5 ETFs Responding To PPI Surge And Consumer Sentiment Dip On Friday

Two significant economic reports took center stage on Friday. The first report focused on the Producer Price Index (PPI) inflation, which was up 0.8% year-on-year in July, a substantial increase from June’s 0.2%, surpassing analysts’ earlier projections of 0.7%.

The higher-than-expected producer inflation sparked some concerns among investors regarding a potential resurgence of inflation risks. However, it’s worth noting that the Consumer Price Index (CPI) report released on Thursday showed a lower-than-anticipated inflation print in July.

The University of Michigan’s consumer sentiment index saw a slight dip from July’s 71.6 to 71.2 in the first two weeks of August, just shy of expectations set at 71. The index for current economic conditions showed a small growth of 1.1% for the month, while the one for consumer expectations weakened by 1.5%. Interestingly, one-year inflation expectations saw a further decrease from 3.4% to 3.3%, while long-term expectations remained steady.

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Here are some of the immediate reactions to economic data from exchange-traded funds during the Friday morning session:

• The Energy Select Sector SPDR Fund XLE rose 1.4%, marking the best daily performance among the 11 S&P 500’s sectors. The top performing stock for the day was Occidental Petroleum Corp OXY, up 2.5%, soaring to the highest since early April 2023.
  
• The Vanguard Health Care ETF VHT rose 0.5%, rebounding after two straight sessions in the red. The top gainer was Tango Therapeutics Inc. TNGX up 20%, after rising over 100% this week. The best contribution came from Ely Lilly and Company LLY, which alone added 0.1% to the VHT’s daily performance.
  
• The iShares MSCI Emerging Market ETF EEM tumbled 1.6% on track for the lowest close in a month. The main draggers were Samsung Electronics Co. Ltd. SSNLF and Taiwan Semiconductor Manufacturing Company Ltd. TSM.
  
• The Technology Select Sector SPDR Fund XLK fell 0.9%, on track for its second-straight week of losses. The worst performer was Lam Research Corp. LRCX, down 3.7%, but the worst contributor was Microsoft Corp. MSFT, down 0.9%.
  
• Invesco QQQ Trust QQQ similarly dropped 0.9%, hitting a 1-month low. The worst-performing stock in the QQQ ETF was JD.com JD, down 6.8%, while the main drag to the downside came from Nvidia Corp. NVDA, down 3.9%. The semiconductor giant has fallen nearly 9% this week, marking its worst weekly performance in a year.

Chart: Nvidia Is On Track For The Worst Week In Nearly A Year

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