Calm on the S&P 500 Market: SPY Trading Volume at a 23-Year Low

The trading volume of SPY shares, which tracks the S&P 500 index, fell to about 18 million shares on Monday – the lowest for a regular trading session since 2003. The five-day average reached a record low. Investors are not selling off shares but are simply trading less frequently: the lower the turnover, the more even small orders can move the price significantly, increasing the risk of sharp fluctuations.

According to analysts at The Kobeissi Letter, last Friday's SPY volume was only 22.6 million shares – the lowest for a full session since November 25, 2005, and excluding holiday periods, since October 11, 2004. For comparison, on December 24, 2019, the volume fell below 20 million, but the exchange operated for a shortened day. On Monday, activity dropped even further, with the latest chart figure at 17.525 million shares.

The three previous lulls – in December 2024, February 2025, and August 2026 – ended with a pullback in the S&P 500. Currently, the market is in a consolidation phase, according to the authors: prices are fluctuating within a narrow range without a clear direction.

Simultaneously, investors are actively moving into the debt market: bond ETFs have received a record $525 billion since the beginning of the year, calculated by Nate Jeraci, president of NovaDius Wealth Management. Market participants are seeking stable coupon income, although many long-term maturity ETFs are still in the red.

Demand for precious metals is also growing: global gold ETFs attracted $30.7 billion in the third quarter – the largest quarterly inflow in history; fund reserves reached a record 4,256 tons. This indicates that some capital is seeking a hedge against turmoil.

Interest in crypto funds, on the other hand, is waning: U.S. spot bitcoin ETFs increased by only $232 million over 13 sessions after an inflow of $1.7 billion in two days in September. As early as October, Glassnode analysts linked BTC's pullback to weak trading volumes, and now a similar pattern is visible in the stock market.

Bloomberg Intelligence strategist Mike McGlone believes that bitcoin, like copper and bond yields, follows the S&P 500. According to him, the 50-week average BTC price is declining in a 2022 scenario and may warn of a stock reversal. The same risk is currently indicated by low activity in SPY.