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Navigating the Iran Shock: Energy Volatility and the SmallCap Edge · The SPY Trader

• 0:00
  Good morning and welcome to the Spy Trader podcast !
• 0:03
  I am your host , Penny Wise , and I am so glad you could join me for your early morning market pulse .
• 0:09
  It is currently 6 am on Thursday , April 30th , 2026 , here on the West Coast .
• 0:16
  Grab your coffee or your tea , and let’s dive into what is shaping up to be a very complex day in the financial world .
• 0:23
  Right now , the big story everyone is talking about is what many are calling the Iran Shock .
• 0:29
  We are seeing a lot of market volatility because of the ongoing conflict in the Middle East .
• 0:35
  President Trump has issued warnings about an extended naval blockade of the Strait of Hormuz , and that has sent Brent crude oil prices soaring above one hundred and twenty dollars per barrel .
• 0:47
  This is reigniting inflation fears across the board .
• 0:51
  While our March inflation numbers stood at three point three percent , economists are already forecasting that April inflation could jump to three point nine percent .
• 1:01
  This situation puts the Federal Reserve in a very difficult position .
• 1:05
  Just yesterday , on April 29th , the Fed decided to keep interest rates steady between three point five and three point seven five percent .
• 1:15
  However , it was a divided house .
• 1:18
  Some members wanted to cut rates to support economic growth , while others argued that rising energy costs mean we need to keep rates higher for longer .
• 1:28
  On a positive note for stability , Chairman Jerome Powell confirmed he will stay on the Board of Governors after his term ends on May 15th , which gives us some muchneeded institutional continuity .
• 1:40
  Looking at the latest market performance , it has been a mixed bag .
• 1:45
  The Nasdaq Composite managed a tiny gain of point zero four percent , but the Dow fell point six percent , and the S&P 500 remained nearly flat .
• 1:55
  However , if we look at the month of April as a whole , the Technology Select Sector SPDR Fund , ticker XLK , has actually led the way , up nearly fifteen percent .
• 2:07
  But don't let that broad number fool you ; the market is splitting based on who is winning the artificial intelligence race .
• 2:15
  For example , Alphabet jumped seven percent after a massive revenue beat and strong cloud performance .
• 2:21
  Amazon also rose three percent .
• 2:24
  On the flip side , Meta Platforms tumbled seven percent in afterhours trading because of softer user growth and massive spending on their Superintelligence Labs .
• 2:34
  Microsoft remained flat , even with strong growth in Azure , because investors are reacting to their huge one hundred and ninety billion dollar spending outlook for the year .
• 2:45
  Interestingly , the big winner lately isn't tech , but smallcap stocks .
• 2:50
  The Vanguard Russell 2000 ETF , or VTWO , is outperforming the S&P 500 yeartodate with an eleven point one percent return .
• 3:00
  These smaller companies are viewed as a hedge against global drama because they have less exposure to the Strait of Hormuz blockade and are benefiting from the One Big Beautiful Bill tax incentives .
• 3:11
  Meanwhile , energy remains the topperforming sector of 2026 .
• 3:17
  Companies like ConocoPhillips are seeing massive cash flows , recently reporting firstquarter earnings of two point two billion dollars .
• 3:26
  So , what is the strategy for your portfolio today ?
• 3:29
  We are in a sideways phase where the AI boom is fighting against the energy shock .
• 3:34
  For your recommendations , I am looking at the Vanguard Russell 2000 ETF , VTWO , as an overweight play .
• 3:43
  It is a great geopolitical hedge right now .
• 3:46
  I also recommend a Buy or Hold on SPDR Gold Shares , ticker GLD .
• 3:52
  With spot gold near record highs of fiftysix hundred dollars an ounce and a weaker U.S.
• 3:57
  Dollar Index at ninetyeight point eight two , gold remains the premier safe haven .
• 4:03
  You might also want to accumulate the Financial Select Sector SPDR , known as XLF .
• 4:09
  As the Fed delays rate cuts , major banks like JPMorgan Chase will continue to enjoy higher interest income .
• 4:17
  For the techheavy Invesco QQQ Trust , stay selective and focus on cloud winners like Alphabet over those with heavy capital expenditures like Meta .
• 4:27
  Finally , stay underweight on longterm bonds like the iShares twenty plus Year Treasury Bond , ticker TLT .
• 4:35
  The Iran Shock is pushing the tenyear Treasury yield up to four point four one percent , making longterm fixed income very vulnerable .
• 4:44
  We have big earnings from Eli Lilly and Apple coming tomorrow , which will be major bellwethers for healthcare and tech .
• 4:51
  But for now , stay domesticfocused and keep an eye on those energy prices .
• 4:57
  Thanks for listening to Spy Trader .
• 4:59
  I’m Penny Wise , and I’ll be back in a few hours with your next update .
• 5:04
  Have a wonderful morning !