SPY ETF Reaches Record High Amid Nvidia-Fueled AI Rally—Key Chart Pattern to Watch
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Key Takeaways
The SPDR S&P 500 ETF Trust closed at a record high Thursday, buoyed by a rally in AI-related mega-cap stocks after Nvidia’s blowout earning’s report.
Magnificent Seven stocks carry a 27.53% cumulative weighting in SPY’s portfolio, while Nvidia alone ranks as the ETF’s third-largest holding at 4.23%.
A break above or below a rising wedge pattern on the SPY chart could offer clues about the fund’s future price direction.
SPDR S&P 500 ETF Trust
Source: TradingView.com
The SPDR S&P 500 ETF (
SPY
)—an
exchange-traded fund (ETF)
that tracks the S&P 500—mirrored its underlying index Thursday, climbing to an all-time high as investors piled into mega-cap technology stocks after
artificial intelligence (AI)
darling Nvidia’s (
NVDA
)
blowout quarterly report
.
Other AI-related stocks in the S&P 500 including Microsoft (
MSFT
), Broadcom (
AVGO
), and Advanced Micro Devices (
AMD
) joined the rally, gaining between 2.4% and 10.7%.
Synopsys
(
SNPS
), a company that makes software to test and develop chips, jumped 6.9%.
While leading technology names drove Thursday’s gains, the index’s rally saw broad-based participation, with every sector in the S&P 500 rising except utilities, hinting that the current bull run may transcend touted
Magnificent Seven
members—a group of influential tech bellwethers including Alphabet (
GOOGL
), Amazon (
AMZN
), Apple (
AAPL
), Meta Platforms (
META
), Microsoft, Nvidia, and Tesla (
TSLA
) that carry a 27.5% cumulative weighting in SPY’s
portfolio
. Nvidia alone ranks as the ETF’s third-largest holding at 4.2%.
Since falling below the
200-day moving average
in late October, the SPY has made a remarkable recovery, trending sharply higher within a
rising wedge
pattern. More recently, trading volumes have fallen away slightly as the fund reached record closes, indicating a lack of conviction by the bulls.
Looking ahead, a convincing
breakout
above the wedge pattern’s top trendline could set the stage for further gains, while a breakdown through the lower trendline could warn of a possible correction.
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As of the date this article was written, the author does not own any of the above securities.
