The stock market has experienced a V-shaped rebound from the fall at the beginning of the month, but the rebound in some sectors is more vigorous than in other sectors.

After a difficult start in August, the stock market has started to rebound. Although some stocks perform better than others, the rebound indicates that investors hold a cautious and optimistic attitude towards the economy and are eager to lock in profits.

The S&P 500 index has risen for eight consecutive days before a slight drop on Tuesday. The index is currently only 1.3% away from the historical high on July 16. But as research institution DataTrek pointed out, some areas of the stock market are more difficult to recover than others.

Defensive sectors such as utilities and bulk consumption have been the biggest winners so far, both of which have surpassed the mid-July highs. Stocks with stronger cyclical nature, such as technology stocks and consumer companies, are still far below the peak reached last month.

One way to interpret these results is to assume that investors are cautious about the economy and are only looking for the most stable stocks in the market. But DataTrek pointed out that this cannot explain everything. Financial and real estate stocks usually perform poorly during an economic downturn, but they have also reached new highs, just not as strong as the most defensive industries.

DataTrek pointed out that real estate investment trusts often follow the prosperity and depression of commercial real estate markets, while financial stocks are sensitive to asset prices and defaults. The company's research report states: "Because this industry is on the rise, we know that investors are still optimistic about future economic growth."

Therefore, a better explanation is that investors expect the Federal Reserve to cut interest rates in September at the earliest, and they are just looking for stocks with higher yields to make up for the decline in bond yields. The utility select industry SPDR ETF, which DataTrek uses as a representative of utility stocks, has a yield of 2.9%. The consumer select industry SPDR ETF has a yield of 2.3%. Both yields are much higher than the overall yield of the S&P 500 index of about 1.2%.

Although this explanation is reasonable, industry funds are not the only way for investors to continue to bet on a strong economy, and they can also aim for attractive returns. The performance of ProShares S&P 500 Dividend Aristocrats ETF shows that buyers are doing this, focusing on companies that have paid and increased dividends for the past 25 years.

ProShares ETF has recently hit a historical high. Its yield is about 2.1%.

In terms of bonds, investors also seem to be seeking attractive yields before the next move of the Federal Reserve. However, another dynamic is at play in the bond market.

In many cases, bond investors have been buying securities with lower yields. This is because their main goal is to lock in the current interest rate for as long as possible. In the case of a still-inverted yield curve, the yield on longer-term bonds is often lower than that on shorter-term bonds.

In the past week, the bond ETF that attracted the most new investor funds was the iShares 20+ Year Treasury Bond ETF, which attracted over $0.9 billion. The fund has a yield of 4.2%. In contrast, the iShares 0-3 Month Treasury Bond ETF with a one-percentage-point higher yield attracted only about $0.5 billion.