SPY Ticks as Markets Surge to End the Week

Stocks ended the session near the highs as investors digested good economic data and looked towards the holiday-shortened trading week. 

The SPDR S&P 500 ETF Trust (SPY) finish up by nearly 1%, putting it just a hair below its record closing high from July. SPY has a good shot to make new all-time highs next week with strong momentum and nothing to get in the way of the rally in the short-term. 

The market easily digested the underwhelming earnings report from AI titan Nvidia earlier this week. That stock fell almost 8% from Friday-to-Friday but its pullback had little impact on the broader stock market or even the tech sector for that matter. 

Investors have three trading sessions before the next big catalyst—the jobs report for August, which is set for release on Friday, September 6.

ETFs tracking major stock indexes gyrated between higher and lower while remaining on pace to finish August higher, after strong economic data raised the likelihood that the Federal Reserve may opt for a smaller-than-hoped for rate cut next month.

The SPDR S&P 500 ETF Trust (SPY), which tracks the broad S&P 500 index, pared gains and briefly dipped before rising 0.1% in afternoon trading. The SPDR Dow Jones Industrial Average ETF Trust (DIA), a proxy for the Dow index of 30 stocks, also moved out of the green and into red, losing 0.2.

Equity indexes remained on track to finish August higher, buoyed by what has mostly been a solid batch of economic reports lately. Consumer spending ticked up in July, setting the stage for a small cut in interest rates next month. The portion of economists expecting a 25-basis point reduction has jumped to nearly 70% from 64% a week ago, according to the CME Fed Watch tool.

"Yesterday's revised GDP (up) to 3% and today's mediocre PCE looks more like a 25 bp rate cut scenario than a 50 bp rate cut," etf.com research lead Kent Thune said.

Tech and semiconductor stocks outpaced the broader market. The Nasdaq-tracking Invesco QQQ Trust (QQQ) added 0.6% and the VanEck Semiconductor ETF (SMH) rose 1.2%.

Crypto ETFs resumed their declines as bitcoin's price fell to around $58,000. The Grayscale Bitcoin Trust (GBTC) fell 1.3% while the iShares Ethereum Trust (ETHA) lost 2.5% to mostly erase recent gains.