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Navigating the Warsh Trade: Defensive Plays in a Grumpy Market · The SPY Trader

• 0:00
  Hey there , everyone !
• 0:01
  Welcome back to another update here on Spy Trader .
• 0:04
  I'm your host , Buckles McMoney , and I am so glad you could join me for our midday checkin .
• 0:10
  It is currently 2:30 pm on Tuesday , May 19th , 2026 , out here on the sunny Pacific coast .
• 0:17
  We have got a bit of a bumpy ride in the markets today , so let's settle in and talk about what's happening with your hardearned chips .
• 0:24
  The big story today is that the market is definitely in a bit of a grumpy mood .
• 0:29
  We are seeing a real pullback after that big rally we had earlier this spring .
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  The S&P 500 , which many of you track through the SPY ETF , closed down 0.87 percent at 7,338.90 .
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  That is the third day in a row we've seen it slide .
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  The techheavy Nasdaq , or the QQQ , took a bigger hit , dropping 1.43 percent , mostly because people are a little nervous about those highflying semiconductor and AI stocks .
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  Even the Dow , the DIA , was down a bit , though it held up better than the others thanks to pharmaceutical companies .
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  So why the long faces on Wall Street ?
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  Well , it's mostly about what people are calling the Warsh Trade .
• 1:14
  Everyone is getting ready for Kevin Warsh to be sworn in as the new Fed Chair this Friday .
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  He has a reputation for being a hawk , which means he likes higher interest rates to keep inflation in check .
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  Because of this , analysts at Bank of America think we might not see interest rates go down until the middle of 2027 .
• 1:34
  On top of that , oil is still expensive with Brent Crude sitting near 110 dollars , which keeps the price of everything else high .
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  It's making it tough for companies like Home Depot , who mentioned today that seven percent mortgage rates are really putting a squeeze on the housing market .
• 1:51
  In the world of tech , all eyes are on Nvidia .
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  They report earnings tomorrow , May 20th , and the market is feeling the pressure .
• 2:00
  Nvidia fell slightly today , and other chipmakers like AMD and Qualcomm dropped five to six percent .
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  But it was not all bad news !
• 2:09
  Some folks moved their money into safe havens like Healthcare .
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  Eli Lilly and Amgen both saw gains of two to three percent .
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  Even Walmart is looking like a top defensive pick because when gas is expensive , people look for those everyday bargains .
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  Now , what can you do with this information ?
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  First , consider a defensive rotation .
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  If the tech world is too wild for you , looking at the Health Care Select Sector SPDR Fund , also known as XLV , or the Vanguard Consumer Staples ETF , VLP , might be a smart move .
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  Think of solid companies like CocaCola or UnitedHealth that tend to stay steady even when the Nasdaq is volatile .
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  Second , look at bonds .
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  The iShares Core U.S.
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  Aggregate Bond ETF , or AGG , is yielding over four percent right now .
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  It is a great way to lock in some income if you think the economy might slow down later this year .
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  Third , if you're thinking about buying tech , maybe wait until after that Nvidia earnings report tomorrow .
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  If they miss their targets , the QQQ could drop even more , giving you a better buy the dip opportunity later .
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  Finally , I would suggest staying away from real estate for a bit .
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  The Vanguard Real Estate ETF , VNQ , is struggling because it is getting very expensive for building owners to refinance their loans .
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  Sometimes the best move is just to wait for a better day .
• 3:37
  That is it for this edition of Spy Trader !
• 3:40
  I am Buckles McMoney , reminding you to keep a cool head and a steady hand .
• 3:45
  I will see you in a few hours for our next update .
• 3:48
  Happy trading !