ETFs Retreat Ahead of Powell’s Jackson Hole Speech

The S&P 500 pulled back on Thursday, with the SPDR S&P 500 ETF Trust (SPY) closing 1% lower as investors awaited Federal Reserve Chair Jerome Powell’s speech at the annual Jackson Hole conference.

U.S. Renewable Energy and Semiconductors ETFs faced pressure. ALPS Clean Energy ETF (ACES) dropped 1.4%, while SPDR S&P Semiconductor ETF (XSD) fell 2.2%.

This comes as semiconductor manufacturer Wolfspeed’s stock tumbled 4.5% after reporting a fourth-quarter loss of 89 cents per share, 4 cents wider than expected, despite revenue meeting projections at $201 million.

Tech-focused ETFs saw mixed-performance. ETFs holding Snowflake declined as the software company’s shares plummeted 14.1%, with analysts citing growth deceleration during an earnings beat. 

The Spear Alpha ETF (SPRX) closed 3.1% lower, and ProShares Big Data Refiners ETF (DAT) closed 1.7%, and TrueShares Technology, AI & Deep Learning ETF (LRNZ) dropped 1.8%.

However, First Trust Indxx Metaverse ETF (ARVR) bucked this trend, closing up 0.8%. This gain was driven by Zoom Video’s 12.5% climb following strong second-quarter results and upbeat guidance for both third-quarter and full-year earnings and revenue. 

Markets comeback rally was halted today ahead of Fed Chair Powell's comments from the Jackson Hole Economic Symposium tomorrow. 

Consumer discretionary and tech ETFs led markets lower. XLK, the Technology Select Sector SPDR Fund sank nearly 1.5%. Tech has been battered since the market sold off at the beginning of the month, rising 1.5% since then. Year to date, the sector has notched roughly 17% gains. 

XLY, the Consumer Discretionary Select Sector SPDR Fund about 1% at noon Thursday. Two of the biggest holdings in the fund are Amazon and Tesla, which are members of the high growth tech based group dubbed the 'Magnificent Seven'.

Broad market ETFs also struggled Thursday; SPY, the SPDR S&P 500 ETF Trust fell over half a percentage point. DIA, the SPDR Dow Jones Industrial Average ETF Trust fell more than 0.3%.

QQQ, the tech-heavy Invesco QQQ Trust dropped the most, sinking over .80%.

Investors are eagerly awaiting remarks from Jackson Hole, Wyoming, where the Federal Reserve Bank of Kansas City will be holding its annual economic symposium. Fed Chair Jay Powell will speak at 10 a.m. New York time.

It's expected the Fed will hand out a rate cut at the next policy meeting in September, but questions still remain on how big the cut will be, especially as the labor market continues to weaken.