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AI Fatigue and the Pivot to Defensive Havens · The SPY Trader

• 0:00
  Hello there and welcome back to Spy Trader!
• 0:02
  I am your host, Barnaby Bullseye, and I am so glad you could join me for our afternoon checkin.
• 0:07
  It is currently 2:30 pm on Friday, October 16th, 2026, out here on the Pacific Coast.
• 0:12
  We are closing out the week with quite a bit of movement on Wall Street, so let’s settle in and talk about what is happening with your money.
• 0:20
  Today, we are seeing a bit of a techled retreat.
• 0:23
  It seems investors are catching a case of AI fatigue and pivoting toward more defensive sectors.
• 0:29
  The Nasdaq Composite, which many of you track through the QQQ, fell sharply by 2.14 percent today.
• 0:34
  This has been its toughest week since June, largely because people are getting nervous about the massive debt being taken on to build AI infrastructure.
• 0:43
  The S&P 500, or SPY, also took a dip of 1.09 percent, though it is still up about 14 percent for the year, so do not let today's red screen spoil your whole weekend!
• 0:54
  Meanwhile, the Dow Jones held up relatively well, only dropping 0.34 percent as folks moved their cash into reliable bluechip companies.
• 1:04
  Looking at our sectors, technology is definitely in the eye of the storm.
• 1:08
  Semiconductor favorites like Micron and Intel both tumbled over 5 percent today.
• 1:13
  The big story is CoreWeave, an AI infrastructure provider.
• 1:16
  Their stock plunged nearly 12 percent amid fears of financial distress, which is sending some jitters across the whole tech space.
• 1:23
  On the brighter side, Healthcare has become a cozy safe haven.
• 1:27
  Big names like UnitedHealth and Johnson & Johnson helped that sector buck the downward trend.
• 1:32
  We are also seeing strength in Energy, which is the top performer of 2026 so far, as oil prices stay high at over 100 dollars a barrel due to tensions in the Middle East.
• 1:42
  On the macro side, things are a little sticky.
• 1:45
  Inflation for September came in at 3.7 percent, which was a bit higher than expected, mostly because gas prices jumped over 9 percent in a single month.
• 1:54
  Federal Reserve Chairman Kevin Warsh spoke in Bangkok today but stayed pretty quiet about interest rates.
• 2:00
  Even so, the market is betting there is a 45 percent chance we see another rate hike on October 28th.
• 2:05
  With the 10year Treasury yield sitting at 5.08 percent, those high riskfree rates are putting a lot of pressure on stock prices.
• 2:13
  In corporate news, SpaceX made waves by picking up a huge portfolio of mobile spectrum.
• 2:18
  That news really hammered traditional phone companies like AT&T and Verizon.
• 2:23
  Tesla also showed off a cool new Roadster using SpaceX tech, but even that could not keep the stock green as investors worried about high costs.
• 2:30
  Plus, Delta Air Lines warned that the revenge travel trend might finally be cooling off.
• 2:35
  So, what should we do with all this information?
• 2:38
  I have a few ideas to help you stay steady.
• 2:41
  First, consider a defensive rebalancing into the Health Care Select Sector SPDR Fund, or XLV.
• 2:46
  With market valuations looking quite high historically, healthcare offers more stable earnings.
• 2:52
  Second, you might want to shift some focus from growth into the Vanguard Total Stock Market ETF, known as VTI.
• 2:58
  It gets you away from that heavy tech concentration and into smaller companies that have been overlooked.
• 3:03
  Third, bonds are finally paying a real return!
• 3:06
  You can look at the iShares Core U.S. Aggregate Bond ETF, or AGG, to get a piece of those 5 percent yields without too much risk.
• 3:15
  Finally, do not forget gold.
• 3:17
  With inflation acting up and oil prices high, the SPDR Gold Shares, or GLD, is a classic hedge.
• 3:24
  Gold recently hit over 4,100 dollars an ounce!
• 3:28
  For now, the name of the game is derisking.
• 3:32
  It is probably best to avoid chasing those tech dips until we hear from the Fed later this month.
• 3:38
  That is all for today!
• 3:39
  I am Barnaby Bullseye, and this has been Spy Trader.
• 3:42
  Have a wonderful, safe weekend, and I will talk to you next time.