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Wall Street has offered mixed returns in the third quarter of the year, with the S&P 500 offering about 5.3% gains, the Nasdaq-100 also delivering about 5% gains, the Dow Jones losing about 0.1%, and the small-cap index Russell 2000 falling by 5.7%.
The quarter was all about the AI and tech story, and the revival in cryptocurrencies. Inflation worries and a sharp rise in Treasury bond yields have been notable in Q3. iShares 20+ Year Treasury Bond ETF (TLT - Free Report) is off about 8% in Q3 as the bond funds bled due to rising yields. U.S. benchmark bond yields hit a 20-year high.
Fed Rate Hike
The Fed has enacted a 25-bp rate hike in September to contain accelerating inflation.With the economy operating near full employment, Fed chair Warsh said that the Fed could address inflation without weakening economic growth or the labor market.
Policymakers raised their inflation forecast. The Fed’s updated Summary of Economic Projections points to an additional rate hike in 2026 (read: 4 Bond ETFs to Gain from Fed Rate Hike).
Oil Remains Hot
United States Brent Oil Fund LP (BNO - Free Report) has added about 50% in Q3, with about a 15% one-month gain. Tensions in the Strait of Hormuz remain in place as the Iran war drags on. Although there were claims that oil shipments hit a six-month high, energy prices showed no signs of cooling (read: Hormuz Oil Shipments Hit Six-Month High? ETFs to Win/Lose).
AI Safety Concerns Surge With Memory Crisis in Place
Two developments in the AI arena have been mention-worthy. There have been growing concerns over the pace of AI development, and this has prompted calls from major tech leaders, including Anthropic CEO Dario Amodei, for a more measured approach to AI advancement (read: AI Safety Concerns Surge: ETFs to Watch as Tech Faces New Risks).
On the other hand, speaking at an industry event, Intel CEO Lip-Bu Tan recently said that memory has already emerged as a major constraint for the semiconductor industry and warned that the situation could worsen in 2027, as reported by Yahoo Finance. With the AI boom still in place, the demand for memory is heightened (read: What Lies Ahead of DRAM ETF as Memory Crisis May Intensify in 2027?).
Cryptocurrency
The third quarter can easily be attributed to the rebound in cryptocurrencies. From Solana to Ethereum and from Bitcoin to Dogecoin, all cryptocurrencies marked a substantial rebound in Q3.
Chainlink ETFs like the Grayscale Chainlink Trust ETF (GLNK - Free Report) are surging and drawing fresh institutional capital due to expanding spot inflows, a growing role in tokenized finance, and strong underlying infrastructure adoption. GLNK almost doubled in Q3, while it surged 16.9% over the past month and was up 6.7% last week.
Bitwise Solana Staking ETF (BSOL - Free Report) is up 87% so far in Q3, while it added about 12% over the past month. Grayscale Ethereum Staking Mini ETF (ETH - Free Report) is up about 74%,Bitwise XRP ETF (XRP - Free Report) has gained about 52%, while CoinShares Bitcoin and Ether ETF (BTF - Free Report) has advanced about 52%. iShares Bitcoin Trust ETF (IBIT - Free Report) has gained about 42%.
Rate-Hedge ETFs
The interest rate hedge corner of the market has been an area to watch as Treasury yields climb and investors brace for a potentially more hawkish Fed. The 10-year Treasury yield recently rose to its highest level since 2007, following hawkish Fed commentary and stronger-than-expected economic data.
As a result, Simplify Interest Rate Hedge ETF (PFIX - Free Report) gained 40% in Q3 as it looks to hedge interest rate movements arising from rising long-term interest rates, while providing the potential for income. PFIX has a dividend yield of 6.45% and charges 0.50% in annual fees. The fund is up 16% over the past month and has surged 10% over the past week.
Cybersecurity
WisdomTree Cybersecurity Fund (WCBR - Free Report) has added about 37% in Q3 and has been up 3.7% over the past month and 1.8% over the past week. Rising AI safety concerns are acting as a tailwind for cybersecurity stocks.
As mentioned on CNBC, CrowdStrike CEO George Kurtz pointed out that the need for cybersecurity will not diminish simply because AI development slows, as potentially dangerous models are already being used. He also stressed the growing importance of using AI to combat AI-driven cyber threats (read: Time to Boost Cybersecurity ETF Exposure as AI Safety Concerns Rise).
Genomics
ARK Genomic Revolution ETF (ARKG - Free Report) has jumped about 33% in Q3, added 7% over the past month and about 1% last week, indicating the fund is in high momentum.
ARKG is surging because genomics and biotech have entered a powerful risk on phase in 2026, and the fund’s exposure to CRISPR/gene editing, multi omics, and molecular diagnostics has been gaining investors’ love currently.
A slew of positive clinical data and regulatory progress for CRISPR based and other gene editing therapies has acted as a positive for the fund.
