VNQ, Other Real Estate ETFs Dip on Powell Comments

Markets pop to record highs as Fed Chair Jerome Powell speaks to Senate Banking Committee.

2 Updates 
Tue, February 18, 2025 At 8:51 AM EDT
Ron Day | Contributing Editor |

Real Estate, REIT ETFs Dip on Powell Comments

Real estate ETFs dipped today after Federal Reserve Chair Jerome Powell said the commercial property industry may be in a high-stress scenario for years to come. Broad index exchange-traded funds like SPY hit record highs.

"This is a risk that has been with us and will be with us for some time, probably for years," Powell said, speaking to the U.S. Senate Banking and Housing Committee during semiannual testimony carried on Bloomberg Television. "It's gonna be an issue for many banks."

The biggest real estate ETF, the $32 billion Vanguard Real Estate ETF (VNQ), pared some losses and was still down 0.2% shortly after noon. The Schwab U.S. REIT ETF (SCHH) dipped about the same and the Real Estate Select Sector SPDR Fund (XLRE) also inched down.

The SPDR S&P 500 ETF Trust (SPY) rose to a record after Powell otherwise sounded generally optimistic notes about the economy, saying inflation is cooling and that the central bank is awaiting "more good data" before deciding whether or not to cut rates, according to published reports.

The tech heavy Fidelity NASDAQ Composite Index ETF (ONEQ) jumped about 0.2%.

ONEQ vs. VNQ

Source: etf.com

Tue, July 9, 2024 At 9:58 AM EDT
Kristin Myers | SVP Content/EIC |

Markets Jump Ahead of Powell's Senate Testimony

The SPDR S&P 500 ETF Trust (SPY) rose to a new record high ahead of U.S. Federal Reserve Chair Jerome Powell's testimony before the Senate. Jumping .20% in early trading Tuesday, SPY's price nudged above $556, up from nearly $536 just a month ago. So far this year, SPY has jumped close to 17.50% as markets have continued to perform well in face of the higher-for-longer rate environment. 

Price Chart of SPY ETFPerformance Chart of SPY

At his semiannual address to Congress Tuesday morning, Powell was expected to answer questions about inflation and rate cuts while investors will listen closely for any clues on future rate cuts.

Across broader markets, the SPDR Dow Jones Industrial Average ETF Trust (DIA) slid nearly .40%, while the Invesco QQQ Trust (QQQ) which tracks the tech-heavy Nasdaq, rose .30%.

The higher-for-longer rate environment has kept rate sensitive ETFs on a rollercoaster ride this year. Treasury ETFs like the IShares 20+ Year Treasury Bond ETF (TLT) have been among the most affected as investors hopes of rate cuts were slashed at the start of the year. 

Performance Chart of TLT

Tech and semiconductor ETFs also rose on Tuesday in early trading. High growth sectors perform well in low-rate environments and have faced the headwinds of the Fed's hawkish stance.

The Technology Select Sector SPDR Fund (XLK) rose nearly .70%. The IShares Semiconductor ETF (SOXX) and the VanEck Semiconductor ETF (SMH) jumped .70% and nearly 1% respectively.

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