The SPDR S&P 500 ETF Trust (SPY) gained 0.46% on Tuesday, primarily driven by a stronger-than-expected third-quarter U.S. GDP report and gains in growth-oriented technology stocks.
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Within SPY’s holdings, the Communication Services, Technology, and Energy sectors gained the most today, while the Consumer Staples, Healthcare, and Industrials sectors declined.
Importantly, SPY closely tracks the S&P 500 Index (SPX), which was up 0.46%, while the tech-heavy Nasdaq-100 (NDX) rose 0.5%.
It must be noted that the market will close early at 1 p.m. ET on Wednesday, December 24, and will be closed all day on Thursday, December 25, for Christmas.
Fund Flows and Sentiment
SPY’s five-day net outflows totaled $4 billion, showing that investors pulled out capital from SPY over the past five trading days. Meanwhile, its three-month average trading volume is 82.09 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.
Key Catalysts That Can Move SPY ETF
The primary catalysts that can move the SPY ETF during the holiday-shortened week include key economic data releases, ongoing AI trade momentum, and low trading volumes.
Trading volumes will likely be low because of the Christmas holiday, and this thin liquidity can make the market more volatile. This means that even small events could cause bigger‑than‑usual moves in the SPY ETF.
The “Santa Claus rally” period begins on December 24 and lasts through the first two trading days of the new year. Markets may be influenced by the historical tendency for stocks to rally during this period.
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 $793.12 for the SPY ETF implies an upside potential of 15.29%.
Currently, SPY’s five holdings with the highest upside potential are:
Meanwhile, its five holdings with the greatest downside potential are:
- Tesla (TSLA)
- Warner Bros. Discovery (WBD)
- Moderna (MRNA)
- JB Hunt Transport (JBHT)
- Expeditors International of Washington (EXPD)
Revealingly, SPY’s ETF Smart Score is an eight, implying that this ETF is likely to outperform the broader market over the long term.
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