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AI Profits and the Hawkish Fed · The SPY Trader

• 0:00
  Hello and welcome back to the Spy Trader podcast !
• 0:03
  I'm your host , Barnaby Bullmarket .
• 0:06
  It’s exactly 2:30 pm on Wednesday , September 2nd , 2026 , here in the beautiful Pacific time zone .
• 0:14
  Thanks for tuning in for our midday update .
• 0:17
  We’ve got a lot to unpack today as the market tries to shake off those early September jitters .
• 0:22
  Today , we finally saw the major indices snap a threeday losing streak .
• 0:28
  The S&P 500 , or the SPY as we love to call it , rose 0.5 percent to finish at 7,666.60 .
• 0:38
  The Dow Jones , tracking under the DIA ticker , gained 0.6 percent , while the techheavy Nasdaq , or QQQ , climbed 0.5 percent to 26,217.83 .
• 0:53
  Interestingly , it was the smallcaps in the Russell 2000 , known as IWM , that stole the show today with a 1.1 percent gain .
• 1:02
  It looks like some bargain hunters are finally coming out of the woodwork .
• 1:06
  The big story continues to be the tugofwar between highoctane AI growth and some pretty tough macroeconomic headwinds .
• 1:13
  In the tech sector , Nvidia , ticker NVDA , rallied 3.2 percent , and Meta added 2.2 percent .
• 1:22
  These AI giants are really acting as a cushion for the rest of the market , absorbing the shocks from rising interest rates .
• 1:30
  Speaking of AI , Dell Technologies had an incredible session , jumping 15.8 percent — making it the S&P 500's top gainer — thanks to record profits from AI server demand .
• 1:44
  However , it’s not all smooth sailing .
• 1:47
  Broadcom , ticker AVGO , reported a massive 86 percent revenue jump for the third quarter but actually fell about 3.5 percent after hours .
• 1:57
  It seems like a classic ' sell the news' reaction .
• 2:00
  We also saw Snowflake , ticker SNOW , absolutely skyrocket over 20 percent in afterhours trading after reporting 37 percent product revenue growth .
• 2:10
  Now , why is the market still feeling a bit fragile ?
• 2:13
  Well , we’re dealing with the ' Warsh ' Fed .
• 2:17
  Fed Chair Kevin Warsh has been very hawkish lately , hinting that if inflation — which is currently at 3.4 percent — doesn't cool down rapidly , more rate hikes might be coming late in 2026 .
• 2:31
  Plus , we’ve got the escalated conflict in the Middle East affecting the Strait of Hormuz .
• 2:36
  That ’ s disrupted about 20 percent of global oil supplies , keeping Brent crude elevated at over 95 dollars a barrel .
• 2:45
  This is a primary driver of those ' stagflation ' fears we've been hearing about .
• 2:50
  So , what’s a trader to do in this environment ?
• 2:54
  Let’s talk strategy .
• 2:55
  For highconviction growth , I recommend looking at the Invesco QQQ Trust or Snowflake , ticker SNOW .
• 3:03
  Companies that can prove they are making money from AI are decoupling from traditional valuation metrics .
• 3:10
  If you are a growth investor , use dips in SNOW or Broadcom as entry points , as their cash flows are now clearly tied to the global AI infrastructure cycle .
• 3:20
  If you're looking to hedge against geopolitics and inflation , look at the Energy Select Sector SPDR , ticker XLE , or even gold via GLD .
• 3:30
  With the Strait of Hormuz remaining a flashpoint and oil staying above 95 dollars , energy isn't likely to crash , and gold remains a crucial store of value .
• 3:41
  For those looking for defensive income , the Financial Select Sector SPDR , ticker XLF , is a smart play .
• 3:48
  Higherforlonger interest rates are actually supporting net interest margins for banks .
• 3:53
  Think about American Express , ticker AXP , or Capital One , ticker COF , which both saw gains today .
• 4:00
  Finally , a word of caution on bonds .
• 4:03
  I’d suggest avoiding the longterm bond ETF , ticker TLT , for now .
• 4:09
  With the 10year Treasury yield near 4.8 percent and Chair Warsh ready to hike , the duration risk is just too high .
• 4:17
  If you need fixed income , stay in shortduration instruments like the Vanguard ShortTerm Bond ETF , ticker BSV .
• 4:25
  That’s it for today's update !
• 4:27
  I’m Barnaby Bullmarket , and this has been Spy Trader .
• 4:30
  Stay smart out there !