Powell's Rate Cut Signal Triggers Small-Cap Rally, Gold Makes Record Highs, Dollar Tumbles: 7 ETFs On The Move
Portfolio Pulse from Piero Cingari
Jerome Powell's remarks on potential interest rate cuts led to a rally in small-cap stocks, gold reaching record highs, and a decline in the US dollar. Several ETFs, including IWM, GLD, VNQ, KRE, ITB, XME, and UUP, experienced significant movements in response to the news.
August 23, 2024 | 3:25 pm
News sentiment analysis
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NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) fell by 0.7% following Powell's remarks, marking its worst performance this year as the dollar weakened.
Powell's indication of potential rate cuts led to a weaker dollar, directly impacting UUP, which tracks the USD index.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The SPDR Gold Trust (GLD) rose 1.1% as gold prices hit a record high of $2,530 per ounce, driven by expectations of lower interest rates.
Lower interest rate expectations and a weaker dollar boosted gold prices, benefiting GLD.
CONFIDENCE 90
IMPORTANCE 75
RELEVANCE 85
POSITIVE IMPACT
The iShares U.S. Home Construction ETF (ITB) climbed 3.2% as homebuilders benefited from Powell's rate cut signal.
Homebuilders, sensitive to interest rate changes, saw gains, positively impacting ITB.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 75
POSITIVE IMPACT
The iShares Russell 2000 ETF (IWM) surged 2.9%, outperforming large-cap indices, as small-cap stocks rallied on Powell's comments.
Powell's remarks favored small-cap stocks, leading to a significant rise in IWM.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
The SPDR S&P Regional Banking ETF (KRE) jumped 4.6% as regional banks led gains in interest-rate sensitive industries.
Regional banks, sensitive to interest rate changes, saw significant gains, positively impacting KRE.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
The Vanguard Real Estate ETF (VNQ) increased by 1.8%, reaching its highest level since September 2022, as real estate stocks rallied.
Interest rate-sensitive sectors like real estate benefited from Powell's comments, boosting VNQ.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 75
POSITIVE IMPACT
The SPDR S&P Metals & Mining ETF (XME) advanced 1.7% as miners led gains in interest-rate sensitive industries.
Miners, sensitive to interest rate changes, saw gains, positively impacting XME.
CONFIDENCE 80
IMPORTANCE 65
RELEVANCE 70