Futures off after yesterday’s Tech-led gains:
S&P futures are down 0.3% after Tuesday’s momentum-led advance. The Nasdaq gained 1.52% Tuesday, semis led again, and the SOX capped its best quarter since its 1993 inception. The setup is more cautious this morning: Asia mixed with Taiwan outperforming and South Korea down roughly 2%, Europe lower, Treasuries weaker after Tuesday’s backup in yields, dollar firmer, gold and silver under pressure, Bitcoin futures slightly higher and WTI crude down 1.5%.
The market is waiting on Warsh at Sintra, June ISM manufacturing, ADP private payrolls and May construction spending. Thursday brings June NFP, initial claims and factory orders. Consensus is looking for roughly +110K to +115K payroll growth after +172K in May. Tuesday’s data were mixed: May JOLTS beat consensus, June consumer confidence missed but improved from May’s downward revision, the labor differential weakened again, Chicago PMI slowed and home-price data were little changed.
Company news is active. MSFT is reportedly preparing job cuts impacting thousands of roles. Anthropic said Commerce removed export restrictions on its Claude Fable 5 and Mythos 5 models. BE is higher on an expanded AI infrastructure partnership with Brookfield. FDX is reportedly near a $1.4B sale of its 3P logistics business. NKE is weaker on more challenging turnaround takeaways. STZ is higher after better fiscal Q1 results and reiterated FY27 guidance. AA announced a deal to acquire South32’s bauxite, alumina and aluminum assets in Australia and Brazil for up to $5.6B. ALGN is reportedly facing an EU antitrust probe. PZZA is lower on CFO transition news. SSTK is down sharply after GETY scrapped its merger due to UK regulatory pushback.
Sector Investor Outlook
The sector tape remains momentum-led but more fragile. Tuesday’s index gains masked weak breadth, with roughly 60% of the S&P 500 lower and equal-weight S&P lagging cap-weight by more than 80 bp. Technology and Industrials were the only clean sector leadership groups. Real Estate, Consumer Staples, Utilities and Health Care were all down more than 1%, reinforcing that investors are still rewarding AI/momentum and punishing defensives/rate-sensitive groups.
Semis remain the core leadership signal. SOXX gained +4.30% Tuesday with +$245.7M of 1-day inflows and +$4.09B of 1-month inflows. SMH gained +3.78% with +$1.01B of 1-day inflows and +$2.19B of 1-month inflows. QTEC and QTUM also remain strong. That keeps the near-term sector bias tilted toward AI hardware, semicap equipment, advanced PCB, memory, data-center infrastructure and industrial automation.
The risk is that the trade is getting narrower. IGV rose Tuesday but still has -$1.33B of 1-month outflows and a -10.86% 1-month return. VGT rose +2.59% Tuesday but still has -$575.2M of 1-month outflows. Software and broader tech beta remain less confirmed than semis.
Secondary leadership is mixed. Industrials have good price confirmation through VIS, FIDU, PAVE and defense/space names, but ITA still has -$297.9M of 1-month outflows. Health Care still has strong 1-month ETF leadership through SBIO, IBB and IHF, though Tuesday’s sector action was weak. Financials are bifurcated: KBWB has +$810.1M of 1-month inflows and a +7.24% 1-month return, but larger-cap banks lagged and TFC was downgraded.
The weakest tactical groups remain Real Estate, Staples, Utilities and commodity-linked pockets. REIT flows remain strong through SCHH and VNQ, but price action deteriorated Tuesday and DLR remains a data-center valuation overhang. Materials improved at the sector level, helped by ag chemicals and select metals/mining, but gold, silver, uranium and solar remain among the weakest 1-month ETF groups. Energy remains event-sensitive, with IXC showing -$336.3M of 1-month outflows and crude back under pressure.
Previous Day Recap
US equities finished higher Tuesday. The Dow rose +0.26%, the S&P 500 gained +0.79%, the Nasdaq climbed +1.52% and the Russell 2000 added +0.46%. The S&P 500 and Nasdaq closed their best quarters in six years. Momentum led, with semis/memory, tech hardware, machinery, multis, building products, private equity and ag chemicals outperforming. Big tech was mostly higher, but equal-weight lagged badly and breadth was negative.
Treasuries sold off, with yields up 5–8 bp and the curve steepening. The dollar rose 0.1%, yen weakness remained in focus near 40-year lows, gold was little changed, silver gained 2.2%, Bitcoin futures fell 2.8% below $60K and WTI crude settled down 1.8% after Monday’s gain.
