Stocks recently posted their worst month and first negative quarter of 2023 as the possibility of interest rates remaining higher for longer weighed on investors' sentiment.
The Dow DIA fell 2.6%, the S&P SPY declined 3.6%, while the Nasdaq Composite QQQ tumbled 4.1% during Q3. All three major indexes remain up this year, led by Nasdaq.
Energy was the best-performing sector, up about 12% as crude surged more than 25%. Communication Services was the only other sector in the green as investors favored Alphabet GOOGL and Meta Platforms (META) over Apple AAPL and Microsoft MSFT, which were already up by a significant margin.
Rate-sensitive sectors, Real Estate and Utilities, were the worst performers, down 9.2% and 9%, respectively.
The Simplify Interest Rate Hedge ETF PFIX was the best-performing ETF, up about 52%. It invests in options to hedge against rising long-term interest rates and benefit from market stress when fixed income volatility increases. (Should Investors Diversify with Hedge Fund Style ETFs?)
The Roundhill Cannabis ETF WEED gained about 50% on some favorable regulatory developments. The Department of Health and Human Services asked the DEA to review its classification of cannabis. Furthermore, the SAFE Banking Act, which would allow cannabis companies to use major financial and banking institutions, moved forward. (Cannabis Stocks & ETFs: Can the Recent Surge Continue?)
The Sprott Uranium Miners ETF URNM was up about 47% during the quarter. The demand for uranium has been rising thanks to renewed interest in alternative sources of energy, while supply has become constrained. (Why Uranium ETFs Are Going Nuclear)
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
