Palantir-Driven Tech Stock Decline Challenges AI ETFs
Market Sell-off: Wall Street experienced a significant sell-off, erasing over $500 billion in market value, with Palantir Technologies leading the decline despite positive earnings.
AI ETFs Decline: The Global X Artificial Intelligence & Technology ETF (AIQ) and other AI-focused ETFs saw substantial drops, reflecting a broader unwinding of AI-related investments.
Valuation Concerns: The market correction is attributed to high valuations, with the Shiller CAPE ratio reaching levels not seen since the dot-com bubble, suggesting potential for low returns in the coming years.
Future of AI Investments: While the AI trade is not over, investors are facing the reality of market corrections, indicating a need for caution after a period of rapid gains.
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Analyst Views on VEA

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Investment Trends: Income-generating exchange-traded funds (ETFs) may become a strong defensive choice for investors in 2026, particularly in the face of inflation and changing interest rates, as they focus on stable distributions through dividend-paying stocks and bonds.
Popularity of Junk Bonds: The US High Yield Corporate Bond ETF (USHY) is gaining attention due to its high yields and extensive holdings, appealing to investors looking for higher returns amid changing interest rates, despite the inherent risks associated with junk bonds.
Global Bond Market Options: The VanEck Total International Bond ETF (BNDX) offers a broad approach to global bonds, featuring a diverse range of holdings and a focus on international markets, which may attract investors seeking to diversify their portfolios.
Emerging Income ETFs: The Vanguard FTSE Developed Markets ETF (VEA) is popular for its focus on equities from developed markets outside the U.S., providing a combination of capital growth and income generation, making it an attractive option for investors looking for exposure to international equities.

Market Outlook: J.P. Morgan analysts predict that equities in developed and emerging markets will outperform the S&P 500 over the next 10 to 15 years, with expected annual returns of 7.5% and 7.8%, respectively, compared to 6.7% for the S&P 500.
ETF Performance: The Vanguard FTSE Developed Markets ETF and the Vanguard FTSE Emerging Markets ETF have shown strong returns of 31% and 22% in 2025, respectively, benefiting from stronger foreign currencies against the U.S. dollar.
Investment Recommendations: While the Vanguard ETFs provide exposure to international stocks, analysts suggest maintaining a larger portion of investments in S&P 500 index funds and individual U.S. stocks due to historical performance.
Stock Advisor Insights: The Motley Fool's Stock Advisor has identified ten top stocks for investment, which have historically outperformed the market, emphasizing the importance of careful stock selection over broad index fund investments.
VEA Share Price Analysis: VEA's current share price is $61.92, with a 52-week low of $45.14 and a high of $62.315, indicating a strong performance near its high point.
Understanding ETFs: Exchange traded funds (ETFs) function like stocks, where investors buy and sell "units" that can be created or destroyed based on demand, impacting the underlying assets.
Monitoring ETF Flows: Weekly analysis of shares outstanding helps identify ETFs with significant inflows or outflows, which can affect the individual components held within those ETFs.
Disclaimer: The opinions expressed in the article are those of the author and do not necessarily represent the views of Nasdaq, Inc.

Investment Strategy Shift: The author has reduced their investment in U.S. stocks in favor of international markets, despite the S&P 500's 17% increase in 2025.
Performance of Non-U.S. Markets: Data indicates that investing in non-U.S. markets has yielded significantly higher returns compared to U.S. stocks this year.

Siligmueller & Norvid Wealth Advisors Exit: The firm completely liquidated its position in the First Trust Capital Strength ETF, selling 98,247 shares for approximately $8.87 million, which previously represented 3.4% of its assets under management (AUM).
Market Performance Context: The ETF's share price increased by 10.9% over the past year but underperformed the S&P 500 by 5.6 percentage points, indicating a potential shift in investment strategy towards higher-yield or growth assets.
Investment Strategy of FTCS: The First Trust Capital Strength ETF focuses on financially strong companies with solid balance sheets, appealing to investors seeking stability, especially in volatile markets.
Analyst Recommendations: The article highlights the importance of following stock tips from analysts, noting that Stock Advisor has significantly outperformed the S&P 500, suggesting potential investment opportunities for readers.
Market Sell-off: Wall Street experienced a significant sell-off, erasing over $500 billion in market value, with Palantir Technologies leading the decline despite positive earnings.
AI ETFs Decline: The Global X Artificial Intelligence & Technology ETF (AIQ) and other AI-focused ETFs saw substantial drops, reflecting a broader unwinding of AI-related investments.
Valuation Concerns: The market correction is attributed to high valuations, with the Shiller CAPE ratio reaching levels not seen since the dot-com bubble, suggesting potential for low returns in the coming years.
Future of AI Investments: While the AI trade is not over, investors are facing the reality of market corrections, indicating a need for caution after a period of rapid gains.








