First, S/PDIF is a Digital output. If you are using three audio jacks to connect the speaker system, that is Analog through the sound device's output. Also your Sound Card is not S/PDIF its Connexant according to what I find at the HP web site.
How are you testing with Media Player? I looked at mine and do not see any option to test speakers. The test for Speakers is in the Control Panel/Hardware and Sound and finally the Sound Panel, playback section. You can configure and test the speakers there.