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Wall Street has been on a wild ride in recent weeks, witnessing the wipeout of a staggering $3.5 trillion from the market capitalization in 14 days. According to CompaniesMarketCap data, the total market capitalization of U.S. stocks plunged from $62.2 trillion as of Feb. 19 to $58.7 trillion as of March 7. The loss amount is greater than the GDP of the United Kingdom and roughly equal to Apple’s (AAPL - Free Report) market value or the combined worth of Meta (META - Free Report) , Tesla (TSLA - Free Report) and Netflix (NFLX - Free Report) .
The beaten-down prices offer a solid buying opportunity for investors. We have highlighted five ETFs from different corners that have declined over the past month but have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). These products, namely, Invesco Dorsey Wright Technology Momentum ETF (PTF - Free Report) , ProShares Big Data Refiners ETF (DAT - Free Report) , First Trust RBA American Industrial Renaissance ETF (AIRR - Free Report) , iShares Russell Mid-Cap Growth ETF (IWP - Free Report) and Invesco S&P 500 Pure Growth ETF (RPG - Free Report) are poised to outperform when the market resumes its uptrend.
What’s Driving the Sell-Off?
Tariff War: One of the biggest reasons for the market slump is the tariff war. President Donald Trump has announced multiple tariffs, and many countries have retaliated or are preparing to hit back, which might lead to a global trade war (read: Volatility ETFs Spike on Growing Trade War Fears).
Slowing Economy: The barrage of data indicates that the U.S. economy is slowing down. The Federal Reserve’s Beige Book and the Institute for Supply Management’s manufacturing reading indicated fear of rising input costs, weighed down by Trump's tariff policies. The manufacturing sector slowed down and business activity stalled in February. Consumers are losing confidence in the economy and U.S. job growth is slowing down.
Inflationary Pressure: The ongoing tariff talks have sparked fears of a resurgence in inflationary pressure and could slow down economic growth. Currently, inflation remains at an elevated level. After a period of decline, inflation picked up in January, fueled by higher grocery, gasoline and rent prices. Consumers' 12-month inflation expectations deteriorated to 4.3%, the highest reading since November 2023, from 3.3% in January.
Why Should You Buy the Dip?
It seems that the President is using tariffs to address trade inequities and encourage domestic manufacturing and investment. Trump had promised to lower inflation and spur growth with tax and regulatory cuts.
Additionally, the slowing economy can compel the Fed to resume rate cuts soon. The odds of a June Fed interest rate cut have increased following the release of the February jobs report. The market is again pricing in three rate cuts for this year (read: Low-Beta ETFs to Hedge Against Trade War Risks).
Further, the boom in AI will continue to fuel growth. Significant investments in AI and related technologies have spurred optimism about future productivity gains and economic expansion. Companies are allocating substantial capital toward AI, anticipating long-term benefits that justify current valuations.
As such, investors may view the recent slump as a buying opportunity, provided they have the patience for extreme volatility in the near term.
Invesco Dorsey Wright Technology Momentum ETF offers exposure to 45 tech companies that are showing relative strength (momentum) by tracking the Dorsey Wright Technology Technical Leaders Index. It is relatively illiquid and unpopular, with AUM of $494.2 million. Invesco DWA Technology Momentum ETF charges 60 bps in annual fees and has a Zacks ETF Rank #1.
ProShares Big Data Refiners ETF (DAT - Free Report) – Down 14.7%
ProShares Big Data Refiners ETF invests in companies that help businesses process massive amounts of data to draw competitive insights. It tracks the FactSet Big Data Refiners Index and holds 31 stocks in its basket. ProShares Big Data Refiners ETF has amassed $6.5 million in its asset base and charges 58 bps in annual fees. It has a Zacks ETF Rank #2 (read: Time to Buy the Dip in Palantir Stock With These ETFs?).
First Trust RBA American Industrial Renaissance ETF (AIRR - Free Report) – Down 13%
First Trust RBA American Industrial Renaissance ETF offers exposure to small and mid-cap securities in the industrial and community banking sectors by tracking the Richard Bernstein Advisors American Industrial Renaissance Index. It holds 52 stocks in its basket and charges 70 bps in annual fees. First Trust RBA American Industrial Renaissance ETF has $3.3 billion in AUM and has a Zacks ETF Rank #2.
iShares Russell Mid-Cap Growth ETF (IWP - Free Report) – Down 12.2%
With AUM of $17.1 billion, iShares Russell Mid-Cap Growth ETF offers exposure to mid-sized U.S. companies whose earnings are expected to grow at an above-average rate relative to the market by tracking the Russell MidCap Growth Index. It holds 288 securities in its basket. iShares Russell Mid-Cap Growth ETF charges 23 bps in annual fees and has a Zacks ETF Rank #2.
Invesco S&P 500 Pure Growth ETF (RPG - Free Report) – Down 11.1%
Invesco S&P 500 Pure Growth ETF offers exposure to the companies that exhibit strong growth characteristics in the S&P 500 Index. It tracks the S&P 500 Pure Growth Index and holds 89 stocks in its basket. Invesco S&P 500 Pure Growth ETF has amassed $1.6 billion in its asset base and charges 35 bps in fees a year from investors. It has a Zacks ETF Rank #2.