Sector leadership was narrow. Technology led at +2.55%, followed by Industrials at +1.35% and Materials at +0.55%. Consumer Discretionary was barely positive at +0.07%, while Communication Services was flat. Laggards included Real Estate -2.19%, Consumer Staples -1.50%, Utilities -1.49%, Health Care -1.31%, Energy -0.63% and Financials -0.17%.
The market message: momentum is still working, but broadening is stalling. Semis remain the best-confirmed sector trade. Defensives, REITs, Health Care and Energy failed to participate. Higher yields are starting to matter again.
Company News by GICS Sector
Communication Services: TTD (-3.1%) fell after a downgrade to sell on concerns ad agencies are reducing spending on the platform. GETY scrapped its planned merger with SSTK due to UK regulatory pushback, pressuring SSTK. Warner Bros–Paramount merger speculation faces potential UK regulatory scrutiny. META was in focus after a judge rejected its bid to dismiss state AG addiction lawsuits.
Consumer Discretionary: NKE is weaker on more challenged turnaround takeaways. JOBY (+3.4%) gained after disclosing a Toyota JV to manufacture its S4 Series eVTOL aircraft. PATK (-3.7%) fell after agreeing to combine with LCII in an all-stock merger expected to deliver roughly $150M of run-rate synergies within three years. Travel/tourism, restaurants and retail/apparel lagged Tuesday.
Consumer Staples: PM was pressured despite FDA authorization allowing Zyn to be marketed as less harmful than cigarettes. STZ is higher after better fiscal Q1 results and reiterated FY27 guidance. Food/beverage, HPCs, staples retailers and beverages lagged Tuesday, keeping VDC, FSTA, RHS and IYK under pressure.
Energy: WTI fell 1.8% Tuesday and is lower again this morning. Energy lagged despite tanker-traffic normalization and geopolitics staying on the backburner. APD (+8.0%) gained after deciding not to proceed with the Louisiana Clean Energy Complex because expected financial returns did not meet criteria. BE is higher on an expanded AI infrastructure partnership with Brookfield. IXC remains a weak flow signal with -$336.3M of 1-month outflows.
Financials: Larger-cap banks, insurers and credit cards lagged. TFC (-1.5%) fell after a downgrade to neutral, with the call focused on sustainable NII growth rather than NIM. KBWB remains a strong flow leader, with +$810.1M of 1-month inflows, but Tuesday’s sector action was not confirmatory.
Health Care: ABBV and MRK came under congressional scrutiny regarding clinical trials in China. ZBH (-5.6%) fell after agreeing to purchase the iovera pain-device business from PCRX. Managed care, pharma and MedTech lagged. QLYS (+7.2%) is a tech/cybersecurity name but traded well on AI-vulnerability discovery commentary. Health Care ETF leadership remains intact over 1 month, but Tuesday’s price action was weak.
Industrials: Industrials were a clear sector leader. AVAV (+18.8%) surged after Q4 revenue, EBITDA and EPS beat, with Precision Strike & Defensive Systems revenue up 80% y/y on Switchblade, RedDragon and Titan demand. MKSI (+6.9%) gained after initiation at outperform tied to AI hardware build-out exposure across WFE and advanced PCB. FDX is reportedly near a $1.4B sale of its 3P logistics business. Machinery, multis, building products and industrial AI exposure outperformed.
Information Technology: Semis and hardware led. SOXX, SMH, QTEC, QTUM, IXN and CQQQ were among the strongest ETF performers. MSFT is reportedly planning job cuts impacting thousands of roles. OpenAI reportedly found inference optimizations that cut model-running costs meaningfully. Anthropic launched Claude Science and had export restrictions removed from top models. FTNT (-1.2%) fell after a downgrade tied to valuation and breach-related billings risk. IGV continues to show weak 1-month flow/return confirmation despite pockets of cybersecurity strength.
Materials: Materials finished positive but remain uneven. AA announced a deal to acquire South32’s bauxite, alumina and aluminum assets in Australia and Brazil for up to $5.6B. Ag chemicals outperformed, while commodity chemicals and steel lagged. Gold, silver, uranium and solar ETFs remain weak on a 1-month basis despite Tuesday’s better sector print.
Real Estate: Real Estate was the weakest S&P sector. DLR (-5.8%) fell after agreeing to buy BX interests in three fully leased Northern Virginia data centers for $3.5B. SCHH and VNQ still show strong 1-month inflows, but Tuesday’s price action keeps the group in the “flows positive, performance lagging” bucket.
Utilities: Utilities fell sharply with other rate-sensitive defensives as yields backed up. The AI power-demand story remains a long-term support, but near-term performance is still being dictated by rates and risk appetite.
