ETF Trends
ETF Trends

U.S. equity and stock exchange traded funds weren’t able to maintain their momentum, following the Federal Reserve rate hike decision on Wednesday, as the healthcare sector drags on the broader market.

The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were 0.2% lower Thursday.

The healthcare sector was the worst performing area of the market, with the Health Care Select Sector SPDR (NYSEArca: XLV), the largest healthcare exchange traded fund, down 1.2%.

Investors were concerned about Obamacare’s outlook as the House Republican health plan, the main element in the effort by Republicans to replace most of the Affordable Care Act, passed through Congress by a narrow vote, the Wall Street Journal reports.

“There’s a fair amount of uncertainty about how the Obamacare redo will play out…and the market really hates uncertainty,” Timothy Anderson, managing director at brokerage MND Partners, told the WSJ.

The energy sector was also putting pressure on the markets, with  Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy ETF, down 0.6% on falling crude oil prices. Energy traders continue to be wary of high production and concerned about pledged cuts that may not be enough to stymie the global glut.

Nevertheless, traders remain optimistic on the whole as the Federal Reserve’s recent rate hike and more cautious monetary policy tone reflected an expanding U.S. economy.

“The largest economy in the world is performing very well…but the Fed has clearly signaled they’re not going to rush,” Christopher Dyer, director of global equity at Eaton Vance, told the WSJ. “That’s very conducive for global equity markets and the global economy.”

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