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Record Rally: Small Caps Lead the Charge · The SPY Trader

• 0:00
  Good morning , traders , and welcome back to Spy Trader .
• 0:03
  I'm your host , Barry Bullish , waking up early so you don't have to .
• 0:07
  It's 5 am on Saturday , January 10th , 2026 , Pacific Time , and we need to talk about the massive week that just wrapped up .
• 0:15
  It was an absolute powerhouse period , culminating in the S&P 500 and the Dow Jones Industrial Average both closing at brand new record highs on Friday .
• 0:26
  The rally is back , and it's broader than ever .
• 0:30
  Let's dive right into the scorecard .
• 0:32
  The S&P 500 gained 1.6% for the week , and the Dow soared 2.3% .
• 0:39
  But the real story is the smaller companies .
• 0:42
  The Russell 2000 Index , tracked by proxies like IWM , absolutely crushed it , posting a stellar 5.1% gain .
• 0:51
  This is the signal of a healthy market , folks .
• 0:54
  The main macro driver was the December jobs report .
• 0:59
  Nonfarm Payrolls came in softer than expected at 50,000 , below the 70,000 forecast , but the unemployment rate still dipped unexpectedly to 4.4% .
• 1:10
  This gives us a mixed but positive picture : the labor market is cooling enough to potentially ease inflation , but the economy remains resilient , which led to a delay in aggressive Fed ratecut expectations .
• 1:24
  Now for the insights .
• 1:25
  The biggest development is the broadening of this rally .
• 1:29
  We saw strong rotation into cyclicals and ratesensitive stocks .
• 1:33
  Homebuilders , like Lennar and D.R.
• 1:35
  Horton , soared on news of a potential presidential plan to lower mortgage rates , highlighting how quickly policy news can impact sector prices .
• 1:45
  Financials , tracked by the XLF ETF , were also top performers , benefiting from the rotation trade .
• 1:53
  In corporate news , Tech was discerning .
• 1:56
  Intel ( INTC ) shares popped nearly 10% on Friday following positive commentary , confirming its relevance in the chip space .
• 2:06
  Meanwhile , General Motors ( GM ) showed pain , dropping 2.7% after announcing a substantial 6 billion charge related to its Electric Vehicle restructuring .
• 2:20
  We also saw Meta Platforms ( META ) highlight the intense energy demands of AI by striking landmark nuclear power agreements with partners like Vistra and Oklo to fuel its data centers .
• 2:32
  So , how do we position ourselves for this ideal environment of resilient growth and broadening participation ?
• 2:40
  First , embrace the breadth .
• 2:43
  Since the Russell 2000 outperformed significantly , consider broad market exposure through the Vanguard Total Stock Market ETF ( VTI ) to capture that entire market movement .
• 2:55
  Alternatively , the Financial Select Sector SPDR Fund ( XLF ) is a strong choice as Financials benefit from stable growth .
• 3:04
  Second , stay focused on AI infrastructure , but be selective .
• 3:08
  The Intel jump and Meta's strategic power deals confirm this infrastructure buildout is crucial .
• 3:15
  Hold core AIenabling companies like Intel ( INTC ) or maintain exposure to the highgrowth Nasdaq via the Invesco QQQ Trust ( QQQ).Third , remember stability .
• 3:27
  With the 10year Treasury yield stable around 4.17% , bonds offer attractive income and portfolio ballast .
• 3:35
  For stability , use core holdings like the iShares Core U.S.
• 3:39
  Aggregate Bond ETF ( AGG ) .
• 3:42
  That’s it for this weekend update .
• 3:44
  The market finished the week on a historical high .
• 3:47
  Have a great , profitable weekend , and I’ll catch you next time on Spy Trader .