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AI Phase 2 and the Path to Dow 50,000 · The SPY Trader

• 0:00
  Hello everyone , and welcome to another edition of the Spy Trader podcast .
• 0:05
  I am your host , Barnaby BullMarket , and it is a fantastic day to be talking about the markets .
• 0:10
  The clock currently says it is 2:30 pm on Wednesday , May 6th , 2026 , here in the sunny Pacific time zone .
• 0:19
  We have seen some incredible action today , so grab your coffee and let's dive into why the screens are glowing green .
• 0:26
  We are witnessing a historic breakout right now .
• 0:30
  The broad market is hitting fresh alltime highs , following a blockbuster April that was the best monthly performance for the S&P 500 since all the way back in 2020 .
• 0:40
  Today , the S&P 500 , which we track through the SPY ETF , rose nearly one and a half percent to a record 7,365.12 .
• 0:51
  The Nasdaq100 , ticker QQQ , surged over two percent , leading the charge as tech optimism gets a second wind .
• 1:01
  Even the Dow Jones , or the DIA , gained over one percent , closing just a whisper away from that huge 50,000 mark at 49,910.59 .
• 1:12
  It is not just the big names , either .
• 1:15
  The Russell 2000 small caps , tracked by the IWM , rose about one and a half percent , which tells us this rally is finally spreading out to the rest of the neighborhood .
• 1:27
  The big story today is a powerful convergence of cooling geopolitical tensions and a second wave of the AI boom .
• 1:34
  According to reports from Axios , the White House is getting close to a peace agreement with Iran .
• 1:40
  This news sent Brent Crude tumbling over seven percent to below 95 dollars a barrel .
• 1:46
  This acts like a massive tax cut for everyone who drives or ships goods .
• 1:51
  We also have the Warsh Factor in play .
• 1:55
  Traders are betting that Kevin Warsh might replace Jerome Powell at the Fed , bringing a more rulebased and potentially dovish approach .
• 2:03
  Combine that with a solid Q1 GDP growth rate of two percent , and the soft landing narrative is officially the star of the show .
• 2:11
  Looking at the sectors , Technology was the clear leader today , with the XLK up over two percent .
• 2:18
  We are seeing a shift toward enterpriselevel implementation and infrastructure .
• 2:24
  Interestingly , Materials and Industrials , the XLB and XLI , also saw gains as physical manufacturing meets hightech software .
• 2:33
  The only sector left out in the cold was Energy , the XLE , because of those crashing oil prices .
• 2:40
  Now , let us talk about some individual movers because there were some absolute superstars today .
• 2:46
  AMD exploded eighteen percent higher after a blowout earnings report .
• 2:52
  Their data center sales grew by fiftyseven percent , proving that the hunger for AI chips is not just an Nvidia story .
• 3:00
  Speaking of Nvidia , ticker NVDA , they gained about six percent today .
• 3:05
  They are partnering with Corning , ticker GLW , to build three new optical manufacturing facilities .
• 3:12
  This is what we call the physicalization of AI , where we need massive fiberoptic networks to keep those data centers running .
• 3:21
  Disney also had a magical day , jumping eight percent under new CEO Josh D’Amaro .
• 3:26
  His focus on Agentic Commerce and hightech park integration beat expectations on both the top and bottom lines .
• 3:33
  Even Uber rose six percent on strong guidance , showing that we are still out and about , traveling and ordering in .
• 3:41
  So , what should you do with this information ?
• 3:44
  For growthoriented investors , the focus is on AI Phase Two .
• 3:49
  We are past the phase of buying anything with AI in the name ; now it is about buying companies that produce actual cash .
• 3:57
  AMD and Nvidia remain core plays , but for a diversified approach , consider the Technology Select Sector SPDR Fund , ticker XLK .
• 4:07
  It gives you concentrated exposure to these winners without the risk of putting all your eggs in one basket .
• 4:14
  For those of you with a more balanced portfolio , you should ride this broadening rally .
• 4:19
  Since small caps and industrials are finally joining the party , a purely techheavy portfolio might get bumpy .
• 4:26
  Consider a core holding in the Vanguard Total Stock Market ETF , ticker VTI .
• 4:32
  This captures those smallcap gains in the IWM that the S&P 500 funds might miss .
• 4:39
  Finally , for income and stability , keep an eye on Materials using the XLB as a hedge for a manufacturing resurgence .
• 4:48
  Health care has lagged lately , so the Health Care Select Sector SPDR Fund , ticker XLV , looks attractive for a valuation catchup .
• 4:57
  Stocks like Eli Lilly , LLY , and Pfizer , PFE , offer defensive growth at much better prices than the hot tech names .
• 5:04
  A quick word of caution before I let you go : the VIX is at 17.3 .
• 5:10
  That means even though we are at record highs , people are still buying protection .
• 5:15
  The biggest risk is that Iran peace deal .
• 5:18
  If those negotiations break down , oil could spike and tech valuations could get squeezed quickly .
• 5:25
  That is all for this afternoon .
• 5:27
  I am Barnaby BullMarket , and this has been Spy Trader .
• 5:31
  Stay smart and happy trading .