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The S&P 500 logged its fourth successive month of gains to close out August. Even after the late last week retreat, stocks managed to post gains for August. The S&P 500 advanced 1.5% during the month, while the Dow Jones rose 3.2%, marking the fourth successive monthly increase for both indexes, as quoted on Yahoo Finance.
The personal consumption expenditures price index showed that core inflation was a seasonally adjusted 2.9% in July, meeting estimates but higher than June, as quoted on CNBC. The persistence of inflation above the Fed’s 2% target is worrisome. The annual pace also marked the highest increase since February, as quoted on CNBC.
Consumer Sentiment Weakens
Consumer sentiment fell to a three-month low in August as tariff-related concerns about the economic outlook and inflation overpowered the sentiment, according to the University of Michigan’s closely watched survey. Respondents signaled expectations for faster inflation over the coming year.
Fed Rate Cut Bets Heighten
Despite the firmer inflation reading, bets on a rate cut in September remained strong. Traders continued to price in an 86.4% chance of a quarter-point reduction (at the time of writing), reflecting confidence that the Fed will ease monetary policy to counter a slowing labor market.
Inside Ethereum Rally
Ethereum prices jumped about 26% over the past month (as of Sept. 1, 2025). ETFs like Bitwise Ethereum Strategy ETF AETH and VanEck Ethereum ETF ETHV hovered around a 52-week high in August. Strong institutional demand mainly led to the surge. Staking yields and Layer 2 scaling are the other factors that kept Ethereum prices high in August, as quoted on tradingnews.com.
Tech Sector on Edge in August
The late part of August saw a volatile phase for the tech stocks, although the earlier part was steady. Talks of an AI bubble fear were prevalent in the market in August. OpenAI’s Sam Altman floated the talks, as quoted on CNBC. On the final day of the month, the tech-heavy Nasdaq Composite led the Wall Street pullback, due to a Big Tech rout.
NVIDIA Corp. (NVDA - Free Report) lost over 3.3% on Aug. 29, 2025. Tesla (TSLA - Free Report) shares retreated 3.5% on the day while Meta Platforms Inc. (META - Free Report) shares were down 1.7% and Amazon.com, Inc. (AMZN - Free Report) dived over 1.1%.
Marijuana
Roundhill Cannabis ETF (WEED - Free Report) – Up 83.9% Past Month
AdvisorShares Pure US Cannabis ETF (MSOS - Free Report) – Up 80.8%
Materials ETFs surged in August. Be it rare earth, lithium, gold, silver or uranium, prices of most materials gained last month. Gold and silver gained on safe-haven demand and higher industrial usage. Uranium prices have been gaining on higher nuclear demand, which is being driven by the AI boom, which requires a huge level of energy to keep the operation running. Rare Earth is also in high demand.
Healthcare
iShares US Healthcare Providers ETF (IHF - Free Report) – Up 15.7%
This ETF probably rallied on the strength of UnitedHealth Group Inc (UNH - Free Report) shares in the month. UNH gained about 29% over the past month. Berkshire acquired over 5 million UnitedHealth shares worth $1.57 billion as of June 30 (per Reuters). This piece of information boosted the stock last month and helped this UNH-heavy ETF surge. The UNH stock takes about 22.85% of the ETF.
SpaceX achieved a major milestone on Aug. 26, 2025, with the launch of its massive Starship rocket. With SpaceX’s progress, fresh IPOs, and initiatives from the several corners for the space boom, the space sector is drawing investors’ attention.
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5 Best-Performing Sector ETFs of August
The S&P 500 logged its fourth successive month of gains to close out August. Even after the late last week retreat, stocks managed to post gains for August. The S&P 500 advanced 1.5% during the month, while the Dow Jones rose 3.2%, marking the fourth successive monthly increase for both indexes, as quoted on Yahoo Finance.
The Nasdaq capped the month with a 1.6% gain, notching its fifth consecutive monthly rise and its longest winning streak in nearly a year and a half, as quoted on Yahoo Finance. Small-cap stocks also thrived, with the Russell 2000 surging about 7% for August — its fourth consecutive monthly gain and strongest streak in over four years, as mentioned in the same Yahoo Finance article.
