ETF Spotlight: SPY Falls on Inflation News

SPY's selloff has followed an extended run into positive territory.

LucyBrewster310x310
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Finance Reporter
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Reviewed by: etf.com Staff
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Edited by: James Rubin

The SPDR S&P 500 ETF Trust (SPY) has fallen more than 2% this week on a broader market selloff, veering from the stellar bull run for the fund, which tracks the S&P 500.

The ETF, which follows a market cap weighted index of large and mid-cap stocks, surged at the end of last year and through the first quarter of this year on the gains of high-flying tech stocks, including AI-focused chip maker Nvidia. 

Overall, the S&P 500 gained 10% over the first quarter of 2024 when the index soared past 5,000 to set the first of several all-time highs. The SPY ETF is still up 6.5% year to date, but in the past week, is down 2% on news that inflation has been stickier than expected.

CPI Report Triggers Selloff

The March consumer price index (CPI), released last week, rose 3.5% year over year, indicating that inflation is still cooling at a slower rate than Federal Reserve bankers had hoped.

“After a relentless, double-digit rally in the S&P 500, investors turned slightly more bearish this week due to a surge in bond yields,” etf.com Sumit Roy said. “Three straight, higher-than-expected inflation prints were the catalyst for the downturn, and now we’ll see whether this sell off is a garden-variety pullback or turns into something bigger in the coming weeks,” he added.

Investors have drained $13.6 billion in outflows from SPY since the beginning of April, according to etf.com data. Overall, outflows year to date from SPY total $22.8 billion. 

Contact Lucy Brewster at [email protected].

Lucy Brewster is a finance reporter at etf.com covering asset managers, emerging technologies, and regulation. She hosts etf.com webinars and appears on Exchange Traded Fridays, etf.com’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.