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5 Beaten-Down ETFs to Buy Now
Wall Street has been on a wild ride in recent weeks, witnessing the wipeout of a staggering $3.5 trillion from the market capitalization in 14 days. According to CompaniesMarketCap data, the total market capitalization of U.S. stocks plunged from $62.2 trillion as of Feb. 19 to $58.7 trillion as of March 7. The loss amount is greater than the GDP of the United Kingdom and roughly equal to Apple’s (AAPL - Free Report) market value or the combined worth of Meta (META - Free Report) , Tesla (TSLA - Free Report) and Netflix (NFLX - Free Report) .
The beaten-down prices offer a solid buying opportunity for investors. We have highlighted five ETFs from different corners that have declined over the past month but have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). These products, namely, Invesco Dorsey Wright Technology Momentum ETF (PTF - Free Report) , ProShares Big Data Refiners ETF (DAT - Free Report) , First Trust RBA American Industrial Renaissance ETF (AIRR - Free Report) , iShares Russell Mid-Cap Growth ETF (IWP - Free Report) and Invesco S&P 500 Pure Growth ETF (RPG - Free Report) are poised to outperform when the market resumes its uptrend.
What’s Driving the Sell-Off?
Tariff War: One of the biggest reasons for the market slump is the tariff war. President Donald Trump has announced multiple tariffs, and many countries have retaliated or are preparing to hit back, which might lead to a global trade war (read: Volatility ETFs Spike on Growing Trade War Fears).
Slowing Economy: The barrage of data indicates that the U.S. economy is slowing down. The Federal Reserve’s Beige Book and the Institute for Supply Management’s manufacturing reading indicated fear of rising input costs, weighed down by Trump's tariff policies. The manufacturing sector slowed down and business activity stalled in February. Consumers are losing confidence in the economy and U.S. job growth is slowing down.
Inflationary Pressure: The ongoing tariff talks have sparked fears of a resurgence in inflationary pressure and could slow down economic growth. Currently, inflation remains at an elevated level. After a period of decline, inflation picked up in January, fueled by higher grocery, gasoline and rent prices. Consumers' 12-month inflation expectations deteriorated to 4.3%, the highest reading since November 2023, from 3.3% in January.
Why Should You Buy the Dip?
It seems that the President is using tariffs to address trade inequities and encourage domestic manufacturing and investment. Trump had promised to lower inflation and spur growth with tax and regulatory cuts.
Additionally, the slowing economy can compel the Fed to resume rate cuts soon. The odds of a June Fed interest rate cut have increased following the release of the February jobs report. The market is again pricing in three rate cuts for this year (read: Low-Beta ETFs to Hedge Against Trade War Risks).
Further, the boom in AI will continue to fuel growth. Significant investments in AI and related technologies have spurred optimism about future productivity gains and economic expansion. Companies are allocating substantial capital toward AI, anticipating long-term benefits that justify current valuations.
As such, investors may view the recent slump as a buying opportunity, provided they have the patience for extreme volatility in the near term.
ETFs to Buy
Invesco Dorsey Wright Technology Momentum ETF (PTF - Free Report) – Down 19.2%
Invesco Dorsey Wright Technology Momentum ETF offers exposure to 45 tech companies that are showing relative strength (momentum) by tracking the Dorsey Wright Technology Technical Leaders Index. It is relatively illiquid and unpopular, with AUM of $494.2 million. Invesco DWA Technology Momentum ETF charges 60 bps in annual fees and has a Zacks ETF Rank #1.
ProShares Big Data Refiners ETF (DAT - Free Report) – Down 14.7%
ProShares Big Data Refiners ETF invests in companies that help businesses process massive amounts of data to draw competitive insights. It tracks the FactSet Big Data Refiners Index and holds 31 stocks in its basket. ProShares Big Data Refiners ETF has amassed $6.5 million in its asset base and charges 58 bps in annual fees. It has a Zacks ETF Rank #2 (read: Time to Buy the Dip in Palantir Stock With These ETFs?).
First Trust RBA American Industrial Renaissance ETF (AIRR - Free Report) – Down 13%
First Trust RBA American Industrial Renaissance ETF offers exposure to small and mid-cap securities in the industrial and community banking sectors by tracking the Richard Bernstein Advisors American Industrial Renaissance Index. It holds 52 stocks in its basket and charges 70 bps in annual fees. First Trust RBA American Industrial Renaissance ETF has $3.3 billion in AUM and has a Zacks ETF Rank #2.
iShares Russell Mid-Cap Growth ETF (IWP - Free Report) – Down 12.2%
With AUM of $17.1 billion, iShares Russell Mid-Cap Growth ETF offers exposure to mid-sized U.S. companies whose earnings are expected to grow at an above-average rate relative to the market by tracking the Russell MidCap Growth Index. It holds 288 securities in its basket. iShares Russell Mid-Cap Growth ETF charges 23 bps in annual fees and has a Zacks ETF Rank #2.
Invesco S&P 500 Pure Growth ETF (RPG - Free Report) – Down 11.1%
Invesco S&P 500 Pure Growth ETF offers exposure to the companies that exhibit strong growth characteristics in the S&P 500 Index. It tracks the S&P 500 Pure Growth Index and holds 89 stocks in its basket. Invesco S&P 500 Pure Growth ETF has amassed $1.6 billion in its asset base and charges 35 bps in fees a year from investors. It has a Zacks ETF Rank #2.