Inflation Data Above Fed’s Target
The personal consumption expenditures price index showed that core inflation was a seasonally adjusted 2.9% in July, meeting estimates but higher than June, as quoted on CNBC. The persistence of inflation above the Fed’s 2% target is worrisome. The annual pace also marked the highest increase since February, as quoted on CNBC.
Consumer Sentiment Weakens
Consumer sentiment fell to a three-month low in August as tariff-related concerns about the economic outlook and inflation overpowered the sentiment, according to the University of Michigan’s closely watched survey. Respondents signaled expectations for faster inflation over the coming year.
Fed Rate Cut Bets Heighten
Despite the firmer inflation reading, bets on a rate cut in September remained strong. Traders continued to price in an 86.4% chance of a quarter-point reduction (at the time of writing), reflecting confidence that the Fed will ease monetary policy to counter a slowing labor market.
Inside Ethereum Rally
Ethereum prices jumped about 26% over the past month (as of Sept. 1, 2025). ETFs like Bitwise Ethereum Strategy ETF AETH and VanEck Ethereum ETF ETHV hovered around a 52-week high in August. Strong institutional demand mainly led to the surge. Staking yields and Layer 2 scaling are the other factors that kept Ethereum prices high in August, as quoted on tradingnews.com.
Tech Sector on Edge in August
The late part of August saw a volatile phase for the tech stocks, although the earlier part was steady. Talks of an AI bubble fear were prevalent in the market in August. OpenAI’s Sam Altman floated the talks, as quoted on CNBC. On the final day of the month, the tech-heavy Nasdaq Composite led the Wall Street pullback, due to a Big Tech rout.
NVIDIA Corp. (NVDA - Free Report) lost over 3.3% on Aug. 29, 2025. Tesla (TSLA - Free Report) shares retreated 3.5% on the day while Meta Platforms Inc. (META - Free Report) shares were down 1.7% and Amazon.com, Inc. (AMZN - Free Report) dived over 1.1%.
Marijuana
Roundhill Cannabis ETF (WEED - Free Report) – Up 83.9% Past Month
AdvisorShares Pure US Cannabis ETF (MSOS - Free Report) – Up 80.8%
Cannabis stocks and ETFs soared in August after reports that President Donald Trump gave hints of considering reclassifying marijuana (as quoted on the Wall Street Journal) to a less restrictive drug category. The likely move would shift marijuana from Schedule I, where it currently sits alongside heroin and cocaine, to Schedule III (as quoted on abcnews.com). This would be a beneficial step for the cannabis industry.
Digital Economy
CoinShares Bitcoin Mining ETF (WGMI - Free Report) – Up 30.7%
Bitwise Ethereum ETF ETHW – Up 23.7%
While the Ethereum ETF surged, bitcoin mining stocks gained immensely last month. Overall, the crypto space gained attention in August.
Materials
VanEck Rare Earth and Strategic Metals ETF (REMX - Free Report) – Up 27.8%
Sprott Lithium Miners ETF LITP – Up 25.7%
Sprott Active Gold & Silver Miners ETF (GBUG - Free Report) – Up 25%
Sprott Junior Uranium Miners ETF URNJ – Up 19.9%
Materials ETFs surged in August. Be it rare earth, lithium, gold, silver or uranium, prices of most materials gained last month. Gold and silver gained on safe-haven demand and higher industrial usage. Uranium prices have been gaining on higher nuclear demand, which is being driven by the AI boom, which requires a huge level of energy to keep the operation running. Rare Earth is also in high demand.
Healthcare
iShares US Healthcare Providers ETF (IHF - Free Report) – Up 15.7%
This ETF probably rallied on the strength of UnitedHealth Group Inc (UNH - Free Report) shares in the month. UNH gained about 29% over the past month. Berkshire acquired over 5 million UnitedHealth shares worth $1.57 billion as of June 30 (per Reuters). This piece of information boosted the stock last month and helped this UNH-heavy ETF surge. The UNH stock takes about 22.85% of the ETF.
Industrials
Procure Space ETF (UFO - Free Report) – Up 15%
SpaceX achieved a major milestone on Aug. 26, 2025, with the launch of its massive Starship rocket. With SpaceX’s progress, fresh IPOs, and initiatives from the several corners for the space boom, the space sector is drawing investors’ attention.