SPDR S&P 500 ETF Trust

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.