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The Dovish Pivot Playbook · The SPY Trader

• 0:00
  Good morning , traders , and welcome back to Spy Trader .
• 0:03
  I'm your host , Skip Spykowski , ready to dive into the market action that's shaping up to be a very interesting week .
• 0:10
  It's 6 am on Monday , September 29th , 2025 , Pacific time , and we have a mixed bag of macro signals that are driving significant rotations .
• 0:21
  The US stock market is showing strong resilience , extending last week's rebound .
• 0:28
  The S&P 500 is up 0.59% and the Dow Jones Industrial Average is leading slightly higher , up 0.65% , as we trade near alltime highs .
• 0:41
  The big news driving the momentum is the recent FOMC action .
• 0:46
  The Federal Reserve reduced its target range for the federal funds rate by 25 basis points , setting it now at 4.00% to 4.25% .
• 0:57
  This dovish pivot is a big deal , signaling that the Fed is now prioritizing the softening labor market , where the unemployment rate has climbed to 4.3% .
• 1:08
  However , we can’t forget the inflation monster .
• 1:11
  Core PCE is still running hot at 2.9% yearoveryear , well above the 2% target .
• 1:19
  Compounding this , new tariffs on imports like heavy trucks and pharmaceuticals are expected to keep inflation sticky , possibly above 3% through mid2026 .
• 1:30
  This creates a market duality : lower rates are good for growth , but persistent inflation demands careful hedging .
• 1:37
  We are still seeing the AI investment boom power the longterm leaders .
• 1:42
  Information Technology and Communication Services remain the undisputed yeartodate leaders , both up over 20% .
• 1:50
  Giants like NVDA , up 0.2814% on the day , and MSFT , up 0.8737% , continue to demonstrate the momentum in the Magnificent Seven space .
• 2:04
  However , the immediate winner from the Fed’s rate cut was Utilities .
• 2:08
  As the most ratesensitive sector , Utilities were the top daily performer , up 1.59% , as their dividend yields suddenly become much more attractive compared to bonds .
• 2:21
  We also saw some huge singlestock moves .
• 2:24
  Shares of Electronic Arts , or EA , surged nearly 15% on news of a potential 50 billion leveraged buyout , putting a floor under valuations .
• 2:35
  Meanwhile , Boeing , BA , gained almost 4% after the FAA eased safety oversight , which is expected to help accelerate aircraft production .
• 2:45
  On the trade front , tariffs are creating distinct winners and losers .
• 2:50
  Domestic manufacturer Paccar , PCAR , jumped 5.16% because they benefit directly from tariffs placed on competing heavy trucks .
• 3:00
  So , where do we place our money now ?
• 3:02
  Given the dovish Fed , the slowing economy , and persistent inflation , we need a balanced approach .
• 3:09
  First , maintain your core Structural Growth position .
• 3:13
  The AI trend is too strong to ignore , so keep your foundational holdings in broad tech instruments like the Invesco QQQ Trust , or QQQ , or the Vanguard S&P 500 ETF , VOO , which are heavily weighted towards those big tech names .
• 3:31
  Second , make the Dovish Pivot Play .
• 3:34
  With rates falling , we are rotating into ratesensitive defensives .
• 3:39
  Add to the Utilities Select Sector SPDR Fund , UTIL , which just showed massive daily strength , and the Vanguard Real Estate ETF , VNQ .
• 3:50
  They offer appealing yields in this new lowerrate environment .
• 3:54
  Finally , keep an inflation and policy uncertainty hedge .
• 3:58
  Since inflation is persistent , maintain a position in SPDR Gold Shares , GLD , as a counterbalance to the stock market's reliance on policy stability .
• 4:09
  To wrap it up , the playbook is simple : keep your structural growth leaders but start rotating new capital into ratesensitive defensive sectors like Utilities and Real Estate to capture the immediate benefits of the Fed’s new employment focus .
• 4:24
  That's all the time we have for this edition of Spy Trader .
• 4:28
  I'm Skip Spykowski , reminding you to trade safe , and we'll catch you on the next bell .