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The Great Rotation: Tech Slumps as Value Soars · The SPY Trader

• 0:00
  Hello everyone and welcome back to Spy Trader !
• 0:03
  I am your host , Penny Wise , and it is a real pleasure to have you with me today .
• 0:08
  It is 2:30 pm on Tuesday , July 28th , 2026 , out here on the Pacific Coast .
• 0:15
  We are seeing some wild movement under the hood of this market today , so grab your favorite snack and let's dive into what is moving your money .
• 0:22
  While the major indices look relatively calm on the surface , we are actually witnessing a massive tugofwar .
• 0:30
  The S&P 500 , which we track through the SPY , is up just a tiny bit , about point two percent , hovering near 7,430 .
• 0:39
  But the real story is the divide between the old and the new .
• 0:43
  The techheavy Nasdaq , or the QQQ , is struggling , down nearly point eight percent at some points today .
• 0:49
  Meanwhile , the Dow Jones Industrial Average is the star of the show , jumping over one percent or about 600 points to reach 52,800 .
• 1:00
  So why the split ?
• 1:01
  Well , investors are getting a little nervous about how much money big companies are spending on Artificial Intelligence .
• 1:08
  Last week , Alphabet and Tesla reported huge spending on AI infrastructure without showing immediate profits to match , and today the market is taking it out on the chipmakers .
• 1:19
  Micron is down eight point nine percent , while AMD and Applied Materials have both dropped about eight percent .
• 1:28
  The VanEck Semiconductor ETF , known as SMH , is officially down over twenty percent from its June highs .
• 1:35
  But it is not all gloom !
• 1:37
  The ' old economy ' is having a great day .
• 1:40
  CocaCola rose four point six percent after a fantastic revenue report , showing that we are all still buying our favorite drinks despite the economy .
• 1:49
  SherwinWilliams also soared over eight percent as the housing and industrial markets stabilize .
• 1:56
  Even in healthcare , Bristol Myers Squibb gained over one point seven percent because they are using an AI partnership with Nvidia to actually save money on drug discovery .
• 2:07
  Looking at the bigger picture , we have some inflation concerns creeping back in .
• 2:12
  Brent crude oil just hit one hundred dollars a barrel due to tensions in the Strait of Hormuz .
• 2:17
  This is pushing bond yields higher , with the tenyear Treasury hitting four point seven percent .
• 2:24
  This makes things tricky for the Federal Reserve meeting this week .
• 2:28
  While most expect them to hold rates steady , the odds of a surprise rate hike have climbed to thirtyfive percent .
• 2:34
  We are also waiting on the rest of the Magnificent Seven .
• 2:37
  Microsoft and Meta report tomorrow , and Apple is sitting pretty with a five trillion dollar market cap because they have been much more careful with their AI spending .
• 2:47
  So , what should you do with your portfolio ?
• 2:50
  First , consider a defensive rotation .
• 2:54
  Look at highquality value names in the Consumer Staples Select Sector SPDR Fund , ticker XLP , or the Financial Select Sector , XLF .
• 3:04
  As we saw with CocaCola today , these companies can pass on costs to consumers and keep winning .
• 3:11
  Second , if you want to play the AI trend without the semiconductor volatility , look at the infrastructure .
• 3:18
  Companies like Vertiv Holdings , which handles liquid cooling , or NextEra Energy , which provides the power for data centers , are great examples of the ' bottleneck ' play .
• 3:28
  The physical buildout is happening regardless of software sales .
• 3:32
  Third , let's talk about those rising yields .
• 3:35
  With the tenyear at four point seven percent , longterm bonds are risky .
• 3:40
  Instead of the TLT , consider the Vanguard ShortTerm Bond ETF , ticker BSV .
• 3:47
  This lets you capture higher yields while protecting your principal from price drops .
• 3:52
  Finally , if you are looking to get back into tech , wait for the dust to settle .
• 3:56
  Keep an eye on the Invesco QQQ Trust , but maybe wait until after Microsoft and Amazon report their cloud growth this week .
• 4:04
  There is a lot of risk right now , so patience is your best friend .
• 4:08
  Thanks for tuning in to Spy Trader .
• 4:10
  I am Penny Wise , and I will see you in a few hours with more updates !