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Market Momentum: Tech Surge and Rate Cut Hopes · The SPY Trader

• 0:00
  Good morning , traders , and welcome to Spy Trader !
• 0:03
  I'm your host , Prof.
• 0:04
  Bullish Bear , here to help you navigate the everexciting world of the stock market .
• 0:09
  It's 6 am on Monday , August 11th , 2025 , Pacific Time , and we've got a lot to unpack .
• 0:17
  The past week saw a fantastic close on Friday , August 8th , with all three major indexes closing higher and showing strong weekly gains .
• 0:27
  The Nasdaq Composite , in particular , hit a new alltime closing high of 21,450.02 , jumping 1% .
• 0:36
  The S&P 500 climbed 0.7% to 6,389.45 , and the Dow Jones Industrial Average rose 0.5% to 44,175.61 .
• 0:53
  This optimism is partly fueled by hopes for the first interest rate cut this year , potentially in September .
• 1:00
  The CBOE Volatility Index , or VIX , our market fear gauge , was down 8.6% to 15.15 , signaling reduced apprehension .
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  However , as we look to Monday , U.S.
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  stock futures are mixed , with Nasdaq 100 futures slightly down while Dow Jones and S&P 500 futures are up , as investors await key inflation data releases this week .
• 1:28
  Recent news has certainly kept things interesting .
• 1:31
  Tariff developments have been a hot topic .
• 1:33
  After some initial jitters , reciprocal tariffs did go into effect on August 7th .
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  President Trump also announced plans for a 100% tariff on semiconductor imports .
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  But here's the silver lining : exemptions for companies committing to U.S.
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  production have provided some reassurance , especially for our chip stocks .
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  On the company front , Apple surged 13% last week after announcing a massive new 100 billion commitment to America , boosting its total U.S.
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  investment to 600 billion over the next four years , focusing on domestic manufacturing and a U.S.
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  silicon supply chain .
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  Palantir Technologies also had a phenomenal week , with recordbreaking 1 billion quarterly revenues and raised fullyear guidance , sending its share price up 16% .
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  It's up over 109% yeartodate , driven by excitement for its Artificial Intelligence Platform .
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  Gilead Sciences jumped 8.3% after strong secondquarter earnings , and Expedia and Monster Beverage also rose sharply after beating forecasts .
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  Unfortunately , not all news was good : The Trade Desk plunged nearly 39% and Texas Roadhouse tumbled 6.6% after missing earnings estimates .
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  Intel saw a mixed reaction , initially falling after the President's comments , but chip stocks like Nvidia and AMD broadly rebounded thanks to those tariff exemptions , reportedly agreeing to give the U.S.
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  a 15% cut on AI chip sales to China .
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  And finally , global M&A activity has surged to 2.6 trillion yeartodate , making it the busiest period since 2021 , driven by boardroom ambitions and a rise in AIrelated deals .
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  Now , let's dive into the market's performance and the broader economic picture .
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  The technology sector has been the clear leader , advancing 1% on Friday , with the Nasdaq 100 , heavily weighted towards tech , hitting new records .
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  This surge is largely thanks to the ' big techs ' and all the excitement around artificial intelligence .
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  The Financials sector also showed positive momentum , but some analysis suggests the market might be overestimating longterm earnings growth , with many stocks in the sector appearing broadly overvalued .
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  Healthcare advanced as well , but this sector faces significant challenges like rising medical costs , regulatory pressures , disappointing Medicare Advantage earnings guidance , and substantial cybersecurity risks .
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  Communications stands out as the bestperforming sector yeartodate and is still considered undervalued , primarily fueled by the strong returns of Meta Platforms and Alphabet .
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  Energy , despite some recent gains , remains one of the more undervalued sectors , with oil stocks potentially offering a natural hedge against inflation .
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  In real estate , the Morningstar US Real Estate Index was largely flat in July , with preferred areas including defensive properties like medical office buildings , research and development , multifamily housing , cellphone towers , and selfstorage facilities .
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  For Industrials , caution is advised given expectations for decelerating economic growth .
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  From a macroeconomic perspective , the U.S.
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  economy rebounded nicely in Q2 2025 , with a 3.0% annualized GDP growth rate .
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  The Atlanta Fed estimates Q3 growth at 2.5% .
