5 Best-Performing Sector ETFs of August

The S&P 500 logged its fourth successive month of gains to close out August. Even after the late last week retreat, stocks managed to post gains for August. The S&P 500 advanced 1.5% during the month, while the Dow Jones rose 3.2%, marking the fourth successive monthly increase for both indexes, as quoted on Yahoo Finance.

The Nasdaq capped the month with a 1.6% gain, notching its fifth consecutive monthly rise and its longest winning streak in nearly a year and a half, as quoted on Yahoo Finance. Small-cap stocks also thrived, with the Russell 2000 surging about 7% for August — its fourth consecutive monthly gain and strongest streak in over four years, as mentioned in the same Yahoo Finance article.

The personal consumption expenditures price index showed that core inflation was a seasonally adjusted 2.9% in July, meeting estimates but higher than June, as quoted on CNBC. The persistence of inflation above the Fed’s 2% target is worrisome. The annual pace also marked the highest increase since February, as quoted on CNBC.

Consumer sentiment fell to a three-month low in August as tariff-related concerns about the economic outlook and inflation overpowered the sentiment, according to the University of Michigan’s closely watched survey. Respondents signaled expectations for faster inflation over the coming year.

Despite the firmer inflation reading, bets on a rate cut in September remained strong. Traders continued to price in an 86.4% chance of a quarter-point reduction (at the time of writing), reflecting confidence that the Fed will ease monetary policy to counter a slowing labor market.

Ethereum prices jumped about 26% over the past month (as of Sept. 1, 2025). ETFs like Bitwise Ethereum Strategy ETF AETH and VanEck Ethereum ETF ETHV hovered around a 52-week high in August. Strong institutional demand mainly led to the surge. Staking yields and Layer 2 scaling are the other factors that kept Ethereum prices high in August, as quoted on tradingnews.com.

The late part of August saw a volatile phase for the tech stocks, although the earlier part was steady. Talks of an AI bubble fear were prevalent in the market in August. OpenAI’s Sam Altman floated the talks, as quoted on CNBC. On the final day of the month, the tech-heavy Nasdaq Composite led the Wall Street pullback, due to a Big Tech rout.

NVIDIA Corp. NVDA lost over 3.3% on Aug. 29, 2025. Tesla TSLA shares retreated 3.5% on the day while Meta Platforms Inc. META shares were down 1.7% and Amazon.com, Inc. AMZN dived over 1.1%.