Tech ETFs soar on the hopes of slower rate hikes
Technology-based exchange traded funds took off on Wednesday afternoon as the Nasdaq Composite (COMP.IND) popped 3.5% after Federal Reserve Chair Jerome Powell stated that a curb in rate hikes possibly can come as soon as the December FOMC meeting.
The Invesco QQQ Trust (NASDAQ:QQQ), which is the world’s fifth largest exchange traded fund with more than $160B assets to its name and tracks the 100 largest non-financial companies, showed gains of 3.7% in the final hour of the session.
Pushing even higher was the 3X leveraged version of QQQ. The ProShares UltraPro QQQ (TQQQ) surged to the topside by 11.2%, whereas its -3X inverse sister fund ProShares UltraPro Short QQQ (NASDAQ:SQQQ) plunged 11.2%.
Outside of the popular QQQ and the leveraged funds, other popular tech and innovation focused ETFs marched higher. Some funds include the Technology Select Sector SPDR Fund (NYSEARCA:XLK), Vanguard Information Technology Index Fund (VGT), iShares U.S. Technology ETF (IYW), ARK Innovation ETF (NYSEARCA:ARKK), Fidelity MSCI Information Technology Index ETF (FTEC), and the VanEck Semiconductor ETF (SMH).
Heading into the close, XLK was +4.1%, VGT +4%, IYW +4.4%, ARKK +6.5%, FTEC +4%, and SMH was +4.7%.
While tech funds have made a positive push in the middle of the week, they still remain deep in the red over the course of 2022. Year-to-date and QQQ is -27.7%, XLK -23.4%, VGT -25.5%, IYW -30.4%, ARKK -62.1%, FTEC -25.6%, SMH -27.7%, TQQQ -73.1%, and SQQQ +49.5%.
Outside of the tech space, broader equities soared while Treasury yields tumbled lower off the rhetoric that Fed Chief Powell expressed.