The SPDR Portfolio S&P 500 ETF (SPLG) is experiencing downward pressure due to several factors impacting the broader market. A significant contributor is the disappointing earnings report from Alphabet, which revealed a 7% pre-market drop in its shares. The tech giant's cloud revenue fell short of expectations, and its announcement of a $75 billion capital expenditure plan for 2025 has raised concerns about overspending, especially in light of competition from cheaper AI models like DeepSeek. This has led to a broader sell-off in the tech sector, which is heavily weighted in the S&P 500. Additionally, ongoing trade tensions between the U.S. and China, exacerbated by recent tariff exchanges, are adding to market volatility and investor unease.
The S&P 500 is also feeling the impact of slowing growth among the "Magnificent Seven," a group of tech companies that have been pivotal in driving the index's gains. Their profit growth is decelerating, and rising capital expenditures are putting pressure on their valuations. This slowdown is causing investors to reassess the high premiums these companies command, further weighing on the index. Moreover, geopolitical concerns, such as potential regulatory actions against Apple in China, are contributing to the cautious sentiment in the market.
The SPLG ETF is currently priced at $70.62, reflecting a 0.24% decrease from its previous close.