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The Great Rotation: Navigating Rate Hikes and Relief Rallies · The SPY Trader

• 0:00
  Hello everyone and welcome back to another episode of Spy Trader !
• 0:04
  I am your host , Sunny Share , and I am so glad you could join me this afternoon .
• 0:10
  It is currently 2:30 pm on Thursday , September 17th , 2026 , out here on the Pacific Coast .
• 0:18
  We have had a busy week in the markets , and if you were feeling a bit nervous yesterday , today’s action should help you breathe a little easier .
• 0:27
  After a bit of a bumpy ride following the Federal Reserve’s interest rate decision , we are seeing a massive relief rally today .
• 0:35
  The S&P 500 has jumped up 1.1 percent and the Nasdaq Composite climbed a healthy 1.7 percent .
• 0:44
  This basically wiped out all of yesterday's losses , which is exactly the kind of comeback we love to see !
• 0:50
  The big news everyone is talking about is the Federal Reserve .
• 0:55
  Under Chair Kevin Warsh , the Fed unanimously raised interest rates by 25 basis points yesterday , bringing us to a target range of 3.75 to 4.00 percent .
• 1:06
  This is actually the first time we have seen a rate hike in three years .
• 1:10
  Usually , a rate hike scares investors , but the market is looking at the silver lining .
• 1:16
  Headline inflation for August was steady at 3.4 percent , but the Core CPI , which ignores food and energy , cooled down to 2.4 percent .
• 1:27
  That is a multiyear low !
• 1:28
  On top of that , the labor market added 162,000 jobs in August and unemployment is staying steady at 4.1 percent .
• 1:37
  Investors are feeling like we might just land this plane softly .
• 1:41
  We are also seeing some relief in the energy sector as WTI Crude Oil fell below 100 dollars per barrel .
• 1:48
  Now , let us dive into what is really happening under the hood .
• 1:52
  We are in the middle of what analysts are calling the Great Rotation .
• 1:57
  For a long time , it was all about the AI hype , but now we are seeing a shift toward companies that build physical things .
• 2:04
  The Industrials sector is leading the way , getting a huge boost from the One Big Beautiful Bill Act , or OBBBA , which is helping fund the massive electricity needs for new AI data centers .
• 2:17
  Financials are also having a great day because when interest rates are higher , banks can actually make more money on their lending .
• 2:25
  Over in the tech world , things are stabilizing .
• 2:28
  We are moving away from asking who builds the chips and starting to ask who actually uses them well .
• 2:34
  For example , Microsoft recently confirmed that Nvidia CEO Jensen Huang will be headlining an event on October 7th to show off the new RTX Spark platform for AIcapable PCs .
• 2:46
  Even Apple and Nvidia seem to be making peace , with reports that Apple might use Nvidia’s NVLink Fusion to power future M8 Ultra AI servers down the road .
• 2:58
  So , what should you be doing with your portfolio right now ?
• 3:01
  Here is the strategy I am looking at .
• 3:03
  For your core holdings , I recommend staying diversified with a slight tilt toward value .
• 3:09
  You can do this by keeping your main exposure in the Vanguard Total Stock Market ETF , ticker VTI , but consider adding a little extra to the Financial Select Sector SPDR , which is XLF .
• 3:22
  This lets you benefit from those higher interest rates the banks are enjoying .
• 3:27
  For growth , instead of just buying software companies that are getting very expensive , look at the hardware and the power .
• 3:35
  I like Western Digital , ticker WDC , because they provide the enterprise storage that data centers desperately need .
• 3:43
  You can also look at the Industrial Select Sector SPDR , ticker XLI , to capture that physical infrastructure growth .
• 3:51
  Finally , don't forget to protect yourself .
• 3:55
  Gold hit a record high of 4,399 dollars and 70 cents today !
• 4:00
  Putting about 5 to 10 percent of your money into SPDR Gold Shares , ticker GLD , is a smart way to hedge against inflation .
• 4:09
  If you think the Fed might stop raising rates sooner than they say , you could also look at the iShares 20 plus Year Treasury Bond ETF , ticker TLT .
• 4:19
  Overall , the market is feeling cautiously bullish .
• 4:23
  We have survived the initial shock of the rate hike , and the economy looks strong enough to handle it .
• 4:29
  Thanks for listening to Spy Trader .
• 4:31
  I am Sunny Share , and I will be back in a few hours with another update .
• 4:36
  Happy trading !