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The Defensive Playbook: Navigating Inflation and the AI Dip · The SPY Trader

• 0:00
  Good morning and happy Saturday to my favorite market watchers!
• 0:05
  It is 6 am on Saturday, October 17th, 2026, here in the Pacific time zone.
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  I am your host, Sunny SideUp, and you are listening to Spy Trader.
• 0:14
  Grab your coffee and settle in, because while the market was a bit of a roller coaster this week, we have plenty of insights to get you ready for the days ahead.
• 0:22
  It was a tough week on Wall Street, with the major indices showing some real nerves.
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  The S&P 500, which we track through the SPY ETF, fell over one percent on Friday to close at 7,659.44.
• 0:36
  That actually capped off its worst weekly loss since January.
• 0:39
  The techheavy Nasdaq, or the QQQ, took a bigger hit, plunging over two percent on Friday and nearly four and a half percent for the week.
• 0:48
  On the other hand, the Dow Jones Industrial Average, known as the DIA, was the sturdy house in the neighborhood, only slipping about a third of a percent as investors moved their money into more defensive stocks.
• 0:59
  Why the long faces on the trading floor?
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  Well, inflation is proving to be quite sticky.
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  September data showed prices rising at 3.7 percent annually, which was higher than expected.
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  This has folks worried that Fed Chair Kevin Warsh might hike interest rates again at the end of October.
• 1:16
  To make matters more complicated, the 10year Treasury yield hit a 24year high near 5.3 percent, and oil prices have jumped above 110 dollars a barrel due to tensions between the U.S. and Iran.
• 1:27
  When borrowing costs and gas prices go up, investors tend to get a little jumpy.
• 1:32
  We also saw some AI jitters this week.
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  CoreWeave, an AI cloud provider, saw its stock drop 34 percent in just ten days because of concerns over its debt.
• 1:41
  Even though Nvidia CEO Jensen Huang defended them, Nvidia shares still fell about three percent.
• 1:48
  It seems the market is pausing to ask if all this spending on AI will pay off right away.
• 1:53
  But it was not all bad news!
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  The healthcare sector, represented by the XLV ETF, was a total superstar.
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  UnitedHealth Group reported a blowout quarter with earnings well above estimates, sending their shares up nearly four percent.
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  Johnson and Johnson also had a great showing, expecting to hit 100 billion dollars in annual revenue for the first time ever.
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  In the banking world, it was a tale of two cities.
• 2:16
  Goldman Sachs was a massive winner with a 30 percent earnings beat, thanks to their trading desks absolutely crushing it.
• 2:23
  JPMorgan Chase had a bit of a rockier start with a revenue miss, but their longterm outlook remains positive despite CEO Jamie Dimon warning about government deficits.
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  So, what is the game plan for your portfolio?
• 2:35
  First, consider rotating into defensive growth.
• 2:39
  I like the Health Care Select Sector SPDR Fund, or XLV.
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  History shows it usually gains about five percent after midOctober, and with companies like UnitedHealth showing such strong power, it is a great safe harbor.
• 2:51
  Second, let's look at some safehaven diversification.
• 2:55
  With everything going on globally, holding some gold through the SPDR Gold Shares, or GLD, is a smart move.
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  Morgan Stanley even has a longterm target of 5,000 dollars an ounce for gold, making it a great hedge against bond market instability.
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  Third, if you want financial exposure, be picky.
• 3:13
  I suggest looking at Goldman Sachs or the broader Financial Select Sector SPDR, the XLF.
• 3:18
  Goldman is proving that market volatility is actually good for their trading business, which is a more reliable bet right now than traditional lending.
• 3:26
  Finally, for my tech fans, stay patient.
• 3:28
  While the current dip in the QQQ might look like a bargain, I would wait for Alphabet and Amazon to report their earnings later this month.
• 3:36
  We want to make sure big companies are still spending on AI before we dive back in headfirst.
• 3:41
  That is all for this morning's update.
• 3:43
  Stay steady, stay informed, and enjoy your weekend.
• 3:46
  This has been Sunny SideUp for Spy Trader!