MARKET OUTLOOK

QQQ quarterly outlook report

17 August 2026
Paul J. Schroeder,
Paul J. Schroeder
QQQ Equity Strategist, ETFs & Indexed Strategies
Tim McLaughlin
QQQ Equity Product Strategist

    • The Trust seeks to track the investment results, before fees and expenses, of the Nasdaq-100 Index (“Index”). 
    • Investors should note the equity market risk, concentration risk of investing in the US market and in companies in the technology sector, technology sector risks, passive investment risk, trading risks, trading hours different risk, foreign exchange risks, multi-counter risks, reliance on market maker risks, termination risk and general investment risk.
    • The Trust may be subject to tracking error risk, which is the risk that its performance may not track that of the Index exactly. 
    • Payment of distributions out of capital or effectively out of capital amounts to a return or withdrawal of part of an investor’s original investment or from any capital gains attributable to that original investment and may result in an immediate reduction in the Net Asset Value (“NAV”) per share of the Trust (“Share”).
    • All Shares will receive distributions in the base currency (USD) only. In the event that a Trust Shareholder has no USD account, the Trust Shareholder may have to bear the fees and charges associated with the conversion of such distributions from USD to HKD or RMB or any other currency.
    • NAV and trading price of the Shares can be volatile and could go down substantially.
    • Investors should not base their investment decision on this material alone.
Performance Takeaways
  • Invesco QQQ’ NAV posted one of its strongest quarterly performances (3/31/26 – 6/30/26), with a total return of 27.68%, outperforming the S&P 500 which returned 15.20%
  • QQQ’s overweight exposure and differentiated holdings in the Technology sector and its underweight exposure and differentiated holdings to the Energy sector (per Industry Classification Benchmark- ICB) were the largest contributors to relative performance against the S&P 500 Index.
  • The strong returns in major U.S. equity indices masked the volatility actually experienced during the quarter as investors focused on conflict in the Middle East, concerns around AI-focused companies and a potential shift in Federal Reserve monetary policy.

Calendar year performance: a)Invesco QQQ Trust - 2025: 20.77%; 2024: 25.60%; 2023: 54.76%; 2022: -32.49%; 2021: 27.25%, b)Nasdaq-100 Index - 2025: 20.17%; 2024: 25.88%; 2023: 55.13%; 2022: -32.38%; 2021: 27.51%. Source: Invesco. Due to different sources, results may be different. Past performance of the Share is calculated in USD including ongoing charges and excluding the Trust's trading costs on the SEHK. Past performance is not a guide to future performance. Investors may not get back the full amount invested. The computation basis of the performance is based on the calendar year end, NAV-To-NAV, with dividend reinvested. These figures show by how much the Share increased or decreased in value during the calendar year being shown.

QQQ Q1 Highlights

Nasdaq implemented a “Fast Entry” provision to the Nasdaq-100’s methodology in May. While this was only one of a few changes that occurred, the new Fast Entry rule received the most attention as SpaceX’s initial public offering (IPO) occurred in June. The key aspect of the rule is that it allows companies that have recently gone public be added to the Nasdaq-100, and QQQ, as early as 15 days after the IPO. If the total market capitalization of the company places it in the top 40 companies, then it is eligible for Fast Entry. The free float, the portion of a company's outstanding shares that is available for public trading in the market, is compared to the total market cap and if it is less than one third then the free float value is multiplied by three. That number is used to determine the weight of the new security in the Nasdaq-100 and QQQ.

SpaceX went public on June 12th, 2026 with a free float of approximately 5%. It was announced on June 26th after market close that it would be included in the index and QQQ, effective on July 7th, prior to market open. It was anticipated that SpaceX would receive a weight between 1.25% and 1.35%.

Even with the Magnificent 71 underperforming, the Invesco QQQ ETF’s (QQQ) NAV rose by 27.68% (3/31/2026 – 6/30/2026). QQQ outperformed the S&P 500’s total return of 15.20% and the Russell 1000 Growth Index’s2 16.74% quarterly return. Value oriented companies underperformed with the Russell 1000 Value3 up 13.87%. Small-cap performed well as shown by the 21.49% return of the Russell 2000.4 Six sectors (per Industry Classification Benchmark- ICB) out of the ten that QQQ has exposure to finished in positive territory for the quarter with seven out of ten sectors positively contributing to relative performance against the S&P 500 Index.

