FXO, IYG Slide on Bank Stock Slump

The First Trust Financials AlphaDEX Fund (FXO) fell 1%, dragged down by Ally Financial’s 17% plunge. Ally’s chief financial officer warned of increased credit challenges in auto loans during the third quarter, pressuring the ETFs' financial sector holdings.

JPMorgan’s 5.2% drop, following cautious 2025 net interest income guidance, pushed both the iShares U.S. Financial Services ETF (IYG) and Financial Select Sector SPDR Fund (XLF) down about 1.1%.

The iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) dipped 0.7%, affected by Goldman Sachs’ decline of about 4.7%. Goldman Sachs represents a 14.3% holding in the ETF.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) closed down 0.2%. JPMorgan was the largest decliner in the 30-stock Dow, followed by Goldman Sachs and American Express, down 2.2%.

Traders now await August’s Consumer Price Index report, due Wednesday, and the Producer Price Index report on Thursday as potential market catalysts.

A day after Apple introduced its latest iPhone lineup to mixed reviews, ETFs with large holdings in the technology giant were trading slightly higher.

The $72 billion in assets Vanguard Information Technology ETF (VGT), $11.2 billion Fidelity MSCI Information Technology Index ETF (FTEC) and iShares U.S. Technology ETF (IYW) were all up nearly 0.8% in Tuesday afternoon trading. All three funds have more than 16% allocations in Apple, their largest, according to etf.com data. 

Apple unveiled its new iPhone 16s at "It's Glowtime" event Monday. Some observers of the company's products praised the new interface and larger screens on some models, while others felt that the phones did not offer significant enough updates on older models. Apple has touted the phones' artificial intelligence features, longer battery life and improved camera. 

Major equity indexes were mixed with the technology-heavy Nasdaq up 0.6% but the S&P 500, which has a strong tech component, down slightly. The Invesco QQQ Trust (QQQ) recently rose about 0.7%

Following one of the worst weeks for risk assets this year, the tech sector started the day strongly, as the Technology Select Sector SPDR Fund (XLK) rose nearly 1% in morning trading, adding to its 1.6% gain yesterday.

Last week, which was the first week of Q3 trading, XLK fell by nearly 8%, as investors feared that AI's market leadership was beginning to weaken as recent earnings calls from semiconductor giants Nvidia and Broadcom left investors unimpressed.

Meanwhile, the broader market traded near zero, as measured by the SPDR S&P 500 ETF Trust (SPY).

This week's positive momentum will be tested tomorrow, as a key inflation gauge, the Consumer Price Index (CPI) report is due before the market opens.