ETFs Decline as US Equities Fall on Inflation Data

US equity indexes experienced a midday decline on Wednesday, August 26, 2026, as investors reacted to an accelerated sequential inflation reading for July and awaited Nvidia's ($NVDA+WL) quarterly earnings report. Broad-market exchange-traded funds like the iShares Russell 2000 ETF (IWM) and the SPDR S&P 500 ETF Trust (IVV) traded lower, while the Invesco $QQQ+WL Trust ($QQQ+WL) eased 0.2%. Most government bond yields increased.

The energy sector showed resilience, with the iShares US Energy ETF (IYE) and the State Street Energy Select Sector SPDR (XLE) each adding about 1%. In contrast, the technology sector saw mixed performance; the State Street Technology Select Sector SPDR ETF (XLK) rose 0.2%, but semiconductor-focused ETFs such as the SPDR S&P Semiconductor (XSD) and iShares Semiconductor (SOXX) slipped 0.2% and 0.1%, respectively.

Financial sector ETFs like the State Street Financial Select Sector SPDR (XLF) shed 0.1%, though bearish financial instruments saw gains. Commodities experienced upward movement, with crude oil gaining 0.6% and natural gas rising 3.8%. Precious metals saw declines, as gold dipped 1% and silver fell 1.1%.

### Story Arc / How We Got Here This market movement follows a period of rotation where software stocks saw gains as semiconductor names declined, a trend noted on August 18, 2026, driven by concerns over AI demand expectations and rising interest rates. While today's broad market declines differ, the underlying factors of inflation data and technology sector performance continue to be key market drivers. Prior coverage can be found at /explore/tech-rotation-software-stocks-rally-as-semiconductors-decline.