SPY, the SPDR S&P 500 ETF, tracks 500 of the largest US companies - so it moves on the sum of everything that moves them. But the forces are not equal, and they operate on different timescales. Understanding the hierarchy is more useful than any single headline.
The macro layer
Over weeks and months, SPY is driven by interest rates, Fed policy, inflation, and growth expectations. An FOMC decision or a hot CPI print can reprice the whole index in minutes. These are the tides - the biggest, slowest-moving forces.
The earnings and sector layer
SPY is cap-weighted, so a handful of mega-cap names carry outsized influence. When the largest constituents report earnings or a dominant sector rotates, SPY moves even without macro news. The index is only as strong as its heaviest components.
SPY moves on tides, waves, and ripples. Confusing which one you're trading is how accounts die.
The intraday layer
Within a session, structure takes over: VWAP, the opening range, and - critically - dealer gamma positioning, which can pin or amplify moves near big option strikes. These are the ripples that decide the day's path. A systematic read on SPY layers all three: the macro backdrop, the session structure, and the dealer flow steering the tape minute to minute.