Markets Insights

The Dow had a weak week, falling approximately 0.6% and closing Friday at 53,732, down 108 points (-0.2%). The Dow’s relative weakness suggests market leadership continues to favor growth, technology, and smaller-cap stocks rather than the more defensive Dow components.

The biggest catalyst came Friday with the surprisingly weak July employment report.

The iShares iBoxx High Yield Corporate Bond ETF (HYG) was a little concerning this week.

The Russell 2000 declined approximately 1.1% this week, underperforming the Dow Jones Industrial Average but outperforming the technology-heavy Nasdaq Composite.

The Russell 2000 declined approximately 0.5% this week, underperforming its larger-cap peers as investors rotated away from higher-beta areas of the market following a strong first-half run in small-cap stocks.

The Russell 2000 continued to underperform despite the broader market’s resilience. Small-cap stocks faced headwinds from higher Treasury yields and a renewed preference for mega-cap technology names. While the Russell remains one of the year’s strongest-performing major indexes, this marked its second consecutive weekly decline, suggesting investors are becoming more selective after a strong first-half rally.

The Russell 2000 was one of the market’s standout performers again this week, continuing its impressive run and extending to fresh all-time highs.

HYG turned in a solid week, reflecting continued confidence in the corporate credit market.

HYG had a constructive week as credit markets continued to benefit from a “risk-on” environment.

HYG had a solid week as risk appetite improved and credit spreads remained relatively tight.