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Relief Rallies and the AI Infrastructure Boom · The SPY Trader

• 0:00
  Hello everyone , and welcome back to the Spy Trader podcast .
• 0:04
  I am your host , Barnaby Bullmarket , and I am so glad you could join me for our afternoon update .
• 0:10
  It is currently 2:30 pm on Thursday , June 11th , 2026 , here in the Pacific time zone .
• 0:18
  If you have looked at your screens today , you probably noticed a whole lot of green .
• 0:22
  We are seeing what experts call a classic relief rally .
• 0:27
  The S&P 500 , which we track through the SPY ETF , is surging one point eight percent to hit roughly 7,394 .
• 0:36
  The Nasdaq Composite , or the QQQ , is doing even better , up two and a half percent to reach 25,810 , led by a massive rebound in semiconductors .
• 0:47
  Even the Dow Jones Industrial Average , the DIA , is joining the party , up one point nine percent to 50,849 .
• 0:58
  So , what is behind this sudden burst of optimism ?
• 1:01
  The primary driver is a major cooling of geopolitical tensions .
• 1:05
  President Trump announced via social media that he has cancelled scheduled strikes against Iran , signaling a potential deal to reopen the Strait of Hormuz .
• 1:16
  This news removed a massive risk premium that had been weighing on the markets .
• 1:21
  However , while the broad market is up , the energy sector , represented by the XLE ETF , is a notable laggard today , falling about four percent as oil prices dropped to eightysix dollars a barrel because those immediate war fears have eased .
• 1:37
  Over in the technology sector , which is up two and a half percent today , the focus remains on the AI infrastructure trade .
• 1:45
  Micron Technology , ticker MU , skyrocketed eleven point sixtysix percent today .
• 1:52
  As Nvidia's new Vera Rubin AI platforms enter mass production , we are seeing a critical memory supply crisis , with reports that cloud providers have already booked out capacity through 2027 .
• 2:05
  We also just saw Apple conclude its Worldwide Developers Conference with the launch of Siri AI .
• 2:12
  Investors are feeling very optimistic that this AI overhaul will trigger a massive iPhone upgrade cycle .
• 2:20
  On the other hand , Oracle , ticker ORCL , saw its shares fall over eight percent despite beating earnings .
• 2:27
  Investors were spooked by the company’s plan to raise forty billion dollars in new debt and equity to fund data center expansion .
• 2:35
  We are also seeing some liquidity shifts as the market prepares for the historic SpaceX IPO scheduled for tomorrow , June 12th .
• 2:43
  Now , even though the market is rallying today , we have to keep an eye on the macro picture , which is still a bit complicated .
• 2:51
  The Producer Price Index for May came in at six point five percent , which is much higher than expected .
• 2:57
  This suggests that wholesale costs are still rising quickly .
• 3:01
  Because of this , the Federal Reserve's bias toward cutting rates is officially dead .
• 3:07
  Markets are now pricing in a potential interest rate hike later in 2026 rather than a cut , with the Fed funds rate currently sitting in the three point five to three point seven five percent range .
• 3:20
  Combine that with a soft GDP growth of only one point six percent in the first quarter , and we have some real concerns about stagflation .
• 3:28
  So , how should you handle your portfolio in this environment ?
• 3:31
  First , I recommend staying overweight in AI infrastructure .
• 3:35
  The buildout has shifted from chip design to supply chain bottlenecks .
• 3:40
  Consider adding to Micron Technology , ticker MU , or the VanEck Semiconductor ETF , ticker SMH , to capture the growth in the hardware layer .
• 3:51
  Second , it is a good time to diversify with value financials .
• 3:55
  If the Fed keeps rates higher for longer , the Financial Select Sector SPDR Fund , ticker XLF , or a giant like JPMorgan Chase , ticker JPM , could benefit from wider interest margins .
• 4:08
  Third , consider a strategic hedge with longterm bonds .
• 4:11
  If the economy continues to slow down , the iShares 20 plus Year Treasury Bond ETF , ticker TLT , will gain value if yields eventually drop .
• 4:22
  Finally , be cautious with cloud and software names like Oracle that are taking on massive debt .
• 4:28
  I would suggest focusing on cashrich tech like Microsoft , ticker MSFT , which has a stronger balance sheet .
• 4:36
  It is a day to enjoy the gains , but stay vigilant about that sticky inflation .
• 4:41
  I am Barnaby Bullmarket , and this has been Spy Trader .
• 4:45
  Happy trading , everyone !