Nasdaq Posts Worst July in 22 Years; Goldman Sachs Reviews ETF Resilience
Taylor Wilson
The Nasdaq 100 logged its worst July since 2004, yet Goldman Sachs found ETF inflows still accelerating underneath — semiconductor ETFs alone pulled in a record ~$13 billion even as the SOX index cratered, setting up a sharp divergence between price and money flow.
How bad was the sell-off, and where did it concentrate?
The Nasdaq Composite closed at 25,070.99, the S&P 500 at 7,425.44, and the Dow at 52,239.49.
The Nasdaq's monthly drawdown was significantly larger than the other two benchmarks. Tech bore the brunt.
This means → the market didn't sell off broadly; capital staged a selective retreat from high-valuation tech names.
Leveraged ETF assets shrank by $60 billion — so why is money still pouring in?
U.S.-listed leveraged/inverse ETF AUM stood at roughly $150 billion, down nearly $60 billion from the June peak. Net exposure fell about $170 billion in one month to around $300 billion.
In plain terms = prices dropped, so the book value shrank — but that doesn't mean investors fled. July net creations topped $6 billion; fresh money was still accelerating in.
The new inflows simply weren't large enough to offset the AUM loss from falling prices.
Just how extreme is leveraged-ETF trading volume?
June was the all-time record month for U.S. leveraged-ETF notional volume — roughly $60 billion per day, about 20% of all U.S.-listed ETF turnover.
July is on track for a top-five finish at ~$43 billion daily, equal to roughly 25% of July's average AUM.
This reflects an extraordinary turnover rate — even in a down market, leveraged-ETF traders are actively betting on direction, not sitting on the sidelines.
Semiconductor ETFs drew $13 billion in a 21% crash — what does that signal?
The Philadelphia Semiconductor Index (SOX) fell roughly 21% in July, one of its worst monthly prints in nearly two decades.
Yet SMH and SOXX together pulled in net creations of about $13 billion, on pace for the best monthly inflow since SMH's inception.
This means → prices were in free fall while capital was flowing in at a historic rate — a textbook "buy the dip" structure, with a cohort of investors betting on a rebound.
AI-themed mega-ETFs at one point accounted for over 19% of all U.S. ETF trading volume — out of more than 5,500 listed products. Concentration was extreme.
Is the broader ETF industry still healthy?
Industry-wide annualized inflows reached $2.1 trillion, roughly 50% above the 2025 full-year record.
New launches are accelerating: the past two months saw more ETF listings than all of H1 2024.
The product mix skews heavily toward innovation: 54% use derivatives, over 33% are leveraged/inverse, and year-to-date leveraged-ETF filings have surpassed 1,000.
Buy-the-dip conviction or retail habit — which is it?
Semiconductor ETFs posted their strongest-ever monthly net inflows during a deep index drawdown. The core question: is the market pricing in a rebound, or is this simply retail's reflex to buy every dip?
In plain terms = money is entering — that's a fact. But whether it's "smart money" or "muscle-memory money" is something only subsequent price action can answer.
Goldman's takeaway is structural: ETF demand resilience did not break down with falling prices — but resilience is not the same as being right.
Content is for reference only, not financial advice.