Will a massive sell off of the SPY ETF affect stock prices?

Massive selling of the SPY does not happen in isolation, meaning that its component stocks will be relatively unchanged if the SPY drops like a rock.

If an ETF strays from the NAV of its components, the Creation and Redemption mechanism is an arbitrage that drives prices back in line.

If the ETF drops and the NAV is trading at a premium to the ETF, the Authorized participant will buy ETF shares and sell the underlying shares.

Other market participants can arbitrage the difference as well though it's outside the Creation and Redemption process.

ETFs (Exchange Traded Funds) are "amalgams" of stocks. (That what funds are.)

Therefore, if you sell shares of an ETF, you're effectively selling the stocks which belong to the ETF.

SPY is an ETF containing all 500 stocks in the S&P 500 Index. Thus, if loads of people who own SPY suddenly decide to sell their shares, the individual stocks would also be sold. That would put downward pressure on the stocks which make up the S&P500.

AAPL is part of the S&P, and so would also fall.

What you didn't mention is that there are many other funds which mirror the S&P500. Examples are:

• VOO
• IVV
• FXAIX
• SWPPX
• VFINX
• SVSPX

Some of those funds are Really, Ginormously Huge. Since you only mentioned SPY and not any of the others, I'm dubious as to how much impact there would be.

There would be some panic selling by others ("What do all these other sellers know that I don't know? Better sell!!"), but there would also be some bargain buying by others ("The fundamentals are good, so let me scoop up more at a bargain.)