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AI Reality Check: The Tech Tumble and the Great Sector Rotation · The SPY Trader

• 0:00
  Hello there, friends and fellow investors!
• 0:02
  I am your host, Barnaby Bull, and you are listening to Spy Trader.
• 0:06
  It is 2:30 pm on Thursday, October 29th, 2026, here on the Pacific coast.
• 0:10
  Grab a cup of cocoa and let us talk about what is happening in the markets today, because it has been a real whirlwind!
• 0:17
  Today felt like a bit of a reality check for the tech world.
• 0:20
  We have all been excited about Artificial Intelligence, but today investors started asking for more than just promises.
• 0:26
  The S&P 500, which we follow through the SPY ETF, ended its threeday winning streak, falling zero point three percent to finish at seven thousand seven hundred twenty point thirtynine.
• 0:37
  But the real story was in the techheavy Nasdaq, or the QQQ, which tumbled one point four percent.
• 0:43
  Why the gloom in the gadget world?
• 0:45
  Well, Alphabet, the parent company of Google, had its worst day on record, plunging over twelve percent!
• 0:51
  They reported a massive fiftyone billion dollar quarterly spend on data centers, and the market is worried that all that spending is not turning into profit fast enough.
• 1:00
  However, it was not all bad news for the big players.
• 1:03
  Microsoft actually rose two point six percent because their Azure cloud business grew by a massive fortyeight percent, proving they really know how to make AI pay off.
• 1:13
  And if you are a Mac fan, Apple is finally giving us what we have wanted by launching a touchscreen MacBook Pro with the M5 chip.
• 1:21
  While big tech was struggling, the rest of the market was actually having a bit of a party.
• 1:26
  The Russell 2000, which tracks smaller companies, went up one percent.
• 1:30
  This tells us that investors are moving their money out of the giant tech companies and spreading it around.
• 1:36
  Healthcare was a huge winner today too, providing a nice cushion.
• 1:39
  Eli Lilly jumped six point six percent and Merck rose nearly four percent.
• 1:43
  Even Mastercard climbed over four percent, which means people are still out there spending their hardearned money.
• 1:50
  On the economic front, Fed Chair Kevin Warsh and the Federal Reserve kept interest rates between three point seventyfive and four percent yesterday.
• 1:57
  But with inflation creeping up to three point seven percent, we might see a rate hike in December.
• 2:02
  So, how should we trade this?
• 2:04
  First, let us talk about diversification.
• 2:07
  To avoid the risk of having all your eggs in the tech basket, consider the Vanguard Total Stock Market ETF, or VTI.
• 2:13
  It captures those smaller companies that are doing great right now even while the big tech names drag.
• 2:19
  Second, I am recommending we look at the Health Care Select Sector SPDR Fund, ticker XLV.
• 2:25
  With companies like Eli Lilly performing so well, healthcare offers a safe way to grow your money even if the Fed raises rates.
• 2:32
  Third, for your safety money, check out the iShares Core U.S. Aggregate Bond ETF, known as AGG.
• 2:38
  It is much more stable than longterm bonds right now while we wait for the Fed.
• 2:43
  Finally, if you still want to invest in AI, look at the people building the machines rather than just the software.
• 2:49
  KLA Corp, ticker KLAC, rose five point five percent today because even if software companies are being questioned, we still need the equipment to make the chips.
• 2:58
  That is it for today’s update.
• 3:00
  Stay smart, stay diversified, and I will talk to you in a few hours!