Latest / The SPY Trader / Navigating the September Storm: Oil Spikes and Rate Hikes

Transcript

Navigating the September Storm: Oil Spikes and Rate Hikes · The SPY Trader

• 0:00
  Hello everyone and welcome back to the Spy Trader podcast .
• 0:04
  I am your host , Sunny Gains , and it is great to have you with us on this Tuesday afternoon .
• 0:10
  It is currently 2:30 pm on Tuesday , September 1st , 2026 , here on the Pacific coast .
• 0:18
  We are kicking off the month of September with a bit of a bumpy ride , so let’s dive right into what’s happening in the markets today .
• 0:26
  Historically , September is the weakest month for stocks , and 2026 is certainly living up to that reputation so far .
• 0:34
  We are seeing a significant riskoff shift today across the board .
• 0:37
  The S&P 500 , which we follow through the SPY ETF , fell point seven percent today to around 7,631 .
• 0:46
  The techheavy Nasdaq , or QQQ , took a harder hit , dropping a full percentage point to about 26,099 .
• 0:56
  The Dow Jones Industrial Average declined by 419 points , and our friends in small caps over at the Russell 2000 are struggling the most , underperforming with a one point two percent drop .
• 1:09
  The primary drivers for this jitteriness are energy costs and monetary policy .
• 1:15
  Military strikes in the Persian Gulf have essentially shut down the Strait of Hormuz .
• 1:21
  Since about twenty percent of the world’s oil flows through that passage , Brent Crude prices surged over four percent today , closing above ninetytwo dollars a barrel .
• 1:31
  This has reignited fears of sticky inflation just as we are getting to know our new Fed Chair , Kevin Warsh .
• 1:39
  He delivered a very hawkish debut at the Jackson Hole symposium last weekend , emphasizing that price stability is not selfexecuting .
• 1:48
  Because of this , the market is now pricing in a sixty percent chance of a rate hike at the September 16th meeting .
• 1:55
  This uncertainty has pushed the 10year Treasury yield up to four point seven nine percent , its highest level in months .
• 2:02
  Looking at individual sectors , it is a tale of two markets .
• 2:06
  Technology and growth stocks are feeling the heat from those rising yields , as higher rates devalue future earnings .
• 2:14
  Giants like Nvidia and Amazon were major drags on the market today .
• 2:19
  We also saw cybersecurity stocks like Palo Alto Networks and CrowdStrike take a hit with midsingledigit declines .
• 2:26
  However , it was not all bad news .
• 2:29
  Energy was a bright spot today , with companies like Chevron and HF Sinclair gaining ground because of that oil spike .
• 2:36
  Health care also stood out as a defensive winner through the XLV ETF .
• 2:41
  Moderna was the standout performer of the day , jumping ten percent after positive analyst upgrades regarding its cancer vaccine pipeline .
• 2:50
  We also saw a historic moment for Apple today .
• 2:53
  John Ternus officially took over as CEO , with Tim Cook moving to Executive Chair .
• 2:59
  Despite the broad market selloff , Apple shares actually rose two point six percent as investors viewed the transition as orderly and focused on the upcoming Apple Intelligence hardware cycle .
• 3:11
  Meanwhile , in the EV sector , NIO reported a widerthanexpected loss this morning , which added to the general market malaise .
• 3:19
  So , how do we trade this environment ?
• 3:23
  We recommend a Barbell Strategy to navigate the current volatility .
• 3:27
  First , consider defensive rebalancing .
• 3:30
  Given the high yield on the 10year Treasury , the equity risk premium has narrowed .
• 3:34
  You might look at the Health Care Select Sector SPDR Fund , ticker XLV .
• 3:39
  It provides a hedge against inflation and economic slowdown , with specific strength in companies like Moderna for growth and Merck for value .
• 3:48
  Second , use energy as a geopolitical hedge .
• 3:52
  With the Strait of Hormuz effectively closed , oil prices are likely to remain elevated .
• 3:58
  Look at the Vanguard Energy ETF , ticker VDE , or specific stocks like Chevron .
• 4:04
  These serve as a natural hedge against the exact risks depressing the rest of the market .
• 4:10
  Third , for fixed income , with the Fed likely to hike soon , bond yields may be near a local peak .
• 4:17
  You could consider the iShares Core U.S.
• 4:19
  Aggregate Bond ETF , ticker AGG , for a conservative holding , or the iShares 20 plus Year Treasury Bond ETF , ticker TLT , if you are betting on an eventual economic slowdown .
• 4:32
  Finally , stay selective with tech .
• 4:35
  Avoid the speculative , highrisk names and stick to Quality Growth .
• 4:39
  Apple , ticker AAPL , is a great example .
• 4:42
  Its leadership transition and massive cash pile make it a safe haven within the tech sector right now .
• 4:49
  To wrap things up , September 2026 is likely to remain choppy .
• 4:53
  Balance your portfolio with highquality , cashrich tech like Apple on one side , and defensive inflation hedges like Health Care and Energy on the other .
• 5:02
  You might even consider GLD to protect against further escalations in the Middle East .
• 5:08
  Thanks for tuning in to Spy Trader .
• 5:10
  I’m Sunny Gains , and I’ll be back in a few hours with your next update .
• 5:15
  Happy trading !