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The Warsh Era Begins: Navigating the Fed’s New Rate Hike · The SPY Trader

• 0:00
  Hello everyone and welcome back to the Spy Trader podcast !
• 0:04
  I am your host , Sunny Sideup , and I am so glad you could join me for our midweek market breakdown .
• 0:10
  It is currently 2:30 pm on Wednesday , September 16th , 2026 , here in the Pacific time zone , and boy , do we have a lot to talk about today .
• 0:20
  If you have been watching the ticker symbols this afternoon , you probably noticed things are getting a bit spicy out there .
• 0:28
  We have officially entered a new chapter in the markets , and today’s session was a bit of a rollercoaster .
• 0:33
  The big headline dominating everything right now is the Federal Reserve .
• 0:38
  For the first time in over three years , the Fed has decided to pull the trigger on an interest rate hike .
• 0:44
  Fed Chair Kevin Warsh announced a twentyfive basis point increase , bringing the federal funds rate to a range of threepointsevenfive to four percent .
• 0:53
  This really marks the start of the Warsh Era , as investors are calling it .
• 0:58
  The move is a direct response to persistent inflation , with the latest Consumer Price Index showing a reading of threepointfour percent , which is still quite a bit higher than that two percent target the Fed loves so much .
• 1:11
  Now , the market reaction was a bit of a mixed bag , but mostly leaning toward the red .
• 1:17
  The S&P 500 , which many of you track through the SPY or VOO ETFs , fell about pointfourfive percent to close at seven thousand five hundred and fiftyone .
• 1:28
  We are now about three percent off the record highs we saw back in August .
• 1:33
  The Dow Jones Industrial Average really felt the pinch today , dropping over one pointtwo percent , or about six hundred and thirtyone points .
• 1:42
  That is because those classic bluechip and financial stocks are extra sensitive to higher borrowing costs .
• 1:48
  On the bright side , the Nasdaq , or the QQQ , managed to stay almost flat , closing down less than pointone percent .
• 1:57
  Tech is really acting as a safe haven right now because of the massive growth we are seeing in Artificial Intelligence .
• 2:05
  Looking at the bigger picture , we can't ignore the geopolitical situation .
• 2:10
  The conflict between the U.S.
• 2:12
  , Israel , and Iran is causing major disruptions in global shipping and has pushed Brent crude oil prices above one hundred dollars a barrel .
• 2:21
  This is basically a supply shock that the Fed is trying to cool down .
• 2:26
  We also saw the tenyear Treasury yield hit five percent recently , though it backed off just a tiny bit today to fourpointninefive percent .
• 2:35
  In our sector analysis , technology continues to be the star performer of the year , up about fourteen percent .
• 2:42
  Even with higher rates , investors are flocking to companies like NVIDIA and Microsoft .
• 2:48
  These giants are viewed as resilient profit machines that can handle the higher cost of money .
• 2:55
  On the other hand , the real estate sector , tracked by the VNQ ETF , is under some serious pressure .
• 3:02
  With thirtyyear mortgage rates hovering near sevenpointfourfour percent , it is getting much harder for people to afford homes .
• 3:10
  We also saw a bit of a warning sign from the logistics world .
• 3:14
  J.B.
• 3:14
  Hunt tumbled over twelve percent today after warning about rising costs .
• 3:19
  It is often a canary in the coal mine for the broader economy .
• 3:23
  In other news , Apple just showed off the new iPhone 18 Pro and their first foldable , the iPhone Duo , though the stock still saw some selling pressure today along with the rest of the big names .
• 3:35
  And for the space fans out there , SpaceX is getting ready for Starship Flight 14 on September 22nd , which is keeping the aerospace sector very interesting .
• 3:45
  So , what is the game plan for your portfolio ?
• 3:49
  Given the Fed’s shift , I have a few recommendations to help you navigate this volatility .
• 3:55
  First , if you want defensive growth , look toward largecap tech .
• 3:59
  I suggest focusing on the Invesco QQQ Trust or the Technology Select Sector SPDR , known as XLK .
• 4:07
  Companies like Microsoft and NVIDIA have what we call fortress balance sheets , meaning they have plenty of cash to fund their own research without needing to borrow at these high rates .
• 4:18
  Second , we need a hedge against inflation and war .
• 4:22
  I recommend the Energy Select Sector SPDR , or XLE , and SPDR Gold Shares , which uses the ticker GLD .
• 4:31
  Gold actually rose fifty dollars today to over four thousand three hundred dollars an ounce .
• 4:36
  It is the ultimate safe haven right now .
• 4:39
  Third , for those looking for income , fixed income is finally back .
• 4:43
  You might look at the iShares twentyplus Year Treasury Bond ETF , or TLT , if you think the Fed might eventually cause a recession .
• 4:52
  If you want something a bit safer , the iShares Core U.S.
• 4:55
  Aggregate Bond ETF , or AGG , is offering a yield of over five percent .
• 5:02
  Finally , I’d suggest being very careful with highly leveraged sectors .
• 5:06
  It might be a good time to reduce your exposure to the Vanguard Real Estate ETF , or VNQ , as high mortgage rates and Treasury yields continue to be a headwind for property values .
• 5:18
  That is all for this update of Spy Trader !
• 5:22
  Remember to stay calm , stick to the facts , and I will see you in a few hours for the next update .
• 5:28
  Happy trading !