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Wall Street was upbeat last week. The Dow Jones Industrial Average attained a historic landmark, reaching a record high last week, thanks to the Federal Reserve's dovish stance and tone. This marked the end of an amazing week for U.S. stocks, as they closed their longest winning streak since 2017.
Key indexes ended their seventh successive week of gains. The S&P 500 was up 2.5%, the Dow Jones added 2.9%, the Nasdaq jumped 2.9% and the Russell 2000 surged 5.6%.
Shift in Fed’s Tone Sparks Market Rally
The financial markets celebrated the Federal Reserve's change in its outlook during the week. The central bank hinted at a higher number of anticipated rate cuts (by about 75 bps) in 2024 than previously predicted and acknowledged the effectiveness of its anti-inflation campaign (read: Sector ETFs to Gain as Fed Stays Put, Sees Deeper Rate Cuts in 2024).
Meanwhile, the annual inflation rate in the United States slowed to 3.1% in November 2023, the lowest reading in five months, from 3.2% in October and in line with market forecasts. Compared to the previous month, consumer prices edged 0.1% higher, compared to expectations of a flat reading, and after being unchanged in October (read: 4 Sector ETFs to Win Despite Slowing November Inflation Data).
All these developments fueled a strong rally in U.S. stocks. However, while the market rejoiced over the Fed's stance, some experts highlighted the need for caution. New York Fed President John Williams, in an interview with CNBC, warned that discussions of rate cuts might be "premature," as quoted n Yahoo Finance.
Positive Week for Oil: First Weekly Win Since October
In the world of commodities, oil experienced its first weekly gain since October. West Texas Intermediate futures settled just below $72 per barrel, while Brent crude futures traded at about $77 per barrel. Oil prices had gained by more than 4% over the previous two sessions, primarily due to a softening in the U.S. dollar. United States Oil ETF (USO - Free Report) gained 1.1% last week.
Gold Glittered
Gold prices remained strong throughout the week, finishing above $2,000 per ounce after reaching a record high earlier in the week. SPDR Gold Trust (GLD - Free Report) was up 1.4% last week.
Winning ETFs in Focus
Against this backdrop, below we highlight a few top-performing ETFs of last week.
Palladium logged its biggest gain since March 2020 as the UK government targeted Russian metals with new sanctions. The metal is mainly used in catalytic converters. Notably, Russia a key producer of Palladium.
An agreement was reached by 118 countries in early December in COP 28 to triple renewable power generation to 11,000 GW and double energy efficiency this decade. Fifty oil and gas companies pledged to achieve near zero-methane emissions by 2030 and net zero greenhouse gas emissions from their operations by 2050. All these factors contributed to the leg-up in clean energy ETFs.
The shipping industry often reacts to various global economic factors, including trade policies, global demand for shipping services, and changes in supply chain dynamics. As the Global economic growth is gaining momentum and the Fed is offering tone, expectations for more activities are expected. The holiday season buying activities are also in full form. All these factors boosted the shipping last week.
Semiconductors
Invesco Semiconductors ETF (PSI - Free Report) – Up 9.8%
First Trust Nasdaq Semiconductor ETF (FTXL - Free Report) – Up 9.8%
The U.S. semiconductor space rallied following the announcement of the initial grant under the CHIPS and Science Act of 2022 by the White House, signaling a potential growth opportunity for investors. BAE Systems is set to receive $35 million for upgrading its New Hampshire factory, underscoring the government's focus on chips pivotal for national security, including those in F-35 jets (read: Semiconductor ETFs Surge on First US CHIPS Act Grant).
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Top-Performing ETFs of Last Week
Wall Street was upbeat last week. The Dow Jones Industrial Average attained a historic landmark, reaching a record high last week, thanks to the Federal Reserve's dovish stance and tone. This marked the end of an amazing week for U.S. stocks, as they closed their longest winning streak since 2017.
Key indexes ended their seventh successive week of gains. The S&P 500 was up 2.5%, the Dow Jones added 2.9%, the Nasdaq jumped 2.9% and the Russell 2000 surged 5.6%.
Shift in Fed’s Tone Sparks Market Rally
The financial markets celebrated the Federal Reserve's change in its outlook during the week. The central bank hinted at a higher number of anticipated rate cuts (by about 75 bps) in 2024 than previously predicted and acknowledged the effectiveness of its anti-inflation campaign (read: Sector ETFs to Gain as Fed Stays Put, Sees Deeper Rate Cuts in 2024).
Meanwhile, the annual inflation rate in the United States slowed to 3.1% in November 2023, the lowest reading in five months, from 3.2% in October and in line with market forecasts. Compared to the previous month, consumer prices edged 0.1% higher, compared to expectations of a flat reading, and after being unchanged in October (read: 4 Sector ETFs to Win Despite Slowing November Inflation Data).
All these developments fueled a strong rally in U.S. stocks. However, while the market rejoiced over the Fed's stance, some experts highlighted the need for caution. New York Fed President John Williams, in an interview with CNBC, warned that discussions of rate cuts might be "premature," as quoted n Yahoo Finance.
Positive Week for Oil: First Weekly Win Since October
In the world of commodities, oil experienced its first weekly gain since October. West Texas Intermediate futures settled just below $72 per barrel, while Brent crude futures traded at about $77 per barrel. Oil prices had gained by more than 4% over the previous two sessions, primarily due to a softening in the U.S. dollar. United States Oil ETF (USO - Free Report) gained 1.1% last week.
Gold Glittered
Gold prices remained strong throughout the week, finishing above $2,000 per ounce after reaching a record high earlier in the week. SPDR Gold Trust (GLD - Free Report) was up 1.4% last week.
Winning ETFs in Focus
Against this backdrop, below we highlight a few top-performing ETFs of last week.
Palladium
abrdn Physical Palladium Shares ETF (PALL - Free Report) – Up 24.4%
Palladium logged its biggest gain since March 2020 as the UK government targeted Russian metals with new sanctions. The metal is mainly used in catalytic converters. Notably, Russia a key producer of Palladium.
Clean Energy
ProShares S&P Kensho Cleantech ETF (CTEX - Free Report) – Up 14.3%
ALPS Clean Energy ETF (ACES - Free Report) – Up 13.1%
An agreement was reached by 118 countries in early December in COP 28 to triple renewable power generation to 11,000 GW and double energy efficiency this decade. Fifty oil and gas companies pledged to achieve near zero-methane emissions by 2030 and net zero greenhouse gas emissions from their operations by 2050. All these factors contributed to the leg-up in clean energy ETFs.
Transportation & Shipping
Breakwave Dry Bulk Shipping ETF (BDRY - Free Report) – Up 14.02%
The shipping industry often reacts to various global economic factors, including trade policies, global demand for shipping services, and changes in supply chain dynamics. As the Global economic growth is gaining momentum and the Fed is offering tone, expectations for more activities are expected. The holiday season buying activities are also in full form. All these factors boosted the shipping last week.
Semiconductors
Invesco Semiconductors ETF (PSI - Free Report) – Up 9.8%
First Trust Nasdaq Semiconductor ETF (FTXL - Free Report) – Up 9.8%
The U.S. semiconductor space rallied following the announcement of the initial grant under the CHIPS and Science Act of 2022 by the White House, signaling a potential growth opportunity for investors. BAE Systems is set to receive $35 million for upgrading its New Hampshire factory, underscoring the government's focus on chips pivotal for national security, including those in F-35 jets (read: Semiconductor ETFs Surge on First US CHIPS Act Grant).