Wall Street saw a major comeback in the three broad market indices as easing commodity prices gave some relief amid the war crisis. The Dow Jones Industrial Average found its way out of the correction territory after gaining 653.61 points on Mar 9. The S&P 500 index also witnessed its best day since June 2020 after gaining 2.6%. The tech-heavy Nasdaq Composite too jumped out of the bear market territory with a 3.6% rise while seeing its best day since November 2020.
The Russia-Ukraine war led to a massive rise in commodity prices as Moscow, in particular, stands as a major agricultural, metal and oil exporter. Although the war still continues, Mar 9 saw easing prices of commodities like oil, wheat futures, silver, copper and platinum. Notably, yesterday’s rebound rally is largely a result of softening commodity prices. In fact, the international benchmark, Brent crude, also saw its major one-day fall since April 2020 by declining around 13% to $111.1 per barrel.
Commenting on the current market situation, Ross Mayfield, investment strategy analyst at Baird has also commented that “The strength of the U.S. labor market, consumer and aggregate corporate sector should act as the weight to keep us out of recession near-term. Overall, volatility is likely to persist, [there’s a] wide range of outcomes possible in Ukraine, but the fundamentals of the U.S. economy still look decent, especially if the Fed can navigate raising rates without breaking demand,” per a CNBC article.
The U.S. economic fundamentals have been staying strong. Despite disappointing U.S. consumer sentiment levels, consumer spending has remained robust. In fact, a recent report highlighted that inflation-adjusted expenditure surged the maximum in January in 10 months (per a BloombergQuint article). Moreover, the labor market continues to improve. According to the Bureau of Labor Statistics, the U.S. economy added 678,000 jobs in February, beating economists’ expectations of 440,000 (per Dow Jones). The unemployment rate also dropped to 3.8%.
Going on, the Institute of Supply Management (ISM) has reported that its manufacturing index for February rose to 58.6% from 57.7% in January, beating the consensus estimate of 57.7%. This marked the 21st successive month of growth for the U.S. manufacturing industry.
ETFs to Ride the Tide
Investors who seek to capitalize on the strong trends should consider the following ETFs:
SPDR S&P 500 ETF Trust ( SPY Quick Quote SPY - Free Report)
SPDR S&P 500 ETF Trust seeks to provide investment results that before expenses generally correspond to the price and the yield performance of the S&P 500 Index.
SPDR S&P 500 ETF Trust has a total expense ratio of 0.09%, with AUM of $381.29 billion.
iShares Core S&P 500 ETF ( IVV Quick Quote IVV - Free Report)
iShares Core S&P 500 ETF seeks to track the investment results of an index composed of large-capitalization U.S. equities.
iShares Core S&P 500 ETF has AUM of $302.96 billion and total expense ratio is 0.03%.
SPDR Dow Jones Industrial Average ETF Trust ( DIA Quick Quote DIA - Free Report)
SPDR Dow Jones Industrial Average ETF Trust seeks to provide investment results that before expenses generally correspond to the price and the yield performance of the Dow Jones Industrial Average.
SPDR Dow Jones Industrial Average ETF Trust charges an expense ratio of 0.16%, with AUM of $27.83 billion.
Invesco QQQ ( QQQ Quick Quote QQQ - Free Report)
Invesco QQQ provides exposure to the largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq-100 Index.
Invesco QQQ has AUM of $173.26 billion and charges investors 20 bps in annual fees.
Fidelity Nasdaq Composite Index ETF ( ONEQ Quick Quote ONEQ - Free Report)
Fidelity Nasdaq Composite Index ETF seeks to provide investment returns that closely correspond to the price and yield performance of the Nasdaq Composite Index.
Fidelity Nasdaq Composite Index ETF has AUM of $4.03 billion and the expense ratio comes in at 0.21% (read:
Guide to the Nasdaq ETF Investing).