Wall Street Bloodbath: Use It to Buy These ETFs

Wall Street experienced a bloodbath on March 10, 2025 as the selling pressures that weighed on U.S. stocks last week continued. The Nasdaq slumped 4% on the day, marking its biggest one-day loss since September 2022. The S&P 500 and the Dow Jones retreated 2.7% and 2.1%, respectively.

Investors remained anxious about a likely economic slowdown, particularly after President Donald Trump did not dismiss the possibility of a recession amid ongoing U.S. tariffs.

Investor Concerns Over Tariffs and Recession

Stocks have been under pressure as investors worry that tariffs imposed by the Trump administration could lead to a recession. These levies may drive prices higher, potentially making it more difficult for the Federal Reserve to lower interest rates.

In an interview on Fox News, Trump addressed concerns about a possible recession, describing the economic situation as "a period of transition," as quoted on CNBC.

Market Analyst Insights

According to Sam Stovall, chief investment strategist at CFRA Research, the current market downturn is a "manufactured correction" caused by the new administration’s tariff policies, as quoted on CNBC.

Investor concerns are rising as discussions about a potential recession gain traction. According to Stovall, the market is experiencing a typical pullback that will likely lead to a mild correction. In the long run, this adjustment could help reset the market and support the continuation of the bull run.

Against this backdrop, we highlight a few downbeat exchange-traded funds (ETFs) below. Some of these ETFs are good income plays, while others are decent growth plays.

ETFs to Buy

Tech-software ETF Hits Lowest Level Since October

During Monday’s trading session, iShares Expanded Tech-Software Sector ETF IGV hit its lowest level since October. Investors with a strong appetite for risks may tap this ETF as tech sector stocks and ETFs may rule in Trump’s second term (read: Tech Sector ETFs Set to Rule Under Trump's Second Term?).

One of Trump’s first executive actions was rolling back regulations imposed by the previous administration on artificial intelligence (AI). In January itself, President Donald Trump announced a $500 billion AI infrastructure initiative, spearheading a new company called Stargate. Agreed, DeepSeek buzz hit the space hard lately. However, low-cost AI innovations may be in the cards for U.S. tech companies as well (read: 4 Reasons to Buy the Dip in Nasdaq ETFs).

Preferred ETFs at One-Month Low Can be Tapped for Income

Several preferred ETFs have been trading at a one-month low level. Preferred stocks are a type of equity that combines features of both stocks and bonds. They offer fixed dividend payments. Unlike common stocks, preferred shareholders generally do not have voting rights. Still, they receive dividend payments before common shareholders and have a higher claim on assets if the company goes bankrupt. Global X Variable Rate Preferred ETF PFFV, which trades at a month-low level, yields 7.32% annually.

Senior Loan ETFs Trading at 2025 Low: Another Income Pick

Franklin Senior Loan ETF FLBL is hovering around a year-to-date low. A senior loan ETF is an exchange-traded fund that invests in senior secured loans, also known as bank loans or leveraged loans. These are floating-rate loans issued by corporations, typically to finance acquisitions or restructuring. Senior loans are backed by a company’s assets, making them less risky than unsecured bonds in case of default. The FLBL ETF yields 7.71% annually.

Semiconductor ETF SOXX at a 6-Month Low

iShares Semiconductor ETF SOXX, with a Zacks Rank #1 (Strong Buy), is trading at a six-month low. The ETF has been going through ups and downs. While one positive development is boosting the fund, trade tensions and Chinese AI initiatives have been weighing on it. Whatever the case, we believe that the future for semiconductors should be in the pink over the long term. The ETF SOXX is off about 10% this year (as of March 9, 2025).

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This article originally published on Zacks Investment Research (zacks.com).

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