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Markets in Motion: Navigating the War and Inflation Regime · The SPY Trader

• 0:00
  Hello everyone and welcome back to the Spy Trader podcast !
• 0:04
  I am your host , Penny Pincher , and it is great to be with you on this Monday afternoon .
• 0:09
  It is exactly 2:30 pm here on the West Coast on May 18th , 2026 .
• 0:16
  We have got a lot of moving parts in the market today , so let us dive right into what is happening on Wall Street .
• 0:22
  It is a bit of a mixed bag out there as we navigate what many are calling a war and inflation regime .
• 0:29
  The Dow Jones Industrial Average is the star of the show today , gaining about zero point three two percent to close at fortynine thousand six hundred and eightysix .
• 0:39
  Remember , we just saw it cross that historic fiftythousand mark last week , so it is holding onto those gains quite well .
• 0:46
  However , it was not all sunshine .
• 0:49
  The S&P 500 , or the SPY , slipped just a tiny bit , down zero point zero seven percent .
• 0:57
  Meanwhile , the techheavy Nasdaq , known as the QQQ , took a bigger hit , falling about half a percent as high interest rates continue to put the squeeze on growth stocks .
• 1:07
  So , what is driving all this ?
• 1:10
  Well , the big story is still the U.S.
• 1:13
  and Iran conflict that has been going on since late February .
• 1:17
  It has disrupted about twenty percent of the global oil supply through the Strait of Hormuz .
• 1:23
  Even though Brent crude eased slightly today to one hundred and ten dollars a barrel , energy remains our topperforming sector of the year .
• 1:32
  In other news , we have a changing of the guard at the Federal Reserve .
• 1:36
  Kevin Warsh officially took over as Fed Chair just a few days ago .
• 1:41
  He is suggesting that AI productivity might help lower inflation , but the bond market is not so sure yet .
• 1:49
  The thirtyyear Treasury yield hit five point one three percent today , which is the highest we have seen since 2007 .
• 1:56
  We also saw a massive move in the utility space , with NextEra Energy announcing a sixtysix point eight billion dollar deal to buy Dominion Energy .
• 2:06
  On the downside , healthcare took a punch today .
• 2:09
  Regeneron fell nearly ten percent after some disappointing melanoma trial data , dragging the whole sector down .
• 2:17
  Now , let us talk about how to position your portfolio in this environment .
• 2:21
  First , I am looking closely at financials .
• 2:24
  With interest rates staying higher for longer , banks like JPMorgan Chase and Goldman Sachs are seeing better profit margins .
• 2:32
  I recommend being overweight in the Financial Select Sector SPDR , or XLF .
• 2:37
  Major players like JPMorgan and Bank of America are in a great spot if yields stay above four point five percent .
• 2:45
  Second , we have to talk about protection .
• 2:48
  With the ongoing conflict in the Middle East and inflation sitting at three point eight percent , you want some insurance .
• 2:55
  I suggest keeping a core position in gold through the SPDR Gold Shares , ticker symbol GLD , as a hedge against inflation .
• 3:04
  I also like the Energy Select Sector SPDR , or XLE .
• 3:08
  Despite today's small dip , the supply issues suggest energy will be a dominant play this summer .
• 3:14
  Third , it is time to be a bit cautious with tech .
• 3:19
  We have Nvidia's big earnings report coming up this Wednesday .
• 3:22
  Nvidia is now a five point four trillion dollar company , and if they do not hit their massive revenue targets , it could be a bumpy ride for the whole tech sector .
• 3:32
  I would suggest trimming some of your Tech Select Sector SPDR , or XLK , and maybe moving that money into something safer like the iShares onetothree Year Treasury Bond ETF , ticker SHY , to keep some cash ready .
• 3:46
  Finally , do not forget to look abroad .
• 3:49
  International stocks , which you can find in the Vanguard Total International Stock ETF , ticker VXUS , are actually beating the U.S.
• 3:57
  markets so far this year .
• 3:59
  They offer a bit of a discount and less tech risk than what we are seeing at home .
• 4:04
  That is all for this update .
• 4:06
  Thanks for tuning in to Spy Trader .
• 4:08
  Stay smart , stay diversified , and I will see you in a few hours .
• 4:13
  Happy trading !