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Navigating the June Swoon: Tech Tumbles and Rate Hike Fears · The SPY Trader

• 0:00
  Hello everyone and welcome back to the Spy Trader podcast !
• 0:04
  I am your host , Penny Wise , and it is 2:30 pm on Friday , June 5th , 2026 , here on the West Coast .
• 0:12
  I hope you are all staying cool because things are definitely heating up in the markets , and not necessarily in the way we usually like to see .
• 0:21
  We are officially in the middle of what analysts are calling the June Swoon , and it has been a bit of a rough ride today .
• 0:28
  We are seeing a massive techled selloff that has snapped our incredible nineweek winning streak .
• 0:33
  The S&P 500 , which many of you track through the SPY or IVV ETFs , is down two point six percent today , sitting at about 7,383 .
• 0:45
  This is actually the worst single day we have seen for the index since October of 2024 .
• 0:50
  The Nasdaq , or the QQQ , took an even bigger hit , plunging four point two percent .
• 0:57
  Even the blue chips over at the Dow weren't safe , falling about 695 points .
• 1:03
  So , what is behind this sudden change in weather ?
• 1:06
  It really comes down to a double whammy of a hot jobs report and a massive amount of new stock hitting the market soon .
• 1:13
  The May Jobs Report showed that the U.S.
• 1:15
  added 172,000 jobs , which is nearly double what everyone expected .
• 1:21
  While more jobs usually sounds great , for the Fed , it means the economy might be running too hot .
• 1:28
  Now , instead of looking forward to rate cuts , traders are actually pricing in a potential rate hike as early as July .
• 1:35
  This has caused a surge in bond yields , which is why we are seeing the iShares 20 plus Year Treasury Bond ETF , also known as TLT , dropping sharply in price today .
• 1:47
  In the tech world , the PHLX Semiconductor Index plummeted eight and a half percent .
• 1:54
  Broadcom , or AVGO , really set the tone after a weak report showed their custom AI chip demand didn't quite hit those skyhigh expectations .
• 2:03
  Even the mighty Nvidia fell six percent today , despite launching their new RTX Spark chip for laptops .
• 2:09
  There is also a liquidity drain happening because of the wall of paper coming our way .
• 2:14
  SpaceX is looking at a massive one point seven five trillion dollar IPO next week , and Alphabet is preparing an eighty billion dollar secondary offering That is a lot of cash being pulled out of existing stocks .
• 2:29
  On the brighter side , Energy is staying high due to the conflict near the Strait of Hormuz , and Healthcare is acting as a safe harbor .
• 2:37
  Eli Lilly remains a top pick because , let's face it , the demand for weightloss drugs isn't going anywhere regardless of what interest rates do .
• 2:46
  So , what should we do with our portfolios ?
• 2:49
  First , it might be time to rotate into defensive value .
• 2:54
  I recommend looking at the Health Care Select Sector SPDR Fund , or XLV .
• 2:59
  Specifically , a stock like Eli Lilly is a great example of a company that can withstand higher interest rates because their product demand is so consistent .
• 3:09
  Second , it is probably a good idea to reduce exposure to longduration bonds .
• 3:14
  I’d suggest avoiding or selling the TLT ETF for now .
• 3:18
  With the jobs data suggesting inflation is sticky , those bond prices could continue to erode .
• 3:25
  Third , if you are looking to buy the dip in tech , please be patient .
• 3:30
  I suggest holding your QQQ or XLK positions and waiting for a SpaceX bottom .
• 3:36
  Let that massive IPO clear the market first before you jump back into semiconductors like Nvidia or Broadcom .
• 3:43
  Finally , consider diversifying into emerging markets .
• 3:47
  The Vanguard FTSE Emerging Markets ETF , or VWO , is a solid choice here .
• 3:54
  While the U.S.
• 3:55
  is worried about hiking rates , other parts of the world are starting to ease up , which can provide a nice hedge against our domestic June Swoon .
• 4:04
  That is all for this update !
• 4:06
  Stay disciplined , keep your eyes on the long term , and I will check back in with you in a few hours .
• 4:12
  This is Penny Wise for Spy Trader , signing off .