Bank ETFs Rise on Strong Q3 Earnings

3 Updates 
Tue, October 15, 2024 At 4:37 PM EDT
DJ Shaw | Finance Reporter |

Charles Schwab, PNC Financial beat expectations; Citigroup falters despite revenue growth.


Bank earnings boosted ETFs higher on Tuesday, with several funds gaining as financial institutions reported better-than-expected third-quarter results.

The iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) rose 0.7% after Charles Schwab shares rallied more than 6.7%. The brokerage topped analysts' expectations, posting earnings of 77 cents per share, excluding one-time items, on $4.85 billion in revenue.

The First Trust Nasdaq Bank ETF (FTXO) rose 0.9% despite Citigroup shares losing 5.2%. The bank posted earnings per share of $1.51 on $20.32 billion in revenue, surpassing analysts’ projections.

FTXO Performance

The iShares U.S. Regional Banks ETF (IAT) gained 1% as PNC Financial shares climbed more than 2.4% on a better-than-expected earnings report. The Pittsburgh-based regional bank reported earnings of $3.49 per share, toppings estimates. Revenue came in at $5.43 billion. 

The Invesco KBW Bank ETF (KBWB) rose 0.5% after Bank of America shares gained 0.9%. The lender exceeded analysts' estimates for third-quarter profit and revenue. Net interest income fell 2.9% to $14.1 billion, but still beat the $14.06 billion estimate. 
 

Tue, October 15, 2024 At 1:05 PM EDT
Ron Day | Contributing Editor |

USO drops on report Russia boosted exports; ASML, NVDA fall.

Equity and energy markets are slipping further in early afternoon trading as tech, oil and emerging markets ETFs all decline.

Tech stocks' declines accelerated, following a report said that the White House is weighing imposing caps on artificial intelligence chips, including those made by Nvidia Corp. Nvidia's gains have boosted stock indexes and ETFs for more than the past year and today the stock was more than 5% lower at times.

The Vanguard S&P 500 ETF (VOO) fell 0.4% while the SPDR Dow Jones Industrial Average ETF Trust (DIA) lost 0.3%. Tech stocks' drops were steeper than the broader indexes's. The Invesco QQQ Trust (QQQ), which tracks the tech-heavy Nasdaq, fell 1.1% while the Technology Select Sector SPDR Fund (XLK) dipped 1.8%. 

Among the hardest hit was the VanEck Semiconductor ETF (SMH), which has a 21% NVDA allocation and plummeted 4.9%. 

Crude oil futures fell after a report said Russian refined product exports rose to a three-month high. The United States Oil Fund (USO) dropped 4.8%; it had gained 16% so far this year.

ETFs that provide exposure to European and emerging markets dipped. The Vanguard FTSE Europe ETF (VGK) lost 1.4% and the Vanguard FTSE Emerging Markets ETF (VWO) dipped 1.9%.

Tue, October 15, 2024 At 11:22 AM EDT
Ron Day | Contributing Editor |

VOO, QQQ, XLK drop; Bloomberg says White House is weighing imposing caps on AI chips.

U.S. markets lost all their morning gains after a report said that the White House is weighing imposing caps on artificial intelligence chips, including those made by Nvidia Corp. whose gains have fueled stock markets for the past year.

The Biden administration has discussed limiting AI semiconductor sales to certain countries as a national security measure, Bloomberg said, citing unnamed sources familiar with the information. Persian Gulf countries that are increasing their demand for chips for AI data centers, which also have financial resources, are the focus of the potential rules, the story said.

The Vanguard S&P 500 ETF (VOO) fell 0.3% late morning New York time while the SPDR Dow Jones Industrial Average ETF Trust (DIA) lost 0.2%. 

Tech stocks were hit harder than the broad indexes. The Invesco QQQ Trust (QQQ), which tracks the tech-heavy Nasdaq, fell 1% while the Technology Select Sector SPDR Fund (XLK) dipped 1.5%. The VanEck Semiconductor ETF (SMH) plummeted 4.6%.

/tools/etf-comparison/SMH-vs-DIA

The cottage industry of ETFs betting on Nvidia rising and falling gyrated wildly. The GraniteShares 2x Short NVDA Daily ETF (NVD), which bets on falling Nvidia, soared 9.5%. It's counterpart, the GraniteShares 2x Long NVDA Daily ETF (NVDL) plummeted by the same amount. 

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