Will Any Kind of S&P 500 Rebound be Temporary? ETFs in Focus

Any rebound in the S&P 500 Index is expected to be short-lived due to concerns about the U.S. economy, according to Goldman Sachs strategists, as quoted on Yahoo Finance. While investor exposure declined last week as the benchmark briefly erased its 2025 gains, it remains too high to suggest a significant tactical upside, strategist David Kostin wrote in a note.Economic Growth Key to Market RecoveryKostin emphasized that a stronger U.S. economic growth outlook is necessary to fully reverse recent equity market weakness. Reflecting this outlook, he has revised his full-year earnings growth estimate downward from 11% to 9%. Kostin now predicts that equity returns in 2025 will be more modest, aligning with the trajectory of earnings growth.Concerns Over Valuations and Policy ImpactU.S. stocks have struggled this year, weighed down by concerns over lofty valuations in the technology sector. Investors are also assessing the potential inflationary impact of President Donald Trump’s America-First policies and whether they could slow economic growth. So far, the S&P 500 has gained only about 1% in 2025, while the MSCI All-Country World Index, excluding the United States, has risen by 5%.Lack of Conviction in Sustained Market RecoveryGoldman Sachs’ managing director for global markets, Scott Rubner, remains unconvinced that stock demand is strong enough to support a sustained rebound. Having turned bearish last month, he cites fading inflows from retail and other investors, suggesting that the market is in the final stages of a positioning reset.Wall of WorriesEconomic data for the first quarter of 2025 indicates a potential contraction, according to the Federal Reserve Bank of Atlanta's GDPNow tracker, as quoted on CNBC. The model now predicts a 1.5% decline in GDP for the January-to-March period, a sharp decline from its earlier projection of 2.3% growth.On March 5, 2025, fresh data from ADP revealed that the private sector added 75,000 jobs in February, far fewer than economists' estimates of 140,000 — and significantly lower than the 186,000 jobs added in January. February's data marked the largest month-over-month decline in private payroll additions since March 2023. This is another sign of a slowdown.Trade tensions took center stage amid the U.S. economic slowdown. Trump's 25% across-the-board tariffs on Canada and Mexico went into effect on Tuesday, March 4. Canada retaliated with a package of tariffs on $107 billion of U.S. products.Duties on China went into effect in early February, and China retaliated. Trump's second move doubled the rate of tariffs on Chinese imports to 20% from March 4. China has responded with up to 15% duties on U.S. farm goods. Trump has indicated the imposition of tariffs on the EU in a move that could take his trade war to the other side of the pond. Since large-cap stocks have greater global exposure, trade tensions are likely to hurt large-cap stocks more.How to Navigate the Difficult Times? Investors can seek shelter in safer exchange-traded funds (ETFs) like the Roundhill Innovation-100 0DTE Covered Call Strategy ETF QDTE, Defiance Nasdaq-100 Enhanced Option Income ETF QQQY and Defiance S&p 500 Enhanced Options & Odte Income ETF WDTE.Investors should note that Zero Days to Expiration (0DTE) ETFs are exchange-traded funds that utilize options contracts expiring on the same day they are traded. This strategy aims to generate income by capitalizing on the time decay of options premiums.QDTE in FocusThe Roundhill Innovation-100 0DTE Covered Call Strategy ETF seeks to provide overnight exposure to the Innovation-100 Index and generate income each morning by selling out-of-the-money 0DTE calls on the Index. The ETF yields 40.83% annually and charges 95 bps in fees.QQQY in Focus The Defiance Nasdaq 100 Enhanced Options & 0DTE Income ETF is an actively managed ETF that seeks enhanced income, constructed of treasuries and Nasdaq-100 index options. The ETF yields 74.54% annually and its expense ratio is 1.00%.WDTE in Focus The Defiance S&P 500 Enhanced Options & 0DTE Income ETF is an actively managed exchange-traded fund that seeks enhanced income. It is constructed of treasuries and S&P 500 index options. The ETF yields 47.26% annually and charges 101 bps in fees.   Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks