$SPY

David Rosenberg warns of potential recession due to Fed tightening and energy-price shocks, despite current market optimism. SPY, the SPDR S&P 500 ETF, is trading at $761.77, 12.6% above its GF Value™ of $676.36, indicating overvaluation. SPY has a GF Score™ of 86/100, showing strong fundamentals but mixed institutional activity.

Wells Fargo lowered its S&P 500 year-end target to 7,700 from 7,950, implying a 5-10% pullback for SPY and VOO. The Fed is expected to raise rates, which could pressure corporate profits and stock prices. SPY and VOO track the S&P 500 but differ in expense ratios.

JPMorgan anticipates the S&P 500 could swing between -2% and +1% post-Fed decision, depending on Fed Chair Warsh's guidance. A surprise hold could drop the index 1.25%-1.75%, while a 25-bp hike with minimal guidance may lift it 0.25%-0.75%. The Fed's decision and projections are due Wednesday, with Warsh's press conference at 2:30 p.m. ET. SPDR S&P 500 ETF Trust (SPY) tracks the S&P 500.

The Federal Reserve is expected to raise interest rates by 0.25% to 3.75%-4.00% on Wednesday, with a 93% probability according to traders. The focus will be on the dot plot for future hikes, inflation and growth forecasts, and Fed Chair Kevin Warsh's press conference for hints on an October hike. ETFs like SPY, QQQ, TLT, GLD, and IBIT may see volatility.

U.S. stock futures dropped due to U.S.-Iran tensions, overshadowing earnings season and economic data. Nasdaq futures fell 1.2%, S&P 500 futures declined 0.4%. SK Hynix (SKHYV) fell 15% post-debut. Oil stocks rose on geopolitical risks. Micron (MU) and Tesla (TSLA) dropped on profit-taking and competitive pressures. Microsoft (MSFT) saw defensive buying.

US equity ETFs saw three weeks of outflows, hitting four-week lows since the Iran war, per Wells Fargo. Tech sectors XLK, IGV, and XTH led outflows, while financials XLF saw inflows. S&P 500 SPY and Nasdaq 100 QQQ had significant outflows, while Russell 2000 IWM had minor inflows. CTAs are selling US equities, with potential for $105B in global equity sales in a bearish scenario.

U.S. stock futures show modest gains ahead of the August CPI report, with traders anticipating a 64% chance of an S&P 500 rise on Sept. 11. Key factors include geopolitical risks, elevated energy prices, and upcoming economic data. Earnings reports from Kroger, Rent the Runway, and Hooker Furnishings are expected. Taiwan Semiconductor reported strong sales, supporting tech sector fundamentals.

Barclays raised its year-end S&P 500 target to 7,950, citing strong earnings and AI spending. The bank increased its 2026 EPS forecast to $365. The S&P 500, tracked by SPDR S&P 500 ETF Trust (SPY), was trading around 7,625. Barclays' target is based on 30.8% earnings growth and a 21.8x multiple, with AI-driven growth from companies like Nvidia (NVDA), Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL). Risks include inflation, geopolitical uncertainty, and higher rates.

Precious metals ETFs outperformed the S&P 500 over the past year, with SLV up 64%, GLTR up 34%, GLD up 24%, and DBP up 29%. The World Bank projects price increases for 2026 but declines in 2027. Geopolitical tensions and central bank purchases may support demand.

President Trump demanded a Fed rate cut after August's jobs report showed 162,000 jobs added, far exceeding estimates. The Fed's likelihood of a rate hike in September increased to 60.2%. Economists debate the Fed's next move, with inflation data due before the FOMC meeting. Markets reacted negatively to the jobs report.