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AI vs. The Shutdown: Hedging Growth · The SPY Trader

• 0:00
  Welcome back to Spy Trader , the only podcast dedicated to navigating market volatility without losing your sense of humor .
• 0:08
  I'm your host , Barry Bullish , and it is 6 am on Friday , October 10th , 2025 , Pacific time .
• 0:16
  We're heading into the weekend after a slight pause in the multiweek rally that pushed the S&P 500 and the Nasdaq Composite to fresh record highs .
• 0:27
  The market is currently consolidating , locked in a fierce tugofwar between overwhelming AI optimism and serious macroeconomic headwinds .
• 0:36
  Let's quickly hit the tape .
• 0:37
  The major indices retreated slightly yesterday .
• 0:41
  The S&P 500 pulled back about 0.3 percent and the techheavy Nasdaq Composite dropped 0.1 percent , reflecting minor profittaking .
• 0:52
  We are seeing extremely polarized performance .
• 0:55
  Leadership remains firmly with Technology and Communication Services , with the Technology Select Sector SPDR Fund ( XLK ) up over 25 percent yeartodate , driven by continued enthusiasm for AI.However , we saw deeper pullbacks in sectors more sensitive to current macro issues , specifically Industrials and Energy , both falling over one point three percent .
• 1:20
  Corporate news was dominated by AI , yet again .
• 1:25
  Nvidia ( NVDA ) hit a new alltime high after an analyst raised its price target to three hundred dollars and on news of a potential chip export deal with Saudi Arabia .
• 1:36
  Advanced Micro Devices ( AMD ) is also soaring following a major deal with OpenAI .
• 1:42
  On the downside , Tesla ( TSLA ) saw its stock decline following news of a US probe into nearly two point nine million vehicles related to reported Full Self Driving traffic violations .
• 1:56
  This consolidation comes amid significant background noise .
• 2:00
  The US government shutdown is now in its ninth day , which is severely limiting crucial economic data releases like employment and inflation reports .
• 2:09
  Despite this , the Atlanta Fed still estimates strong thirdquarter GDP growth at three point eight percent .
• 2:16
  The Federal Reserve's willingness to cut rates further , as noted in recent minutes , remains supportive of growth sectors .
• 2:24
  But the uncertainty is driving risk aversion .
• 2:28
  Gold , tracked by GLD , is now trading near record highs above four thousand dollars per ounce , signaling that many sophisticated investors harbor systemic risk concerns , especially after JPMorgan CEO Jamie Dimon warned of a risk of a serious market correction over the next couple of years due to geopolitical tensions and high valuations .
• 2:53
  A bright spot , however , is consumer strength , reinforced by strong thirdquarter earnings from companies like Delta Air Lines ( DAL ) and PepsiCo ( PEP).Given the environment , our trading strategy needs to be dualfocused : maintain high exposure to secular growth while actively hedging macro risks .
• 3:12
  First , maintain core growth exposure .
• 3:15
  The AI trend is the engine of this market .
• 3:19
  Use the Invesco QQQ Trust ( QQQ ) or the Technology Select Sector SPDR Fund ( XLK ) to capture this trend , focusing on leaders like Nvidia ( NVDA).Second , diversification and derisking are critical .
• 3:34
  Use safehaven assets like the SPDR Gold Shares ( GLD ) to hedge against geopolitical and shutdown uncertainty .
• 3:41
  For stability , broad fixed income ETFs like the Vanguard Total Bond Market ETF ( BND ) are advisable .
• 3:50
  Third , look for value and resilience in consumer staples .
• 3:54
  The strong results from PepsiCo ( PEP ) suggest pricing power and inelastic demand , making the Consumer Staples Select Sector SPDR Fund ( XLP ) a good defensive holding .
• 4:07
  Finally , keep the Financial Select Sector SPDR Fund ( XLF ) on your radar .
• 4:14
  The major bank earnings next week will provide the first real insight into the health of the US consumer and business activity amid the current data blackout , offering us the next major signal for the overall market trajectory .
• 4:28
  That’s all for today .
• 4:30
  Trade wisely , and I’ll catch you next time on Spy Trader .