ETFs Last Week: Funds Lead The Charge As Markets Stage A Return To Risk-On

Investors ditched their worries last week, and some ETFs exploited the increased euphoria full tilt.

ETF Weekly Performance Highlights:

VanEck Semiconductor ETF (NASDAQ:SMH):

SMH jumped 13% last week, fueled by a spectacular rally in chip stocks. Investor optimism over AI, cloud computing, and tenacious demand for semiconductors fueled the meteoric surge of this ETF.

Virtus LifeSci Biotech Clinical Trials ETF (NYSE:BBC): BBC rose 7%, with the biotech industry regaining some much-needed mojo. Investors seemed happy to roll the dice on clinical trial breakthroughs, ignoring the industry’s typical volatility.

Simplify Volt TSLA Revolution ETF (NYSE:TESL): TESL surged 31.2% in its strongest week in months. Tesla (NASDAQ:TSLA) stock jumped after Elon Musk promised to dial back his time with the government and shift his focus back to the EV behemoth, music to Tesla shareholders’ ears.

Invesco S&P 500 High Beta ETF (NYSE:SPHB): SPHB gained 11.5% as risk appetite roared back. High-beta stocks, the market’s resident drama queens, were once again popular with investors seeking momentum.

iShares Bitcoin Trust ETF (NASDAQ:IBIT): IBIT gained 9.2%, benefiting from Bitcoin’s recovery and renewed optimism about crypto. Hodl (“Hold on for dear life”), it seems, remains a lifestyle choice.

What Happened Last Week

While ETFs led the dance, overall market sentiment also received a much-needed dose of adrenaline.

Markets regained their groove as investor anxiety over the U.S.–China trade war eased. The Trump administration signaled the possibility of tariff reductions, and China considered putting some levies on hold, according to reports. Never one to pass up a headline, President Donald Trump assured investors he had no intention of firing Fed Chair Jerome Powell, which eased concerns over central bank autonomy.

The S&P 500 has clawed back almost 80% of its post-April 2 “Liberation Day” sell-off. Earlier sell-offs in Treasuries and the dollar also halted, as investors adopted a risk-on sentiment.

But beneath the surface, warning lights continue to flash:

U.S. private sector growth moderated to a 16-month low. Consumer sentiment saw the worst three-month slump since the 1990 recession.

Inflation expectations jumped to levels not seen since “Eye of the Tiger” was the chart-topper.

In the stock world, ServiceNow (NYSE:NOW) posted a 20% weekly gain on robust earnings, and Northrop Grumman (NYSE:NOC) dropped 15% after scaling back its 2025 outlook. Tesla shares, meanwhile, had their largest weekly jump since November following Musk’s pledge to spend less time with the Department of Government Efficiency (DOGE) and focus more on making electric vehicles.

What’s Ahead

Action this week will be paramount, with high-profile earnings from Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), Apple (NASDAQ:AAPL), and Amazon (NASDAQ:AMZN). In addition, look for a data dump: the initial peek at Q1 GDP, the Fed’s favored inflation gauge for March, and the April jobs report.

Markets may have flown high last week, but this week may be an entire different ball game.

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