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4 Best ETF Areas of Q3 That Are in High Momentum
Key Takeaways
Wall Street has offered mixed returns in the third quarter of the year, with the S&P 500 offering about 5.3% gains, the Nasdaq-100 also delivering about 5% gains, the Dow Jones losing about 0.1%, and the small-cap index Russell 2000 falling by 5.7%.
The quarter was all about the AI and tech story, and the revival in cryptocurrencies. Inflation worries and a sharp rise in Treasury bond yields have been notable in Q3. iShares 20+ Year Treasury Bond ETF (TLT - Free Report) is off about 8% in Q3 as the bond funds bled due to rising yields. U.S. benchmark bond yields hit a 20-year high.
Fed Rate Hike
The Fed has enacted a 25-bp rate hike in September to contain accelerating inflation.With the economy operating near full employment, Fed chair Warsh said that the Fed could address inflation without weakening economic growth or the labor market.
Policymakers raised their inflation forecast. The Fed’s updated Summary of Economic Projections points to an additional rate hike in 2026 (read: 4 Bond ETFs to Gain from Fed Rate Hike).
Oil Remains Hot
United States Brent Oil Fund LP (BNO - Free Report) has added about 50% in Q3, with about a 15% one-month gain. Tensions in the Strait of Hormuz remain in place as the Iran war drags on. Although there were claims that oil shipments hit a six-month high, energy prices showed no signs of cooling (read: Hormuz Oil Shipments Hit Six-Month High? ETFs to Win/Lose).
AI Safety Concerns Surge With Memory Crisis in Place
Two developments in the AI arena have been mention-worthy. There have been growing concerns over the pace of AI development, and this has prompted calls from major tech leaders, including Anthropic CEO Dario Amodei, for a more measured approach to AI advancement (read: AI Safety Concerns Surge: ETFs to Watch as Tech Faces New Risks).
On the other hand, speaking at an industry event, Intel CEO Lip-Bu Tan recently said that memory has already emerged as a major constraint for the semiconductor industry and warned that the situation could worsen in 2027, as reported by Yahoo Finance. With the AI boom still in place, the demand for memory is heightened (read: What Lies Ahead of DRAM ETF as Memory Crisis May Intensify in 2027?).
Cryptocurrency
The third quarter can easily be attributed to the rebound in cryptocurrencies. From Solana to Ethereum and from Bitcoin to Dogecoin, all cryptocurrencies marked a substantial rebound in Q3.
Chainlink ETFs like the Grayscale Chainlink Trust ETF (GLNK - Free Report) are surging and drawing fresh institutional capital due to expanding spot inflows, a growing role in tokenized finance, and strong underlying infrastructure adoption. GLNK almost doubled in Q3, while it surged 16.9% over the past month and was up 6.7% last week.
Bitwise Solana Staking ETF (BSOL - Free Report) is up 87% so far in Q3, while it added about 12% over the past month. Grayscale Ethereum Staking Mini ETF (ETH - Free Report) is up about 74%,Bitwise XRP ETF (XRP - Free Report) has gained about 52%, while CoinShares Bitcoin and Ether ETF (BTF - Free Report) has advanced about 52%. iShares Bitcoin Trust ETF (IBIT - Free Report) has gained about 42%.
Rate-Hedge ETFs
The interest rate hedge corner of the market has been an area to watch as Treasury yields climb and investors brace for a potentially more hawkish Fed. The 10-year Treasury yield recently rose to its highest level since 2007, following hawkish Fed commentary and stronger-than-expected economic data.
As a result, Simplify Interest Rate Hedge ETF (PFIX - Free Report) gained 40% in Q3 as it looks to hedge interest rate movements arising from rising long-term interest rates, while providing the potential for income. PFIX has a dividend yield of 6.45% and charges 0.50% in annual fees. The fund is up 16% over the past month and has surged 10% over the past week.
Cybersecurity
WisdomTree Cybersecurity Fund (WCBR - Free Report) has added about 37% in Q3 and has been up 3.7% over the past month and 1.8% over the past week. Rising AI safety concerns are acting as a tailwind for cybersecurity stocks.
As mentioned on CNBC, CrowdStrike CEO George Kurtz pointed out that the need for cybersecurity will not diminish simply because AI development slows, as potentially dangerous models are already being used. He also stressed the growing importance of using AI to combat AI-driven cyber threats (read: Time to Boost Cybersecurity ETF Exposure as AI Safety Concerns Rise).
Genomics
ARK Genomic Revolution ETF (ARKG - Free Report) has jumped about 33% in Q3, added 7% over the past month and about 1% last week, indicating the fund is in high momentum.
ARKG is surging because genomics and biotech have entered a powerful risk on phase in 2026, and the fund’s exposure to CRISPR/gene editing, multi omics, and molecular diagnostics has been gaining investors’ love currently.
A slew of positive clinical data and regulatory progress for CRISPR based and other gene editing therapies has acted as a positive for the fund.