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  Inflation , however , is on the rise , hitting 2.70% for the 12 months ending June 2025 , up from 2.40% in May .
• 5:31
  We're all waiting for the next inflation update , the July CPI data , scheduled for August 12th .
• 5:38
  S&P Global US PMI data even hints at inflation potentially climbing above 4% in coming months due to tariffs .
• 5:48
  The labor market has shown signs of softening , with job growth slowing to 73,000 in July , and the unemployment rate rising to 4.2% .
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  Jobless claims also increased for the week ending August 2nd .
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  Forecasts even suggest tariffs could lead to the unemployment rate rising by 0.3 percentage points by the end of 2025 .
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  On a brighter note , there's widespread optimism about a potential interest rate cut in September , which would be the first of the year .
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  However , consumer sentiment remains weaker than expected due to concerns about job prospects , business conditions , and the potential impact of tariffs .
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  So , what does this all mean for your portfolio ?
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  The U.S.
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  stock market is currently enjoying upward momentum , driven by strong tech performance , easing tariff fears , and hopes for interest rate cuts .
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  But we need to keep an eye on those underlying macroeconomic indicators like inflation and the softening labor market .
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  First , for broad market exposure and stability , given the positive trajectory and reduced volatility , a diversified broad market ETF is a solid core holding .
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  The S&P 500 has a strong track record .
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  I recommend considering the Vanguard S&P 500 ETF , ticker VOO , or the iShares Core S&P 500 ETF , ticker IVV .
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  For even wider diversification across the entire U.S.
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  stock market , including large , mid , small , and microcap stocks , the Vanguard Total Stock Market ETF , ticker VTI , is an excellent choice .
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  Second , for growthoriented investors with a higher risk tolerance , the technology sector continues to lead the way , with big techs and AIdriven companies showing significant gains .
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  The Nasdaq hitting new highs confirms robust growth here .
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  The Invesco QQQ Trust , ticker QQQ , offers concentrated exposure to the Nasdaq100 , heavily weighted towards technology .
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  For individual company exposure , Apple Inc.
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  , ticker AAPL , remains compelling due to its massive new U.S.
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  investment commitments .
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  Palantir Technologies , ticker PLTR , is another highgrowth example , having soared over 100% this year , thanks to its strong performance and AI platform excitement .
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  Third , for investors seeking value and an inflation hedge , while growth stocks are leading , the Communications and Energy sectors are identified as undervalued .
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  Energy stocks , in particular , can offer a hedge against persistent inflation .
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  You could look into the Energy Select Sector SPDR Fund , ticker XLE , or carefully select individual energy companies .
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  For Communications , largecap companies like Alphabet , ticker GOOGL , and Meta Platforms , ticker META , are driving the sector's performance and are considered undervalued .
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  Fourth , for incomefocused investors and portfolio stability , with an anticipated interest rate cut in September , highquality bond ETFs can provide stability and income .
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  This is especially true in an environment where the labor market is softening and consumer confidence is a concern .
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  The iShares Core U.S.
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  Aggregate Bond ETF , ticker AGG , or the Vanguard Total Bond Market ETF , ticker BND , are excellent choices for broad exposure to U.S.
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  investmentgrade bonds .
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  Lastly , a few cautionary considerations : while the Health Care Select Sector SPDR Fund , ticker XLV , has seen gains , the sector faces significant structural issues like rising costs and cybersecurity threats .
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  Investors should be selective here .
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  Also , the full impact of recent tariffs on economic growth and employment still bears watching , as they are predicted to negatively affect GDP and employment .
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  This could introduce future volatility .
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  And as we saw with The Trade Desk and Texas Roadhouse , earnings misses can lead to sharp declines , so thorough due diligence on individual company financials is always crucial .
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  In summary , the U.S.
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  stock market is generally on a positive trend , with strong leadership from the technology sector and optimism surrounding monetary policy .
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  However , underlying economic softness in the labor market and inflationary pressures , alongside the evolving tariff landscape , suggest a continued need for a balanced and informed investment approach .
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  Diversification across sectors and asset classes , using instruments like the ETFs we've discussed , remains a prudent strategy .
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  That's all for this episode of Spy Trader .
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  Until next time , keep those portfolios looking bullish !