QQQ’s overweight exposure and differentiated holdings in the Technology sector and underweight exposure and differentiated holdings in the Energy sector were the largest contributors to relative performance against the S&P 500 Index. For the quarter, the Technology sector averaged a 64.75% weight in QQQ (vs. a 43.28% weight in the S&P 500) and returned 45.14% (vs. 29.07% in the S&P 500). Real Estate was the worst performing sector in QQQ for Q2 with absolute performance of -17.70% and had an average weight of 0.04%. Overweight exposure and differentiated holdings in the Consumer Discretionary sector were the largest detractor to relative performance vs. the S&P 500. Consumer Discretionary had an average weight of 18.74% and returned 1.71%.

Single Stock Performance

The best-performing stocks in QQQ for Q2 were Micron Technology (241.67%), Intel (216.41%) and Marvell Technology (200.89%). The worst performers for the quarter were Charter Communications (-41.84%), Insmed (-39.70%) and Intuit (-39.44%).

Invesco QQQ (NAV) vs. S&P 500 Index

Source: Bloomberg L.P., as of 06/30/2026. Due to different sources, results may be different. 

Note: All periods represent calendar years. Performance data quoted represents past performance, which is not a guarantee of future results; current performance may be higher or lower than performance quoted. Investment returns, and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. Market returns do not represent the returns an investor would receive if shares were traded at other times. An investor cannot invest directly in an index. Index returns do not represent Fund returns.

Market Drivers During Q2

The second quarter of 2026 was one of the strongest periods for U.S. equities in recent years, with the S&P 500 and Nasdaq-100 posting their best quarterly performances since 2020. In Q2 of 2020 the S&P 500 and Nasdaq-100 returned 20.5% and 30.2%, respectively, and was the last quarter that exceeded the Q2 2026 performance of both indexes. Quarterly performance for market gains were reflected by a combination of powerful fundamental and macroeconomic catalysts that appeared to inspire many investors to purchase equities. While several factors influenced returns during the quarter, many believed that the primary drivers of stock performance were accelerating artificial intelligence (AI) investment, strong corporate earnings growth, easing geopolitical tensions in the Middle East and evolving expectations for Federal Reserve policy.

One of the more influential catalysts was stronger-than-expected corporate earnings. Throughout the quarter, many companies reported robust revenue growth, resilient margins, and healthy demand despite concerns about inflation and slowing economic activity. Large-cap technology firms were particularly influential, as their earnings results appeared to support strong fundamental growth. Beyond technology, many sectors demonstrated resilience, helping many investors gain confidence that the economic expansion remained intact. The combination of solid earnings growth and expanding profit margins may have reduced fears of a profit slowdown and could have helped provide a basis for the move up.

A second major catalyst was the continued buildout of AI infrastructure. Demand for AI computing power drove many hyperscale cloud providers and technology companies to increase capital. Many investors gravitated towards companies directly benefiting from the surge in AI infrastructure spending, particularly semiconductor manufacturers, memory chip producers and other firms enabling the expansion of data center capacity. As the quarter progressed, investors increasingly differentiated between companies currently generating revenue and earnings from AI adoption and those still investing heavily in future opportunities, seemingly favoring businesses with demonstrated profitability and strong cash flows.

Geopolitical developments also played a significant role in driving market performance during the quarter. Early concerns surrounding the U.S. - Iran conflict created volatility and contributed to higher oil prices. However, as tensions eased and a ceasefire emerged, energy markets reversed much of the gain seen in March and early April. The decline in oil prices reduced some inflation concerns and improved the outlook for consumers and businesses alike. Lower energy costs helped support expectations for continued economic growth while reducing fears that geopolitical instability would disrupt global markets. Investors worried less about worst-case scenarios which helped contribute to the broad rally across equity indices.

