"Chaos Creates Opportunities"? Buy These ETFs

The optimism driven by former President Trump’s policies has started to fade as markets react to escalating trade tensions and concerns over slowing economic growth amid persistent inflation.

Both the S&P 500 and the Nasdaq Compositehave wiped out their post-election gains, with the Nasdaq officially entering correction territory on Thursday. The S&P 500 has just seen its worst week since September 2024.

Weak Jobs Report Adds to Concerns

Investors largely shrugged off a weaker-than-expected February jobs report, which briefly pushed Treasury yields lower. Nonfarm payrolls increased by 151,000 in February, falling short of economists' expectations of 170,000. The unemployment rate rose to 4.1%, adding to concerns about economic softening.

Volatility Creates Buying Opportunities?

Although this is an uncertain time, we can use it to our long-term advantage. We should not forget that we have previously overcome the Great Financial Crisis, the COVID-19 crisis, and supply chain disruptions.

Despite the recent volatility, many strategists remain confident in the market’s resilience. John Stoltzfus, chief investment strategist at Oppenheimer projects that the S&P 500 could end the year at 7,100, implying a 25% upside from current levels, as quoted on Yahoo Finance.

"Chaos creates opportunities," said Dan Ives, global head of technology research at Wedbush, as quoted on Yahoo Finance. "Buying the dip has been our strategy for decades. The macro environment may cause fear, but looking back, people often regret not owning the winners."

However, the recent sell-off has been swift. The S&P 500 has swung by 2% for seven consecutive sessions after reaching a record high on Feb. 19, 2025. This marks the longest stretch of such volatility since August 2024, when concerns over economic growth last emerged. Similar market swings occurred in March 2023, around the collapse of Silicon Valley Bank, the Yahoo Finance article mentioned.

Is Now the Time to Buy?

Dan Ives remains optimistic despite trade concerns, stating, "[Tariffs] add uncertainty, but they don’t disrupt the demand cycle. This won’t end the tech bull market—it’s a scare, but more of an opportunity than a reason to panic."

ETFs to Buy

Below we highlight a few exchange-traded funds (ETFs) that have a Zacks Rank #1 (Strong Buy) or #2 (Buy). These stocks returned less than 1% so far this year. These stocks have a P/E less than that of the S&P 500 (i.e. 27.31 as of Mar. 7, 2025).

SPDR Portfolio S&P 500 ETF (SPLG) – Down 1.7% YTD, P/E: 23.73X, Zacks Rank #1

The underlying S&P 500 Index is designed to measure the performance of the large-capitalization segment of the U.S. equity market. The fund charges 2 bps in fees.

Consumer Discretionary Select Sector SPDR ETF XLY – Down 8.3% YTD, P/E: 27.29X, Zacks Rank #1

The underlying Consumer Discretionary Select Sector Index seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index. The ETF charges 79 bps in fees.

SPDR NYSE Technology ETF XNTK– Down 0.04% YTD, P/E: 27.23X, Zacks Rank #1

The underlying NYSE Technology Index is composed of 35 leading U.S.-listed technology-related companies. The fund charges 42 bps in fees.

SPDR S&P Kensho Future Security ETF FITE – Down 3.4% YTD, P/E: 24.58X, Zacks Rank #2

The underlying S&P Kensho Future Security Index is comprised of U.S.-listed equity securities of companies domiciled across developed and emerging markets worldwide which are included in the Future Security sector. The fund charges 45 bps in fees.

Invesco S&P 500 Pure Growth ETF RPG – Down 4.9% YTD, P/E: 24.66X, Zacks Rank #2

The underlying S&P 500 Pure Growth Index measures the performance of securities that exhibit strong growth characteristics in the S&P 500 Index. The fund yields 0.23% annually.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research