The SPDR S&P 500 ETF Trust (SPY) declined 0.93% on Monday. The performance was impacted by weakness in key technology stocks and investor caution ahead of Nvidia’s (NVDA) earnings report later in the week. The market also reacted to uncertainty about potential future interest rate cuts by the Federal Reserve.
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Within SPY’s holdings, Communication Services and Utilities sectors posted gains today, while the Materials, Financials, Energy, Technology, and Industrials sectors declined the most.
Importantly, SPY closely tracks the S&P 500 Index (SPX), which fell 0.92%, while the tech-heavy Nasdaq 100 (NDX) was down 0.83%.
Key Catalysts That Can Move SPY
The key catalysts for the SPY this week are major U.S. economic data releases (delayed by the recent government shutdown). Also, the release of the minutes from the Federal Open Market Committee’s (FOMC) last meeting will be watched for clues about future interest rate policy.
Importantly, Nvidia’s (NVDA) Q3 earnings report will be a primary focus. As the largest weighting in the S&P 500 and a key player in the AI boom, its performance and outlook could significantly affect market sentiment.
Also, several major retailers such as Walmart (WMT), Home Depot (HD), Target (TGT), and Lowe’s (LOW) are scheduled to report this week. Results from these companies will help shed light on the consumer spending trends during uncertainty.
Fund Flows and Sentiment
SPY’s 5-day net inflows totaled $1 billion, showing that investors put capital into SPY over the past five trading days. Meanwhile, its three-month average trading volume is 75.14 million shares.
It must be noted that currently, retail sentiment for the SPY ETF is Positive, while hedge fund managers have increased their holdings of the 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 $783.85 for the SPY ETF implies an upside potential of 17.75%.
Currently, SPY’s five holdings with the highest upside potential are Loews (L), Fiserv (FI), DuPont de Nemours (DD), Moderna (MRNA), and Oracle (ORCL).
Meanwhile, its five holdings with the greatest downside potential are Albemarle (ALB), Incyte (INCY), Expeditors (EXPD), Micron (MU), and Paramount Skydance (PSKY).
Revealingly, SPY’s ETF Smart Score is a seven, implying that this ETF is likely to perform in line with the broader market.
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