Finally, changing expectations regarding Federal Reserve policy influenced investor behavior throughout the quarter. Many market participants closely monitored inflation data, labor market trends, and Federal Reserve communications for clues about the future path of interest rates. While policy uncertainty remained elevated, the Federal Reserve’s willingness to maintain a restrictive stance at the June Federal Open Market Committee (FOMC)5 meeting reinforced the view that interest rates could remain higher for longer. Although economic growth remained resilient, persistent inflation pressures and a still-solid labor market reduced expectations for imminent policy easing. New FOMC Chairman Kevin Warsh stated that there is potential for the Committee to be less transparent on monetary policy going forward. The combination of these two factors caused many investors to question if volatility in interest rates will rise or fall going forward.

Year-over-Year Inflation, Consumer Price Index⁶ (%)

Source: Bloomberg L.P., as of 06/30/2026.

Outlook

With the messaging from Kevin Warsh that the FOMC will provide less transparency going forward, economic releases will play a larger role for many investors speculating on future monetary policy. As inflation readings have trended higher and the U.S. job market has remained steady, the potential for a rate hike has become a concern for some. Productivity, gross domestic product (GDP) growth, employment readings and inflation in both end good and production costs will be key areas of focus.

While a cease fire had been agreed to between the U.S. and Iran, incidents of violence still occurred. Peace talks appeared to move forward but there was no official treaty or agreement of long term peace announced. Reports came to light that the two sides were too far apart on issues such as Iran’s nuclear program, economic sanctions and security concerns in the Middle East region. If no progress or escalation occurs, the potential for higher energy prices, leading to higher inflation, and increased volatility becomes greater.

Capital expenditure will continue to be a focus for many investors. Looking at financial guidance issued from companies, capex is projected to reach over $800 billion in 2026 in relation to the AI infrastructure build out. Therefore, revenue growth and profit margins will be watched closely. Amongst the well-known QQQ companies, Netflix is the first to announce on July 16th, followed by Tesla on the 22nd and Alphabet and Intel on the 23rd. Microsoft will announce on July 28th, followed by Meta Platforms and Apple on the 30th. Amazon announces results on July 31st with Nvidia and Micron arriving on August 28th and September 23rd, respectively.

  • 1

    The Magnificent Seven stocks refer to Amazon, Apple, Alphabet, Meta, Microsoft, Nvidia, and Tesla.
  • 2

    The Russell 1000® Growth Index measures the performance of the large-cap growth segment of U.S. equities.
  • 3

    The Russell 1000® Value Index measures the performance of the large-cap value segment of U.S. equities.
  • 4

    The Russell 2000 Index tracks about 2,000 small-capitalization U.S. companies, representing the small-cap segment of the American stock market, and serves as a key benchmark for overall U.S. economic health and small-company performance.
  • 5

    The Federal Open Market Committee (FOMC) is a committee of the Federal Reserve Board that meets regularly to set monetary policy, including the interest rates that are charged to banks.
  • 6

    The Consumer Price Index (CPI) measures the change in consumer prices and is a commonly cited measure of inflation.

  • All data is from Bloomberg, L.P.  as of 06/30/2026, unless otherwise noted.

    All returns are based off NAV. Returns are cumulative unless otherwise noted.

    Holdings are subject to change and are not buy/sell recommendations.

    These comments should not be construed as recommendations. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations.

    The opinions expressed are those of the author, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.

    Investment involves risks. The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested. Past performance is not indicative of future performance.

    Investments focused in a particular sector, such as technology, are subject to greater risk, and are more greatly impacted by market volatility, than more diversified investments.

    The Nasdaq-100® Index comprises the 100 largest non-financial companies traded on the Nasdaq. An investor cannot invest directly in an index.

    The sponsor and adviser of the Invesco QQQ TrustSM is Invesco Capital Management LLC. NASDAQ, Nasdaq-100 Index, Nasdaq-100 Index Tracking Stock and QQQ are trade/service marks of The Nasdaq Stock Market, Inc. and have been licensed for use by Invesco, QQQ's sponsor. NASDAQ makes no representation regarding the advisability of investing in QQQ and makes no warranty and bears no liability with respect to QQQ, the Nasdaq-100 Index, its use or any data included therein.

    The Index and Fund use the Industry Classification Benchmark (“ICB”) classification system which is composed of 11 economic industries: basic materials, consumer discretionary, consumer staples, energy, financials, health care, industrials, real estate, technology, telecommunications and utilities.

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