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Transcript

Oil Spikes and Tech Retreats: Navigating the New Economic Reality · The SPY Trader

• 0:00
  Good morning, market watchers!
• 0:01
  I am Sunny Sideup, and you are listening to Spy Trader.
• 0:05
  It is currently 6 am on Thursday, April 2nd, 2026, in the Pacific time zone.
• 0:10
  I hope you have your coffee ready because the markets are waking up with a lot of movement this morning.
• 0:18
  We are seeing some significant volatility out there as we kick off the second quarter.
• 0:23
  The big story today is a sharp move into safety following a major national address regarding the ongoing conflict in Iran.
• 0:31
  As we speak, futures for the S&P 500, or the SPY, are down about 1.1 percent, while the techheavy Nasdaq100, the QQQ, has fallen 1.4 percent in early trading.
• 0:41
  It is a bit of a bumpy start for the day.
• 0:45
  Looking at the highlights, the standout story of 2026 so far has been the Energy sector.
• 0:51
  The Energy Select Sector SPDR Fund, known as the XLE, surged nearly 38 percent in the first quarter.
• 0:58
  This is largely due to the tensions in the Middle East which have disrupted the Strait of Hormuz and pushed Brent crude prices toward 110 dollars a barrel.
• 1:08
  Companies like ExxonMobil and Occidental Petroleum have been the big beneficiaries here, both rising over 25 percent this year.
• 1:15
  On the flip side, we are seeing a retreat in Technology.
• 1:19
  Former leaders like Microsoft and NVIDIA have stumbled as investors move out of expensive AI growth stocks and into more traditional value plays.
• 1:27
  Microsoft ended the first quarter down over 23 percent, and NVIDIA fell about 6.5 percent.
• 1:32
  It seems investors are worried that the moneymaking potential of AI is taking a bit longer to show up than they originally hoped.
• 1:41
  In terms of the bigger economic picture, we are dealing with some stagflation concerns.
• 1:46
  The Federal Reserve kept interest rates steady between 3.5 and 3.75 percent in March, but inflation looks like it might be picking up again.
• 1:55
  New data suggests the Consumer Price Index could jump to 3.71 percent this month, largely because of those high oil prices.
• 2:02
  This has led many to believe that the rate cuts we were all hoping for might be off the table for a while.
• 2:11
  We also saw some employment news yesterday.
• 2:13
  The ADP report showed a modest gain of 62,000 privatesector jobs in March.
• 2:18
  While healthcare and construction are still hiring, sectors like transportation are losing jobs as fuel costs start to bite into their margins.
• 2:26
  There is some interesting corporate news too.
• 2:28
  SpaceX has reportedly filed for an IPO, which has sparked a speculative rally in spacerelated stocks and the Procure Space ETF, ticker UFO.
• 2:37
  Also, IBM and Arm Holdings announced a new partnership for AI hardware, although ARM's stock fell 3.1 percent today in sympathy with the broader tech selloff.
• 2:46
  So, what should we be doing with our portfolios?
• 2:50
  The market is transitioning from a focus on AI and growth to a focus on commodities and defense.
• 2:56
  First, I recommend looking at energy.
• 2:58
  You might consider the Energy Select Sector SPDR Fund or the United States Oil Fund.
• 3:04
  As long as those Middle East tensions remain high, oil prices will likely stay elevated.
• 3:09
  ExxonMobil is a specific stock example here because it offers a healthy dividend which acts as an inflation hedge.
• 3:16
  Second, it is time to get a bit more defensive.
• 3:20
  Look at the Vanguard Consumer Staples ETF, ticker VLP, or a powerhouse like Walmart.
• 3:25
  Since consumers are cutting back on extras but still need the basics, Walmart is in a great position to maintain its margins even when things get tough.
• 3:35
  Third, think about your fixed income strategy.
• 3:37
  With inflation fears pushing bond yields up toward 4.4 percent, longterm bonds are facing some price pressure.
• 3:43
  Instead, you might look at something like the iShares 03 Month Treasury Bond ETF, ticker SGOV.
• 3:49
  This allows you to capture a yield near 3.75 percent with almost zero duration risk while you wait for a better time to jump back into stocks.
• 3:59
  Finally, if you still want some tech exposure, look for infrastructure plays.
• 4:03
  A company like Lumentum Holdings, ticker LITE, is a good example.
• 4:07
  They are building the hardware for AI data centers and saw huge gains recently after a 2 billion dollar investment from NVIDIA, showing that infrastructure can still grow even when the big tech names are down.
• 4:20
  In summary, things are bearish in the short term due to geopolitical events, but there are still opportunities in energy and value.
• 4:28
  Avoid chasing growth at any price for now and focus on the real economy.
• 4:33
  Thanks for joining me this morning!
• 4:36
  I will be back in a few hours with another update.
• 4:40
  Stay savvy and stay safe!