International, Tech ETFs Rally as Tariff Easing Spurs Rebalancing

Tariff Rollbacks Drive Surge in Foreign and Technology ETFs

ETFs tracking international equities and technology stocks are showing strong upward momentum as global macroeconomic and political events reshape investor behavior. The recent U.S.-China agreement on a 90-day rollback of selected tariffs has sent a wave of optimism across global markets, helping several international ETFs deliver double-digit gains.

Europe is leading the pack, with ETFs tied to Germany, Poland, and Spain outperforming due to strong domestic stimulus efforts and fiscal expansion. Germany’s €500 billion infrastructure and defense package, in particular, has been credited with sparking renewed investor confidence. U.S.-listed ETFs focused on these regions have jumped as much as 48% year-to-date, according to Investors.com.

Emerging market ETFs are also benefitting. Funds tracking Brazil, Mexico, and Chile have risen sharply, driven by increased global demand for commodities and favorable trade shifts following the easing of tariff pressures. Additionally, a weakening U.S. dollar has made these international investments more attractive to American investors.

Technology-focused ETFs are seeing parallel gains. Major U.S. tech firms like Apple, Microsoft, Nvidia, and Amazon surged following the trade announcement, lifting ETFs such as the Roundhill Magnificent Seven by 4% in a single day. Semiconductor stocks, including AMD and Broadcom, also posted significant increases, as reported by Investopedia.

Defense and AI-Managed ETFs Adapt to Shifting Risk Environment

Geopolitical tensions are also reshaping flows within the ETF space, particularly in the defense sector. Amid escalating friction between India and Pakistan, investors are rotating into military and defense-related ETFs. Funds from Groww and Motilal Oswal have gained up to 7% over the past two weeks, reflecting increased interest in national security sectors during periods of uncertainty. This trend has been covered in detail by Times of India.

Meanwhile, AI-driven ETFs are rebalancing portfolios to reflect new market expectations. Qraft Technologies’ AMOM momentum fund recently dropped holdings in Meta and Walmart, opting instead for stocks such as Broadcom, Eli Lilly, Netflix, and Palantir based on April’s performance trends. Its more diversified QRFT ETF has been outperforming broader benchmarks by maintaining exposure to large-cap tech stocks while hedging against downside risk.

Looking ahead, ETF markets continue to evolve rapidly, with active ETFs now making up over 50% of new product launches in Australia and other key regions. Daily trading volumes for ETFs are also expected to top AU$600 million, reinforcing the growing relevance of ETFs in institutional and retail portfolios alike.

Investors are closely watching the next wave of macroeconomic data and global policy shifts to determine how these trends will play out across various ETF segments through the rest of 2025