Sector ETF Tables
Latest sector and industry ETF universe. Broad-market ETFs excluded. Duplicate tickers de-duplicated. Tables are stacked vertically and pair each period’s performance with same-period flows.
Top 5 Sector ETFs — 1-Day Performance and 1-Day Flows
| ETF | Category | 1D Return | 1D Flow |
| SOXX — iShares Semiconductor ETF | Information Technology | +4.30% | +$245.7M |
| SMH — VanEck Semiconductor ETF | Information Technology | +3.78% | +$1.01B |
| CQQQ — Invesco China Technology ETF | Information Technology | +2.92% | $0 |
| QTUM — Defiance Quantum ETF | Information Technology | +2.84% | -$24.1M |
| IXN — iShares Global Tech ETF | Information Technology | +2.83% | +$21.1M |
Bottom 5 Sector ETFs — 1-Day Performance and 1-Day Flows
| ETF | Category | 1D Return | 1D Flow |
| IHI — iShares U.S. Medical Devices ETF | Health Care | -2.49% | +$10.1M |
| ICF — iShares Select U.S. REIT ETF | Real Estate | -1.93% | $0 |
| RHS — Invesco S&P 500 Equal Weight Consumer Staples ETF | Consumer Staples | -1.83% | +$915.7K |
| SCHH — Schwab U.S. REIT ETF | Real Estate | -1.78% | +$12.1M |
| IYR — iShares U.S. Real Estate ETF | Real Estate | -1.77% | -$52.1M |
Top 5 Sector ETFs — 1-Month Performance and 1-Month Flows
| ETF | Category | 1M Return | 1M Flow |
| SBIO — ALPS Medical Breakthroughs ETF | Health Care | +18.75% | N/A |
| SOXX — iShares Semiconductor ETF | Information Technology | +12.65% | +$4.09B |
| ITB — iShares U.S. Home Construction ETF | Consumer Discretionary | +12.46% | -$263.1M |
| IBB — iShares Biotechnology ETF | Health Care | +10.48% | +$299.2M |
| IHF — iShares U.S. Healthcare Providers ETF | Health Care | +10.21% | +$129.2M |
Bottom 5 Sector ETFs — 1-Month Performance and 1-Month Flows
| ETF | Category | 1M Return | 1M Flow |
| TAN — Invesco Solar ETF | Industrials | -19.99% | -$110.4M |
| GDXJ — VanEck Junior Gold Miners ETF | Materials | -17.64% | -$95.1M |
| SIL — Global X Silver Miners ETF | Materials | -17.24% | -$110.4M |
| RING — iShares MSCI Global Gold Miners ETF | Materials | -16.33% | -$127.3M |
| SILJ — Amplify Junior Silver Miners ETF | Materials | -16.14% | +$34.9M |
Top 5 Sector ETFs — 1-Month Inflows and 1-Month Performance
| ETF | Category | 1M Flow | 1M Return |
| SOXX — iShares Semiconductor ETF | Information Technology | +$4.09B | +12.65% |
| SMH — VanEck Semiconductor ETF | Information Technology | +$2.19B | +9.51% |
| QTEC — First Trust NASDAQ-100 Technology Sector Index Fund | Information Technology | +$1.08B | +4.82% |
| SCHH — Schwab U.S. REIT ETF | Real Estate | +$1.04B | +1.69% |
| VNQ — Vanguard Real Estate ETF | Real Estate | +$954.9M | +1.65% |
Top 5 Sector ETFs — 1-Month Outflows and 1-Month Performance
| ETF | Category | 1M Flow | 1M Return |
| IGV — iShares Expanded Tech-Software Sector ETF | Information Technology | -$1.33B | -10.86% |
| KWEB — KraneShares CSI China Internet ETF | Information Technology | -$812.3M | -8.45% |
| VGT — Vanguard Information Technology ETF | Information Technology | -$575.2M | -1.15% |
| IXC — iShares Global Energy ETF | Energy | -$336.3M | -6.55% |
| ITA — iShares U.S. Aerospace & Defense ETF | Industrials | -$297.9M | +3.04% |
Disclaimer: This material is for informational and educational purposes only and should not be considered investment advice, a recommendation to buy or sell any security, or a solicitation to engage in any investment strategy. ETF performance and flow data are subject to change, and past performance is not indicative of future results. Sector, industry and thematic ETF exposures may involve concentration risk, volatility, liquidity risk and other market risks. Investors should consider their own objectives, risk tolerance and time horizon and consult a qualified financial professional before making investment decisions.
Data sourced from FactSet Research Systems Inc.
