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Value ETFs up 3.5% in July while semiconductor ETF falls 26%; consumer staples like Kraft Heinz surge 14% YTD, signaling a shift to real‑economy plays.
Value‑focused ETFs posted gains in July, with the iShares Russell 1000 Value fund up 3.5% and the small‑cap counterpart soaring 22%, as the semiconductor sector slumped 26% amid a broader tech sell‑off [1].
| At a glance | |
|---|---|
| Large‑cap value ETF (IWD) | +3.5% July |
| Small‑cap value ETF (IWN) | +22% July |
| Semiconductor ETF (SOXX) | –26% July |
| Nasdaq Composite | –6% July |
The Nasdaq Composite slipped more than 6% in July, edging toward a correction, while the iShares Semiconductor ETF dropped over a quarter for the month [1]. Momentum‑focused funds recorded their worst month on record, with the MSCI USA Momentum Factor ETF down more than 15% [1]. In contrast, value‑oriented funds rallied, reflecting a rotation toward companies tied to the real economy rather than AI‑driven growth. The large‑cap value index rose 3.5% in July and is up roughly 19% year‑to‑date, while its small‑cap counterpart posted a 22% gain this month [1].
Peter Boockvar of One Point BFG Wealth Partners described the shift as “sell semis, buy ketchup,” highlighting a move into consumer staples. Kraft Heinz, labeled an “undervalued” favorite, has risen more than 14% this year—double the S&P 500’s gain—and posted an 8% jump in the first three days of the current week [1]. Coca‑Cola mirrored this performance with a similar 8% rise over the same period [1]. The sector’s appeal stems from perceived fundamentals bottoming and a broader investor flow toward stable, real‑economy businesses [1].
Healthcare stocks have rebounded after years of underperformance, with sector weighting in the S&P 500 improving from a low of 9% toward its historic peak of 16% [1]. JPMorgan’s Dubravko Lakos‑Bujas cites favorable valuations and expected earnings acceleration in 2027 as drivers of a potential inflection point [1]. Hedge funds remain overweight small caps, holding about 13% of their net portfolios in Russell 2000 names, according to MSCI data [1]. Ed Yardeni notes “AI fatigue” and a preference for businesses with clear models, reinforcing the tilt toward value and small‑cap exposure [1].
The July shift underscores a broader market recalibration, with investors favoring sectors anchored in tangible demand while remaining cautious on AI‑driven growth narratives. The durability of this rotation will hinge on earnings trends in both semiconductors and consumer staples.
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 3 outlets · Jul 30, 2026 · How we report
The index fell 0.7% in the most recent week, putting it on pace for a second consecutive weekly decline.
It has risen approximately 6.9% year‑to‑date.
Higher oil prices due to U.S.–Iran tensions and disappointing earnings from Alphabet and Tesla have weighed on the index.
The August‑October period historically yields modest or negative returns, while the November‑January window historically provides stronger gains, averaging a 3.6% return.