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The AI Pullback: Navigating the New Market Rotation · The SPY Trader

• 0:00
  Hello everyone and welcome back to another episode of Spy Trader , the podcast that keeps you updated on everything moving the markets while you go about your busy day .
• 0:09
  It is 2:30 pm on Friday , July 17th , 2026 , here in the beautiful Pacific time zone .
• 0:17
  I am your host , Sunny Shares , and it is certainly an interesting afternoon to be looking at the ticker tape .
• 0:23
  We have seen a lot of movement today , so let's dive right into what is happening in your portfolio .
• 0:30
  Today is what we call a riskoff session in the markets .
• 0:33
  That essentially means investors are pulling back and playing it safe .
• 0:37
  We are seeing a sharp selloff in technology and a broader retreat across all the major indices .
• 0:44
  The S&P 500 , which we track via the SPY ETF , fell about 0.86 percent to 7,468.83 .
• 0:55
  The techheavy Nasdaq , or the QQQ , took a harder hit , dropping 1.19 percent to 25,573.27 , while the Dow Jones Industrial Average , the DIA , slipped about 0.56 percent to 52,260.46 .
• 1:15
  The main story today is the pullback in artificial intelligence stocks and some growing geopolitical instability .
• 1:23
  The tech sector is leading the way down , with the Philadelphia Semiconductor Index , ticker SOX , tumbling nearly 17 percent so far in July alone .
• 1:33
  Highflyers like NVIDIA and Microsoft are under pressure as investors start to wonder if the trilliondollar AI spending boom is sustainable .
• 1:42
  We also saw some specific news regarding Alphabet , ticker GOOGL .
• 1:47
  Their stock closed down 3 percent today following news of delays in their Gemini 3.5 Pro internal benchmarks .
• 1:55
  It wasn't just tech , though .
• 1:57
  Over in healthcare , Intuitive Surgical , ticker ISRG , crashed over 12 percent today .
• 2:03
  This was due to concerns over insurance coverage and slowing growth for their da Vinci robotic systems .
• 2:09
  On the flip side , major banks like JPMorgan Chase , Citigroup , and Wells Fargo reported upbeat secondquarter results this week , though that sector is now looking a bit overbought .
• 2:21
  We are also keeping a very close eye on the Middle East .
• 2:25
  Tensions between the U.S.
• 2:26
  and Iran have caused oil prices to spike above 81 dollars per barrel .
• 2:31
  This has also pushed Gold , ticker GLD , back above the 4,000 dollar mark .
• 2:37
  On the macro side of things , the inflation news was actually okay .
• 2:42
  Headline inflation fell to 3.5 percent , and Core CPI is sitting at a relatively tame 2.6 percent .
• 2:51
  However , because of those rising oil prices , there is a new fear that the Federal Reserve might hike interest rates one more time from the current 3.75 percent level before the year ends .
• 3:03
  On a positive note , the American consumer seems resilient , with the University of Michigan Consumer Sentiment index rising to 54.4 this month .
• 3:14
  Before we get to recommendations , we have to mention Netflix .
• 3:19
  Ticker NFLX suffered a roughly 11 percent drop today after a disappointing revenue forecast .
• 3:25
  It looks like the growth spurt they had from their passwordsharing crackdown might be reaching its limit .
• 3:30
  So , what do we make of all this ?
• 3:32
  We believe the market is going through a valuation reset .
• 3:35
  Essentially , the AI growth story got a little ahead of itself , and now investors are rotating into value sectors .
• 3:43
  For our trading recommendations today , we suggest focusing on balance .
• 3:49
  First , for core growth , consider holding or accumulating the Vanguard Total Stock Market ETF , ticker VTI .
• 3:56
  This gives you broad exposure to small and midcaps that might benefit as money moves out of big tech .
• 4:02
  Second , we like the Health Care Select Sector SPDR , ticker XLV , as a buy .
• 4:07
  Valuations there are at 15year lows , making it a great defensive hedge .
• 4:12
  For those looking for a longterm AI play , Alphabet , ticker GOOGL , is a buy on these dips .
• 4:19
  If their cloud revenue continues to grow when they report on July 22nd , today's price will look like a bargain .
• 4:26
  We also recommend the Vanguard Real Estate ETF , ticker VNQ , because the data centers inside that fund are still winning from the AI buildout .
• 4:36
  Finally , we recommend avoiding the iShares 20 plus Year Treasury Bond , ticker TLT .
• 4:41
  With oil prices threatening inflation , longterm bonds are just too risky right now .
• 4:47
  That is all for this update of Spy Trader .
• 4:50
  I am Sunny Shares , wishing you a wonderful weekend and a steady hand in the markets .
• 4:56
  We will see you next time !