The SPDR S&P 500 ETF Trust (SPY) gained 0.27% on Tuesday. Importantly, the ETF hit a new all-time high of $688.90 during the day. The upside was driven by big gains in tech stocks such as Nvidia (NVDA) and rising hopes of a Federal Reserve interest rate cut.
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Within SPY’s holdings, the Technology and Materials sectors posted gains today, while the Real Estate, Utilities, and Energy sectors declined.
Importantly, SPY closely tracks the S&P 500 Index (SPX), which also ended 0.23% higher. Further, the Nasdaq 100 (NDX) gained 0.74%.
What Impacted the Market Today?
Ahead of a two-day Federal Open Market Committee (FOMC) meeting, markets priced in a near-certain 25 basis point rate cut, boosting investor confidence. Also, the positive sentiment is driven by optimism for artificial intelligence (AI) stocks. Nvidia stock rose 5% today, hitting a new all-time high. In addition, strong quarterly earnings from major companies, such as UPS (UPS) and PayPal (PYPL), drove market sentiment.
In contrast, Amazon (AMZN) announced corporate layoffs, raising concerns about the Technology sector. Also, persistent geopolitical risks and recent U.S.-China trade tensions continued to be a source of volatility.
Looking ahead, the Fed interest rate decision on October 29, the ongoing U.S. government shutdown, and earnings reports from five “Magnificent Seven” companies later this week could trigger volatility in the SPY ETF.
Fund Flows and Sentiment
SPY’s 5-day net outflows totaled $3 billion, showing that investors pulled capital from SPY over the past five trading days. Meanwhile, its three-month average trading volume is 74.02 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 $757.74 for the SPY ETF implies an upside potential of 10.58%.
Currently, SPY’s five holdings with the highest upside potential are Moderna (MRNA), GoDaddy (GDDY), News Corporation (NWSA), Charter Communications (CHTR), and MGM Resorts (MGM).
Meanwhile, its five holdings with the greatest downside potential are Paramount Skydance (PSKY), Palantir (PLTR), Tesla (TSLA), Super Micro Computer (SMCI) and Garmin (GRMN).
Revealingly, SPY’s ETF Smart Score is eight, implying that this ETF is likely to outperform the broader market.
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