ETFs to Gain as Inflation Edges Higher in August

Inflation Data - The U.S. annual inflation rate accelerated to 2.9% in August 2025, the highest since January, after remaining at 2.7% in June and July [2] - On a monthly basis, the CPI rose 0.4%, exceeding forecasts of 0.3%, driven by persistent gasoline prices and stronger food inflation [3] - Core inflation remained steady at 3.1%, with a monthly increase in core CPI of 0.3%, consistent with July's growth [4] Economic Indicators - The U.S. economy grew at an annualized rate of 3.3% in Q2 of 2025, rebounding from a 0.5% contraction in Q1, with the figure revised slightly higher from the first estimate of 3% [6] - For Q3 of 2025, total S&P 500 index earnings are expected to increase by 5.1% year-over-year, supported by a 5.9% rise in revenues, with positive revisions trends noted [7] Federal Reserve Policy - There is a 92.5% chance of a 25-basis point rate cut in the September meeting, while the likelihood of a 50-basis point cut is 7.5%, with expectations shifting due to the recent inflation data [8] Investment Opportunities - In light of the economic conditions and potential moderate rate cuts, several large-cap blend ETFs are highlighted as attractive options, including: - First Trust Dow 30 Equal Weight ETF (EDOW) – Zacks Rank 2 (Buy) [9] - iShares Core S&P Total U.S. Stock Market ETF (ITOT) – Zacks Rank 2 [9] - iShares Core S&P 500 ETF (IVV) – Zacks Rank 1 (Strong Buy) [9] - iShares S&P 100 ETF (OEF) – Zacks Rank 2 [9] - Invesco S&P 500 Quality ETF (SPHQ) – Zacks Rank 2 [10]