The SPDR S&P 500 ETF Trust (SPY) declined 1.08% on Thursday. Tech stock weakness following earnings reports from Meta (META) and Microsoft (MSFT), along with cautious investor sentiment due to AI spending concerns, hurt the ETF’s performance.
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Within SPY’s holdings, the Real Estate, Financial, and Healthcare sectors posted gains today, while the Consumer Discretionary, Communication Services, and Technology sectors declined.
Importantly, SPY closely tracks the S&P 500 Index (SPX), which ended 0.99% lower. Also, the tech-heavy Nasdaq 100 (NDX) fell 1.47%.
What Impacted the Market Today?
Several factors impacted the SPY ETF’s performance today. These include sharp drops in META and MSFT stocks following their earnings reports. The mixed tech earnings fueled broader market concerns about the sustainability of massive AI-related spending.
Also, rising bond yields added pressure to the stock market and pushed the S&P 500 (which SPY tracks) lower. Further, hints from Fed Chair Powell that a December rate cut is not guaranteed raised market uncertainty.
Looking ahead, the ongoing U.S. government shutdown and earnings reports from two of the “Magnificent Seven” companies today could trigger volatility in the SPY ETF.
Fund Flows and Sentiment
SPY’s 5-day net inflows totaled $2 billion, showing that investors put capital in SPY over the past five trading days. Meanwhile, its three-month average trading volume is 74.16 million shares.
It must be noted that retail sentiment remains neutral, while hedge fund managers increased their holdings of the SPY ETF in the last quarter.
SPY’s Price Forecasts and Holdings
According to TipRanks’ unique ETF analyst consensus, which is based on a weighted average of analyst ratings on its holdings, SPY is a Moderate Buy. The Street’s average price target of $762.88 for the SPY ETF implies an upside potential of 12.22%.
Currently, SPY’s five holdings with the highest upside potential are Fiserv (FI), Moderna (MRNA), Alexandria Real Estate Equities (ARE), Smurfit Westrock (SW), and GoDaddy (GDDY).
Meanwhile, its five holdings with the greatest downside potential are Palantir (PLTR), Tesla (TSLA), Super Micro Computer (SMCI), Paramount Skydance (PSKY), and Intel (INTC).
Revealingly, SPY’s ETF Smart Score is eight, implying that this ETF is likely to outperform the broader market.
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