SPY, QQQ Bounce Back But Finish Below Today's High

Both the SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ (QQQ) got the bounce that bulls were hoping for on Tuesday, but they finished well off their highs, reflecting that skittishness that still permeates markets.

At their highs, SPY and QQQ were up by 2.4% and 2.7%, respectively, but they ended the session with gains of just under 1% each.

The price action for the rest of the week will be interesting to watch. Will markets try to bottom out or will SPY enter correction territory (down 10% from its highs)?

U.S. renewable energy ETFs are reacting differently to news of SunPower’s bankruptcy filing. The solar panel installer’s financial troubles stemming from high interest rates and alleged reporting issues, have caused ripples across the industry. 

Some funds like the Invesco Solar ETF (TAN) and SPDR S&P Kensho Clean Power ETF (CNRG) had gains of about 1%. Others experienced declines, with the Invesco WilderHill Clean Energy ETF (PBW) dropping 0.9% and the ProShares S&P Kensho Cleantech ETF (CTEX) down 10.7%. SunPower’s stock price fell sharply, with the company’s shares down over 86% year-to-date. 

Transportation-focused ETFs rallied on positive earnings news from Uber. Funds tracking the sector, including those focused on electric vehicles, rose. 

The iShares U.S. Transportation ETF (IYT) grew 3.2%, and the Direxion Daily Transportation Bull 3X Shares (TPOR) 9.7%, while the Fidelity Electric Vehicles and Future Transportation ETF (FDRV) is up 0.6%. Uber stock rose 9.3% midday, though it is down 10.3% over the past month.

Markets mounted a broad comeback after Monday's sell off slammed into the three major indices and tech and consumer discretionary ETFs. 

The S&P 500 and the Dow slipped the most in two years, sinking 3% and 2.6% respectively. Investors, fearful of a potential recession, dumped out of high growth names like Nvidia and Amazon and bought into safe haven investments like Treasury bonds. 

What a difference a day makes. SPY, the SPDR S&P 500 ETF Trust was up roughly 1.6% in morning trading Tuesday and DIA, the SPDR Dow Jones Industrial Average ETF Trust added 1.3%. QQQ, the Invesco QQQ Trust which serves as a proxy for the tech-heavy Nasdaq jumped 1.6%.

Tech and consumer discretionary ETFs, which nosedived on Monday, gained back ground. XLY, the Consumer Discretionary Select Sector SPDR Fund rose 1.5%. The fund had been dragged down by losses in Amazon. 

XLK, the Technology Select Sector SPDR Fund jumped 2.3%, no longer hamstrung by heavy losses in Nvidia. The chipmaker, which slumped more than 5% Monday, jumped nearly 5% boosting tech and semiconductor ETFS. 

XLK 1-MONTH

USD, the ProShares Ultra Semiconductors which allocates nearly 27% of the fund to the chipmaker, soared 5.9%. 

Volatility, Safe Haven ETFs Slide

Volatility was down Tuesday as traders took a deep breath from the sell off trades that rattled markets. VIXY, the ProShares VIX Short-Term Futures ETF which invests in the VIX volatility index, slumped 21%, after soaring during Monday's trading session. 

The VIX, also known as the "fear index" took a breather after jumping on Monday due to investors' anxieties about a potential recession. 

Investors also turned away from safe haven assets on Tuesday, causing fixed income and gold to sink. Bond yields rose in early trading Tuesday, causing Treasury prices to sink. Yields and prices have an inverse relationship to each other.

TLT, the iShares 20+ Year Treasury Bond ETF slid 1.3% while GOVT, the iShares U.S. Treasury Bond ETF dipped 0.5%.

Gold also sank Tuesday, GLD, the SPDR Gold Trust fell by three quarters of a percentage point.