ETFs that observe the tech-saturated Nasdaq 100 surged to record-time highs on Thursday, regardless of the U.S. imposing its broadest tariff enhance in almost 100 years.
QQQ is hovering round its all-time highs. Observe stay costs right here.
Main the pack have been:
Invesco QQQ Belief QQQ
Invesco NASDAQ 100 ETF QQQM
Direxion NASDAQ 100 Equal Weighted Index Shares QQQE
These ETFs have bucked rising geopolitical tensions and a surge in trade-related uncertainty, reflecting investor confidence within the stability of big-cap U.S. techs and the long-term prospects of AI-related innovation.
Notably, QQQ posted an 8.5% return previously six months, besting the S&P 500’s 5.3%. Its outperformance has carried over into the second half of the 12 months with renewed momentum sparked by a mix of basic and coverage tailwinds.
ETFs Focus and Composition
The Nasdaq 100 has been disproportionately influenced by a small variety of dominant tech shares. The Magnificent Seven — Meta Platforms Inc META, Alphabet Inc. GOOGLGOOG, Amazon.com Inc AMZN, Apple Inc AAPL, NVIDIA Corp NVDA, Microsoft Corp MSFT and Tesla Inc TSLA — collectively symbolize greater than 40% of QQQ’s general weight.
Invesco’s NASDAQ 100 ETF QQQM, with its decrease price, has traced an identical path larger, and thus is a lovely selection for long-term, buy-and-hold buyers. QQQE, in the meantime, with its equal weighting, has supplied extra publicity to mid-cap constituents of the index, tempering reliance on massive-cap tech.
Drivers of the Nasdaq ETF rally
- Semiconductor Exemptions Ease Commerce Issues: Although President Donald Trump’s broad tariffs now embrace virtually 200 nations, with common efficient charges set to hit 18.6%, in accordance with the Yale Funds Lab as cited on Yahoo Finance, the administration indicated exemptions for big semiconductor corporations, placing the brakes on issues of disruption within the trade.
Semiconductor shares like Superior Micro Units Inc AMD (+5.7%) and Nvidia (+0.8%) cheered, boosting ETFs with robust holdings within the corporations.
- Apple’s $100 Billion U.S. Funding Gives Tailwind: Apple’s declaration of a $100 billion home manufacturing funding, together with new iPhone and Watch glass manufacturing in Kentucky, additional bolstered investor confidence. Since Apple holds important weightings in Nasdaq-tracking ETFs (over 7% in QQQ), the motion supplied help to fund efficiency.
- AI-Centric Capex Cycle Helps Broader Tech Rally: Main U.S. cloud suppliers and hyperscalers, together with Amazon, Meta, Alphabet and Microsoft, have considerably elevated their capital expenditure to satisfy AI infrastructure calls for. This has instantly benefited {hardware} enablers akin to Micron Expertise Inc MU, Broadcom Inc AVGO, Arista Networks Inc ANET and Dell Applied sciences Inc DELL, lots of which function prominently throughout Nasdaq ETFs.
Mizuho Securities estimates a 51% YoY enhance in mixed information middle funding by just a few of those corporations in 2025, in accordance with Traders Enterprise Every day.
- Rising Expectations of a Fed Charge Lower: The appointment of Stephen Miran to the Federal Reserve Board, upon Adriana Kugler’s resignation, has fueled anticipation of extra dovish financial coverage. Including to comfortable labor market situations and climbing jobless claims, the CME FedWatch Software now signifies a 89.4% likelihood of a 25-basis-point charge minimize on the subsequent September assembly.
Nasdaq ETFs, with their development bias and sensitivity to length, traditionally carry out higher in environments of declining rates of interest.
Conclusion
Despite the imposition of probably the most protectionist U.S. commerce coverage measures in a long time, Nasdaq-tracking ETFs have surged on to new highs. The resilience is supported by selective exemption from tariffs for key industries, growing funding in AI infrastructure, a attainable shift in Fed coverage and company efforts akin to Apple’s reshoring initiative.
With AI more and more defining the funding surroundings and macro situations favoring development shares in flip, Nasdaq-centric ETFs look to take pleasure in each structural and cyclical tailwinds even in a high-tariff surroundings.
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Photograph: Drozd Irina by way of Shutterstock
