NVDL Tops $5 Billion Even as Nvidia Stock Slides, Major Market Indexes Tick Higher

The GraniteShares 2x Long NVDA Daily ETF (NVDL) has topped $5 billion in assets under management, an astounding sum for a single stock exchange-traded fund.

Launched at the tail end of 2022, NVDL is the textbook example of an ETF coming to market at the perfect time. Two weeks after OpenAI unveiled ChatGPT, a chatbot trained on Nvidia’s powerful A.I. chips, GraniteShares launched NVDL.

It’s been nearly straight up for both Nvidia stock and NVDL since then, with the latter gaining 1,664% since its debut (though it dropped X% on Thursday, a blip for the high-flying ETF).

Major indexes closed slightly higher with the tech-heavy Nasdaq up 0.3% but the Dow Jones Industrial Average and S&P 500 both at 0.09% gain. Digital assets recently rose with Bitcoin and ether up 0.8% and 2.5%, respectively. 

Encouraging inflation data sent the prices of major bond exchange traded funds higher in early Thursday afternoon trading. 

The world's two largest bond ETFs by assets under management, the $110 billion iShares Core U.S. Aggregate Bond ETF (AGG), and the $108 billion Vanguard Total Bond Market ETF (BND), were both a few fractions of a percentage point into positive territory. 

So were the Vanguard Total International Bond ETF (BNDX) and  iShares 20+ Year Treasury Bond ETF (TLT), which have $56 bill and $54 billion in AUM. 

Several reports on Thursday signaled that inflation might be waning.

Personal consumption ticked down to 1.5% in the first quarter, compared to 3.3% the previous, according to the U.S. Bureau of Economic Analysis. GDP rose 1.4% for the period, higher than expected, but significantly lower than the 3.4% in 2023's fourth quarter. Recent jobs reports have shown a softening in the closely watched job market, whose strong performance has been among the major factors in the U.S. central bank's decision not to raise interest rates. 

Major indexes were mixed with the tech-heavy Nasdaq in the green but the Dow Jones Industrial Average and S&P 500 slightly in negative territory. Digital assets recently rose with Bitcoin and ether up 1% and 2.5%, respectively. 

Markets are holding on despite economic data releases Thursday, which could contribute to fears that the Fed will keep rates 'higher for longer'. SPY, the SPDR S&P 500 ETF Trust rose roughly .20% while DIA, the SPDR Dow Jones Industrial Average ETF Trust was nearly .25% higher.

The Commerce Department released the "third" estimate of gross domestic product (GDP) which rose 1.4% in the first quarter, an upward revision from the 1.3% of the second estimate. Jobless claims dropped by 6,000 to 233,000 from the week prior. Both pieces of economic data reinforced that the U.S. economy remains resilient, despite the Fed's 'higher for longer' rate stance which has been hammering at the economy.

Tech Rally Stumbles on Weak Micron Earnings

After the tech sector clawed back gains after a slump in Nvidia, weak outlook from American chipmaker Micron battered the sector again. Investors bullish on artificial intelligence had high expectations dashed after the company's quarterly revenue forecast fell short. 

QQQ, the Invesco QQQ Trust is the biggest holder of Micron. The fund, which typically mirrors the tech-heavy Nasdaq, rose over .10%. FEPI, the REX FANG & Innovation Equity Premium Income ETF also jumped over a quarter of a percentage point; the fund allocates just over 6% to the chipmaker. 

But semiconductor ETFs struggled as investors weighed the future outlook for AI. PSI, the Invesco Dynamic Semiconductors ETF dropped .20%, while USD, the ProShares Ultra Semiconductors slid over 3%. SHOC, the Strive U.S. Semiconductor ETF dipped over .50%.

Bank Stress Test Weighs on Financials

According to the Federal Reserve, their annual stress test of American banks found that, while big banks would "endure greater losses" than they did last year, that they were "well positioned" to withstand a "severe recession." 

The banking sector slid in response. XLF, the Financial Select Sector SPDR Fund dropped by more than a quarter of a percentage point. The fund is one of the most actively traded ETFs Thursday, according to economic data. XLF saw more than 7.7M in trading volume.

VFH, the Vanguard Financials ETF hovered near the flatline while IYF, the IShares U.S. Financials ETF rose over .10%.