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Last week was volatile for the U.S. stock market. Soaring yields and solid economic data, which led to the speculation that the Fed will keep its restrictive policy in place until late in the year, have led to risk-off trade for most of the week. However, yields declined somewhat to end the week, providing enough boost to stocks.  

All three major indices surged more than 1% last week, with the tech-heavy Nasdaq Composite Index climbing about 2%. The Dow Jones Industrial Average returned to positive territory year to date, enjoyed its first weekly advance since late January.

As a result, a few ETFs surged to new highs. We have highlighted five of them targeting a specific sector or industry that is hovering at a one-year high. These include iShares U.S. Aerospace & Defense ETF (ITA - Free Report), Invesco S&P SmallCap Industrials ETF (PSCI - Free Report), Invesco S&P SmallCap Consumer Staples ETF (PSCC - Free Report), SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report) and Global X US Infrastructure Development ETF (PAVE - Free Report).

A series of solid economic data has rekindled concerns that interest rates could keep climbing for longer than anticipated. U.S. consumer spending increased the most in nearly two years in January and retail sales increased the most in nearly two years in January after two straight monthly declines. The housing market is showing signs of improvement. U.S. builder confidence has risen for the second consecutive month to the highest level since September 2022. Signed contracts to buy existing homes in the United States rose the most since June 2020 in January.

The rounds of robust data pushed the yields higher last week. The 10-year yields topped 4%, marking the highest level since November, while 2-year yields reached the highest level since November to about 4.8%. The 6-month yield rose to above 5%, just shy of its highest level since Mar 12, 2007. However, yields declined somewhat to end the week in the wake of comments from Fed officials that calmed fears over inflation and interest rates. Notably, 10-year Treasury yields clawed back below 4%.

iShares U.S. Aerospace & Defense ETF (ITA) – 52-Week High: $117.89

The aerospace and defense sector is getting a boost given the still ongoing Russia-Ukraine issues that could result in increased defense spending. Additionally, the sector has shown its resiliency to the recent market volatility, which is expected to continue in the coming days. iShares U.S. Aerospace & Defense ETF provides exposure to U.S. companies that manufacture commercial and military aircraft and other defense equipment by tracking the Dow Jones U.S. Select Aerospace & Defense Index. It holds 35 stocks in its basket with AUM of $5.7 billion and an expense ratio of 0.39%.

iShares U.S. Aerospace & Defense ETF trades in an average daily volume of around 701,000 shares. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Invesco S&P SmallCap Industrials ETF (PSCI) – 52-Week High: $101.42

Solid data suggests that the economy is resilient, bolstering small-cap stocks. As small-cap companies are more domestically tied, these are poised to outperform when the economy improves. Invesco S&P SmallCap Industrials ETF offers exposure to small-cap companies that are principally engaged in the business of providing industrial products and services, including engineering, heavy machinery, construction, electrical equipment, aerospace and defense and general manufacturing. It holds 91 stocks in its basket, with key holdings in machinery, commercial services & supplies, and building products.

Invesco S&P SmallCap Industrials ETF has amassed $76.7 million in its asset base and charges 29 bps in annual fees. It trades in a volume of 2,000 shares and has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

Invesco S&P SmallCap Consumer Staples ETF (PSCC) – 52-Week High: $112.40

The consumer staples sector generally acts as a safe haven amid political and economic turmoil. Stocks in these sectors generally outperform during periods of low growth and high uncertainty. Invesco S&P SmallCap Consumer Staples ETF targets the small-cap segment of the consumer staples sector by tracking the S&P SmallCap 600 Capped Consumer Staples Index. It holds 31 stocks in its basket and charges 29 bps in annual fees.

Invesco S&P SmallCap Consumer Staples ETF has managed assets worth $54.7 million and trades in an average daily volume of 5,000 shares. It has a Zacks ETF Rank #3 with a Medium risk outlook.

SPDR S&P Oil & Gas Equipment & Services ETF (XES) – 52-Week High: $91.22

Oil prices logged in weekly gains on optimism over a rebound in Chinese demand. SPDR S&P Oil & Gas Equipment & Services ETF tracks the S&P Oil & Gas Equipment & Services Select Industry Index, which measures the performance of the companies engaged in the oil and gas equipment and services industry. It holds 33 stocks in its basket with AUM of $553 million.

SPDR S&P Oil & Gas Equipment & Services ETF charges 35 bps in fees per year from investors and has a Zacks ETF Rank #3 with a High risk outlook.

Global X US Infrastructure Development ETF (PAVE) – 52-Week High: $30.20

Global X US Infrastructure Development ETF seeks to invest in companies that stand to benefit from a potential increase in infrastructure activity in the United States, including those involved in the production of raw materials, heavy equipment, engineering, and construction. It follows the Indxx U.S. Infrastructure Development Index and holds 98 stocks in its basket. Industrials dominate the fund portfolio at 71.3% while materials takes a 22.3% share.

Global X US Infrastructure Development ETF has AUM of $4 billion and charges 47 bps in annual fees. It trades at an average daily volume of 855,000 shares. PAVE has a Zacks ETF Rank #2.

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