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AI Peaks and Inflation Pressures · The SPY Trader

• 0:00
  Hello and welcome back to the Spy Trader podcast !
• 0:03
  I am your host , Barnaby Bull , and I am so glad you could join me for our midafternoon update .
• 0:09
  It is currently 2:30 pm on Wednesday , May 13th , 2026 , in the Pacific time zone .
• 0:17
  We have quite a bit to unpack today , so let's dive straight into the numbers .
• 0:21
  Today’s market is really a tale of two cities .
• 0:25
  We are seeing a massive tugofwar between the incredible growth coming out of artificial intelligence and the stubborn , wardriven inflation that just won't quit .
• 0:34
  On one hand , we hit some big milestones today .
• 0:38
  The S&P 500 , which many of you track through funds like SPY , IVV , or VOO , rose over half a percent to close at a record 7,444.25 .
• 0:52
  The Nasdaq , or the QQQ , did even better , climbing one point two percent to reach an alltime high of over 26,400 .
• 1:01
  But if you look at the Dow Jones , it actually slipped about 67 points .
• 1:05
  This tells us the market breadth is pretty narrow .
• 1:08
  In plain English , that means only a few big tech companies are doing the heavy lifting while the rest of the neighborhood is feeling a bit of a chill .
• 1:17
  The big news of the day is really centered on the economy's engine room .
• 1:22
  We got the Producer Price Index report this morning , and it was a bit of a shocker .
• 1:27
  It showed that prices at the wholesale level rose one point four percent in April , which was way higher than the point four percent experts expected .
• 1:35
  When you combine that with yesterday’s high consumer price report , it is clear that inflation is still very much alive .
• 1:42
  To add to the drama , the Senate confirmed Kevin Warsh as our new Federal Reserve Chair today .
• 1:49
  He is stepping in at a very intense time .
• 1:52
  We even heard from Boston Fed President Susan Collins today , who suggested that we might actually need to hike interest rates again from their current level of three and a half to three and threequarters percent .
• 2:05
  That is a big shift from the rate cuts everyone was hoping for earlier this year .
• 2:10
  Now , let's look at what is actually moving .
• 2:13
  Tech and semiconductors are the stars of the show .
• 2:17
  Nvidia , ticker symbol NVDA , hit a record high today as its CEO Jensen Huang attended a highstakes summit between the U.S.
• 2:25
  and China .
• 2:26
  Everyone is waiting for their earnings next Wednesday , expecting nearly 80 billion dollars in revenue .
• 2:32
  We also saw Micron , ticker symbol MU , gain nearly five percent , and ON Semiconductor surge over 11 percent .
• 2:40
  Even Tower Semiconductor , symbol TSEM , had a great day thanks to their work in AI infrastructure .
• 2:48
  However , it wasn't all sunshine .
• 2:51
  The 10year Treasury yield jumped to four point four eight percent .
• 2:54
  When yields go up like that , it hurts sectors like Real Estate , which we see in the VNQ fund , and Utilities .
• 3:02
  People tend to pull away from those dividendpaying stocks when they can get a safe return from a government bond .
• 3:08
  We are also seeing oil prices climb above 102 dollars a barrel because of the ongoing conflict in the Strait of Hormuz , which is keeping everyone on edge .
• 3:18
  So , what should we be doing with our portfolios ?
• 3:21
  I have got three main strategies for you to consider .
• 3:24
  First , if you want to stay with the growth , look at the AI infrastructure play .
• 3:29
  Even with high prices , these companies have the earnings to back it up .
• 3:34
  I like the Invesco QQQ Trust for broad exposure , or Micron Technology , symbol MU , specifically because the move toward more advanced AI requires the kind of highend memory they provide .
• 3:47
  Second , we need to hedge against that inflation and geopolitical risk .
• 3:52
  Since oil is staying high , the Energy Select Sector SPDR Fund , or XLE , is acting like a great insurance policy right now .
• 4:01
  I would also suggest looking at gold through SPDR Gold Shares , symbol GLD .
• 4:06
  It is a classic safe haven when tensions in the Middle East and relations with China are uncertain .
• 4:12
  Third , for those looking for something a bit more defensive , check out quality value in healthcare .
• 4:19
  The Health Care Select Sector SPDR Fund , XLV , is showing resilience .
• 4:24
  A great example is UnitedHealth Group , ticker symbol UNH .
• 4:28
  It jumped three percent today because it is the kind of cashrich , stable business that can handle these high interest rates .
• 4:35
  Looking ahead to next week , keep an eye on Walmart and Lowe’s .
• 4:39
  They will tell us how regular families are coping with fourdollar and fiftycent gas and high borrowing costs .
• 4:45
  For now , my advice is to stay cautious .
• 4:49
  Even though the S&P 500 is at a record , twothirds of its stocks actually went down today .
• 4:56
  Stick with highquality names and maybe some commodities until we see what the new Fed Chair decides to do in June .
• 5:04
  Thanks for listening to Spy Trader .
• 5:06
  I am Barnaby Bull , and I will see you in a few hours !