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AI Euphoria and the Commodity Breakout · The SPY Trader

• 0:00
  Good morning and welcome back to Spy Trader , the only podcast that delivers market insights before the opening bell , no matter how early or how hungover you are .
• 0:10
  I'm your host , Skip Moneybags , and believe it or not , it's 5 am on Saturday , December 27th , 2025 , Pacific time .
• 0:20
  We are diving into a summary of the holidayshortened trading week , which has been quiet but incredibly resilient .
• 0:28
  The market has been basking in the glow of the socalled ' Santa Claus Rally , ' hitting new highs as the year winds down .
• 0:34
  The S&P 500 closed out the recent trading week comfortably higher , up approximately 1.4% , and the Nasdaq Composite added 1.2% .
• 0:45
  While the latest session was flat due to low holiday volume , the underlying momentum remains strongly bullish , driven primarily by technology and positive macroeconomic news .
• 0:58
  This week’s rally confirmed that investors are confident in the ‘ soft landing ’ narrative .
• 1:03
  We saw two major macro signals supporting this : first , the delayed Q3 GDP report showed the economy expanded at a robust 4.3% annualized pace , reinforcing corporate confidence .
• 1:17
  Second , the November CPI showed headline inflation slowing to 2.7% , the slowest core inflation pace since 2021 .
• 1:28
  This mix of strong growth and cooling prices is the recipe for equity strength .
• 1:33
  Diving into sector performance , Information Technology , tracked by the XLK ETF , was the undisputed champion , surging nearly 5.0% leading into Christmas Eve .
• 1:46
  This reflects continued euphoria around Artificial Intelligence .
• 1:51
  Materials , or XLB , also had a strong lateweek push , gaining 0.61% in the final session , largely due to a massive spike in precious metals , with silver hitting a new record high .
• 2:04
  On the company front , AI continued to steal the spotlight .
• 2:08
  Nvidia , or NVDA , saw a significant boost after announcing a licensing deal with AI startup Groq , fueling sentiment across the semiconductor space , including names like Advanced Micro Devices and Broadcom .
• 2:23
  In retail news , Target , ticker TGT , jumped over 3% on reports that activist investor Toms Capital had taken a stake , suggesting potential strategic changes are on the horizon .
• 2:35
  Meanwhile , Nike , NKE , finished the week strong following solid earnings and a massive vote of confidence from Apple CEO Tim Cook , who bought a significant amount of shares .
• 2:47
  Our analysis suggests that the current market structure is a classic ‘ riskon ’ environment .
• 2:53
  The tech sector's continued leadership , propelled by AI catalysts , means growth names will likely continue to outperform .
• 3:01
  While the 4.3% GDP number might slightly reduce the urgency for rapid Fed rate cuts , the consistent moderation of inflation assures the market that cuts are coming in 2026 , which is a major longterm tailwind for bonds and equities alike .
• 3:19
  The tactical takeaway is the breakout in commodities .
• 3:23
  The strong performance of silver and gold and mining stocks like FreeportMcMoRan , or FCX , suggests that investors are increasingly using these assets as an inflation hedge and a play against potential dollar weakness when the Fed finally acts .
• 3:38
  So , how do we trade this quiet but bullish market ?
• 3:41
  For core longterm holdings , stick with the basics .
• 3:44
  Maintain exposure through broadmarket ETFs like the Vanguard S&P 500 ETF , VOO , or the total market ETF , VTI .
• 3:55
  These instruments capture the overall macro benefit .
• 3:58
  For aggressive growth exposure , you absolutely need to maintain your position in the tech leaders .
• 4:04
  The Invesco QQQ Trust , QQQ , or the Technology Select Sector Fund , XLK , remain essential .
• 4:12
  Specific stock examples like NVDA continue to be the key bellwethers for this entire cycle .
• 4:19
  Finally , for a tactical hedge , consider adding exposure to the commodity complex .
• 4:25
  The SPDR Gold Shares , GLD , is a solid choice to play the recent breakout in precious metals , which is confirmed by the Material sector's recent strength .
• 4:36
  We also recommend maintaining core fixedincome exposure through instruments like the iShares Core U.S.
• 4:41
  Aggregate Bond ETF , AGG , betting on bond price appreciation as yields eventually decline next year .
• 4:50
  That's it for this holiday weekend edition of Spy Trader .
• 4:55
  Stay safe , trade smart , and we'll catch you next time for more market insights .