working, entertainment, and shopping, thereby strengthening the sector. The rapid adoption of cloud computing, big data, the Internet of Things, wearables, VR headsets, drones, virtual reality, machine learning, digital communication, blockchain and 5G technology will continue to fuel a rally.
Even though new tariffs were on the table, software and cloud firms were deemed “safer” due to less physical supply chain exposure.
VanEck Vectors Digital Transformation ETF (DAPP) – Up 4.4%
VanEck Vectors Digital Transformation ETF aims to offer exposure to companies that are at the forefront of digital asset transformation, such as digital asset exchanges, payment gateways, digital asset mining operations, software services, equipment and technology or services to the digital asset operations, digital asset infrastructure businesses or companies facilitating commerce with the use of digital assets. VanEck Vectors Digital Transformation ETF tracks the MVIS Global Digital Assets Equity Index and holds 23 securities in its basket. It charges 51 bps in annual fees and trades in an average daily volume of 613,000. DAPP has accumulated $274.3 million in its asset base.
iShares Blockchain and Tech ETF (IBLC) – Up 4%
iShares Blockchain and Tech ETF seeks exposure to a wide variety of companies that are involved in the development, innovation and utilization of blockchain and crypto technologies. It follows the NYSE FactSet Global Blockchain Technologies Index and holds 36 stocks in its basket. iShares Blockchain and Tech ETF has gathered $50.6 million in its asset base and charges 47 bps in annual fees. It trades in a volume of 19,000 shares per day on average.
ARK Autonomous Technology & Robotics ETF (ARKQ) – Up 3.6%
ARK Autonomous Technology & Robotics ETF is an actively managed ETF seeking long-term capital appreciation by investing in companies that benefit from the development of products or services, and technological improvement and advancements in scientific research related to energy, automation and manufacturing, materials, and transportation. This approach results in a basket of 35 stocks. ARK Autonomous Technology & Robotics ETF has accumulated $1.2 billion in its asset base and charges 75 bps in fees per year. It trades in a volume of 19,000 shares a day on average.
Global X Social Media Index ETF (SOCL) – Up 3.5%
Global X Social Media Index ETF provides investors access to social media companies around the world and tracks the Solactive Social Media Total Return Index. It holds 50 securities in the basket. Global X Social Media Index ETF charges 0.65% in annual fees and sees lower trading volumes of roughly 12,000 shares a day. The fund has AUM of $143.5 million and has a Zacks ETF Rank #2 (Buy) (read: 5 Top-Ranked ETFs of 1H25 Poised to Stay Strong in 2H).
