The SPDR S&P 500 ETF Trust (SPY) gained 0.05% on Wednesday, fueled by optimism over artificial intelligence (AI) stocks, especially Nvidia (NVDA). Also, the ETF hit a new all-time high of $689.70 during the day. However, market sentiment was impacted by Fed Chair Powell’s comments suggesting that further rate cuts are not guaranteed.
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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 ended marginally lower. Meanwhile, the Nasdaq 100 (NDX) gained 0.41%.
What Impacted the Market Today?
Earlier today, the Federal Reserve implemented a widely anticipated 25-basis-point interest rate cut, bringing the federal funds rate target range to 3.75% to 4%. However, afternoon remarks from Fed Chair Powell raised market uncertainty, as he indicated that a December rate cut is not guaranteed and the Fed will assess incoming data.
During the day, SPY ETF’s performance was supported by investor confidence in the AI and technology sectors. This is partly fueled by Nvidia’s AI deals announced at its GTC conference, which led the company’s market cap to cross $5 trillion.
Looking ahead, the ongoing U.S. government shutdown, earnings reports from five “Magnificent Seven” companies, and an upcoming meeting between President Trump and President Xi could trigger volatility in the SPY ETF.
Fund Flows and Sentiment
SPY’s 5-day net outflows totaled $7 billion, showing that investors pulled capital from SPY over the past five trading days. Meanwhile, its three-month average trading volume is 74.15 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 $757.81 for the SPY ETF implies an upside potential of 10.24%.
Currently, SPY’s five holdings with the highest upside potential are Moderna (MRNA), GoDaddy (GDDY), News Corporation (NWSA), MGM Resorts (MGM), and Alexandria Real Estate Equities (ARE).
Meanwhile, its five holdings with the greatest downside potential are Paramount Skydance (PSKY), Tesla (TSLA), Palantir (PLTR), Intel (INTC), and Super Micro Computer (SMCI).
Revealingly, SPY’s ETF Smart Score is eight, implying that this ETF is likely to outperform the broader market.
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