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The Great AI Valuation Reset · The SPY Trader

• 0:00
  Welcome to the Spy Trader podcast !
• 0:03
  I am your host , Sunny Sideup , and it is a pleasure to have you with us for this market update .
• 0:08
  It is 2:30 pm on Tuesday , June 23rd , 2026 , here in the Pacific .
• 0:15
  We are checking in as the markets are going through a bit of a tumble , especially in the world of technology .
• 0:21
  If you have been looking at your portfolio today , you might have noticed a lot of red , but do not panic just yet .
• 0:28
  We are seeing a significant riskoff session where the tech sector is parting ways with the rest of the market .
• 0:34
  The Nasdaq Composite is taking the biggest hit , down two point two one percent to around twentyfive thousand five hundred and eightyseven .
• 0:42
  The S&P 500 has dropped one point four four percent , sitting at about seven thousand three hundred and sixtyfive .
• 0:50
  However , it is not all gloom and doom .
• 0:54
  The Dow Jones Industrial Average is almost flat , down just zero point zero nine percent .
• 1:00
  This is because the Dow has a heavy tilt toward value and industrial stocks that are shielding it from the tech rout .
• 1:07
  While Information Technology , tracked by the XLK ETF , is the clear loser today , falling over four percent , defensive sectors like Healthcare , Utilities , and Consumer Staples are actually in the green .
• 1:20
  It seems investors are rotating out of growth and into more stable ground .
• 1:26
  The big story today is the global recalibration of the AI trade .
• 1:31
  Remember that recordbreaking SpaceX IPO back on June 12th ?
• 1:35
  Well , SpaceX , ticker SPCX , has become a market bellwether , but it has slid back from its peaks near two hundred and twentysix dollars down to the one hundred and fiftyfive to one hundred and fiftyeight dollar range .
• 1:51
  This happened after news of a massive unsecured bond offering to fund AI and Mars infrastructure , which raised concerns about huge spending without immediate returns .
• 2:02
  We are also seeing a semiconductor rout .
• 2:05
  The memory giant Micron , ticker MU , plummeted thirteen point two percent today .
• 2:11
  This followed a big ten percent crash in South Korea's Kospi index overnight .
• 2:17
  People are starting to wonder if the big hyperscalers like Microsoft and Meta can keep buying AI chips at this current pace .
• 2:25
  Even Alphabet , ticker GOOGL , took a hit because two highprofile AI researchers left the company , making people worry that the big tech AI moat is thinning .
• 2:36
  However , there are some resilient exceptions .
• 2:40
  IBM rose five percent after an upgrade from JPMorgan , and Walmart , ticker WMT , gained ground after securing a fifteenyear nuclear power deal with Constellation Energy to power its AIdriven logistics centers .
• 2:56
  Looking at the bigger picture , our new Fed Chair , Kevin Warsh , kept rates steady at three point five zero to three point seven five percent on June 17th .
• 3:07
  But the dot plot was hawkish , with nine officials now forecasting another rate hike by the end of the year to fight sticky inflation .
• 3:15
  Speaking of inflation , the CPI print for May came in at four point two percent , which was higher than expected due to energy shocks from the ongoing Iran conflict .
• 3:26
  This has pushed the tenyear Treasury yield to four point four eight percent , which is keeping a lot of pressure on highmultiple growth stocks .
• 3:34
  What we are seeing right now is a valuation reset .
• 3:38
  The market grew over twenty percent over the last year on AI optimism , and now investors are demanding proof of profitability .
• 3:46
  The Magnificent Seven , tracked by the MAGS ETF , has officially entered correction territory , down eleven percent from the May peak .
• 3:55
  This is not necessarily a bear market , but a healthy rotation where capital flows from overextended tech into underpriced value .
• 4:04
  So , what should we be doing in this environment ?
• 4:08
  For shortterm stability , look at the Healthcare Select Sector SPDR Fund , ticker XLV .
• 4:14
  It is outperforming because its earnings are not as sensitive to interest rates or AI spending cycles .
• 4:20
  A great example is Eli Lilly , ticker LLY , which continues to show strength due to its position in metabolic health , providing a great growthatareasonableprice alternative .
• 4:31
  For value with a touch of AI exposure , I like Walmart , ticker WMT .
• 4:38
  Their recent nuclear energy deal shows they are serious about using AI to cut costs , giving you the safety of a consumer staple with the upside of techled efficiency .
• 4:48
  If you have a longer horizon , say five years , today's selloff is a buy the dip opportunity for the backbone of the digital economy .
• 4:56
  Consider the Invesco QQQ Trust , ticker QQQ .
• 5:01
  While Nvidia and Micron are taking hits today , the underlying demand for computing is structural .
• 5:08
  Buying the QQQ allows you to capture the eventual rebound of these leaders at a ten to fifteen percent discount from last month .
• 5:15
  Finally , for fixed income diversification , consider the iShares twentyplus Year Treasury Bond ETF , ticker TLT .
• 5:24
  With the tenyear yield at four point four eight percent and the Fed hinting at a final hike , these bonds are becoming attractive as a hedge against a possible economic slowdown in late 2026 .
• 5:37
  My summary verdict is to stay neutral on tech in the immediate term , move toward being overweight in defensive and value stocks , and keep a buy list for highquality names like Microsoft , ticker MSFT , as they approach their two hundredday moving averages .
• 5:54
  Thanks for tuning in to Spy Trader , I am Sunny Sideup , and I will see you next time !