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Hawkish Holds and Energy Shocks: Navigating the 2026 Market Reset · The SPY Trader

• 0:00
  Hello everyone and welcome back to another episode of Spy Trader !
• 0:04
  I am your host , Sunny Sideup , bringing you the latest pulse of the market .
• 0:09
  It's 2:30 pm on Thursday , August 20th , 2026 , here in the Pacific time zone , and we have quite a bit to unpack today .
• 0:19
  After the excitement of hitting alltime highs just last week , the U.S.
• 0:23
  stock market is hitting a bit of a rough patch .
• 0:26
  The S&P 500 , which we track through the SPY ETF , fell 0.9 percent today to 7,641.16 .
• 0:36
  That marks its worst singleday loss in three weeks , as investors grapple with some heavy macroeconomic news .
• 0:44
  We are currently navigating what analysts call a hawkish hold from the Federal Reserve and its new Chair , Kevin Warsh .
• 0:52
  While the Fed recently held interest rates between 3.50 and 3.75 percent , meeting minutes released yesterday suggest that officials are still open to more hikes if inflation does not settle down .
• 1:06
  This uncertainty is pushing bond yields to heights we haven't seen in two decades .
• 1:13
  Specifically , the 30year Treasury yield hit 5.31 percent this week , which caused the iShares 20 plus Year Treasury Bond ETF , or TLT , to slump to its lowest level since 2004 .
• 1:27
  Adding to the fire is a spike in energy costs .
• 1:30
  Brent crude oil is up 2.4 percent today following military conflict between the U.S.
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  and Iran , creating an energy shock that makes the Fed's goal of a soft landing much more difficult .
• 1:42
  Looking at specific sectors , the consumer discretionary space is really hurting .
• 1:48
  Walmart , ticker WMT , saw its shares plunge over 9 percent today .
• 1:53
  They reported a rare miss in sales growth , coming in at 2.6 percent compared to the 3.5 percent expected .
• 2:01
  This tells us that high fuel and food prices are finally forcing families to make tough tradeoffs , and we are seeing that drag extend to peers like Target and Costco .
• 2:12
  On the tech side , the Nasdaq fell 1 percent , but there are some bright spots in AI hardware .
• 2:18
  Micron , ticker MU , rose 4 percent on news of a huge 10 billion dollar research lab investment .
• 2:25
  Similarly , Deere and Company , ticker DE , surged between 6 and 8 percent as its AIdriven construction business offset some of the weakness in its farming segment .
• 2:37
  However , the real estate sector is struggling , with the Vanguard Real Estate ETF , or VNQ , showing bearish signals as rising yields make borrowing costs for these companies much more expensive .
• 2:51
  So , what is the game plan ?
• 2:53
  We are seeing a valuation reset as the era of easy guidance from the Fed seems to be over .
• 3:00
  For a balanced portfolio , consider using the Vanguard Total Stock Market ETF , or VTI , for your core exposure , but you might want to tilt toward Industrials and Healthcare to protect yourself from the consumer slowdown .
• 3:14
  For income and safety , I like the Health Care Select Sector SPDR , known as XLV .
• 3:20
  Healthcare typically stays strong during high inflation , and companies like Eli Lilly continue to see high demand for metabolic health treatments .
• 3:30
  Regarding bonds , you might want to avoid new entries in the TLT for now since prices could still fall ; instead , look at shorterduration options like the Vanguard Total Bond Market ETF , ticker BND , for less volatility .
• 3:45
  If you are looking for growth , Deere and Company is a great selective buy as it acts as a pickandshovel play for the global datacenter buildout .
• 3:53
  For a hedge against geopolitical tension , consider accumulating some SPDR Gold Shares , or GLD .
• 4:01
  With targets for gold hitting 5,400 dollars an ounce , it remains a strong diversifier .
• 4:07
  On the international front , I would stay underweight on emerging markets like the Vanguard FTSE Emerging Markets ETF , ticker VWO , as big tech spenders like Alibaba are seeing their profits squeezed by high AI costs .
• 4:22
  Keep your eyes peeled for the Jackson Hole speech by Kevin Warsh next week for any clues on the Fed's next move .
• 4:29
  That is all for this afternoon's update !
• 4:32
  I'm Sunny Sideup , and this has been Spy Trader .
• 4:35
  Stay safe and happy trading !