The SPDR S&P 500 ETF Trust (SPY) tanked 1.1% on Wednesday. Key factors impacting the performance included a technology-led sell-off amid AI funding concerns, weak Q4 earnings from homebuilder Lennar (LEN), and rising energy stocks due to geopolitical tensions.
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Within SPY’s holdings, the Energy, Consumer Staples, and Materials sectors gained today, while the Communication Services, Technology, and Industrials sectors declined the most.
Importantly, SPY closely tracks the S&P 500 Index (SPX), which was down 1.16%, while the tech-heavy Nasdaq-100 (NDX) declined 1.93%.
Key Catalysts That Can Move SPY This Week
The primary catalysts that can impact the SPY ETF this week are key U.S. economic data releases, several major central bank interest rate decisions, and earnings reports from large companies.
The Consumer Price Index (CPI) inflation data for November, a key metric for the Fed’s inflation assessment, is also set for release tomorrow. Also, the final revision of the University of Michigan’s consumer sentiment index, due on Friday, will offer insight into consumer confidence.
The week also includes interest rate decisions from major global central banks, which might create volatility. The European Central Bank (ECB), the Bank of Japan (BoJ), and the Bank of England (BoE) are expected to announce their latest interest rate decisions.
Further, investors are awaiting this week’s S&P 500 and Nasdaq‑100 index rebalancing, which can shift stock weights and spark volatility.
Finally, earnings from major companies, some of which are top holdings in the SPY ETF, such as FedEx (FDX), Nike (NKE), Carnival (CCL), and Accenture (ACN), could also move the market.
Fund Flows and Sentiment
SPY’s five-day net inflows totaled $5 billion, showing that investors put capital into SPY over the past five trading days. Meanwhile, its three-month average trading volume is 80.73 million shares.
It must be noted that the retail sentiment for the SPY ETF is positive, while hedge fund managers have decreased their holdings of the ETF in the last quarter.
SPY’s Price Forecast
According to TipRanks’ unique ETF analyst consensus, which is based on a weighted average of analyst ratings on its holdings, SPY has a Moderate Buy rating. The Street’s average price target of $800.76 for the SPY ETF implies an upside potential of 19.27%.
Currently, SPY’s five holdings with the highest upside potential are:
Meanwhile, its five holdings with the greatest downside potential are:
- Warner Bros. Discovery (WBD)
- Tesla (TSLA)
- Expeditors International of Washington (EXPD)
- JB Hunt Transport (JBHT)
- Albemarle (ALB)
Revealingly, SPY’s ETF Smart Score is a seven, implying that this ETF is likely to perform in line with the broader market over the long term.
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