The SPDR S&P 500 ETF Trust (SPY) ended 0.52% lower on Wednesday. The decline can be attributed to renewed U.S.-China trade tensions and disappointing earnings from the streaming giant, Netflix (NFLX).
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Within SPY’s holdings, Industrials, Consumer Discretionary, and Communication Services sectors underperformed today, while the Energy and Consumer Staples sectors posted gains.
Importantly, SPY closely tracks the S&P 500 Index (SPX), which also ended 0.5% lower. Further, the Nasdaq 100 (NDX) dropped 0.99%.
What Impacted the Market?
During the day, concerns about a U.S.-China trade war returned after a Reuters report said the White House may limit exports to China that use U.S. software. Also, Netflix stock (0.91% weight in SPY ETF) dropped 10% today after the company reported weaker-than-expected quarterly earnings and cited a one-time tax event in Brazil.
Further, the ongoing U.S. government shutdown continued to weigh on investor sentiment.
Looking ahead, Friday’s key CPI report and the effect of the shutdown could trigger volatility in the SPY ETF this week.
Fund Flows and Sentiment
SPY’s 5-day net flows totaled $4 billion, showing that investors added capital to SPY over the past five trading days. Meanwhile, its three-month average trading volume is 73.74 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 $753.63 for the SPY ETF implies an upside potential of 12.85%.
Currently, SPY’s five holdings with the highest upside potential are Moderna (MRNA), News Corporation (NWSA), Fiserv (FI), Charter Communications (CHTR), and GoDaddy (GDDY).
Meanwhile, its five holdings with the greatest downside potential are Intel (INTC), Paramount Skydance (PSKY), Super Micro Computer (SMCI), Tesla (TSLA), and Palantir (PLTR).
Revealingly, SPY’s ETF Smart Score is eight, implying that this ETF is likely to outperform the broader market.
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