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Market Chill: Navigating Inflation and the AI Reality Check · The SPY Trader

• 0:00
  Hello everyone and welcome back to the Spy Trader podcast !
• 0:04
  I am your host , Sunny SideUp , and I am so glad you could join me today for your afternoon market update .
• 0:11
  It is currently 2:30 pm on Tuesday , May 12th , 2026 , here on the Pacific coast .
• 0:18
  If you have been checking your retirement accounts today , you might have noticed the mood on Wall Street has shifted a bit .
• 0:25
  After we spent the early part of the week celebrating record highs , the market is taking what we call a riskoff day , pulling back as investors process some heavy news .
• 0:36
  Right now , the S&P 500 , which we track through the SPY and VOO ETFs , is down between pointsix and one percent , trading right around the 7,400 level .
• 0:49
  The real drama is in the techheavy Nasdaq , or the QQQ , which has been hit the hardest , dropping as much as two percent in intraday trading .
• 0:58
  Meanwhile , our friends over at the Dow Jones Industrial Average , the DIA , are holding up much better , down only slightly thanks to some strong energy and industrial stocks .
• 1:09
  So , what is causing this sudden change in weather ?
• 1:13
  It really boils down to two things : inflation and geopolitical tensions .
• 1:19
  We got the April Consumer Price Index report today , and unfortunately , it was a bit hotter than anyone wanted .
• 1:26
  Inflation accelerated to 3.8 percent , which is quite a jump away from the Federal Reserves two percent goal .
• 1:33
  To add to the uncertainty , Jerome Powell is finishing his term at the Fed in just three days , on May 15th .
• 1:40
  With Kevin Warsh expected to take over , the market is bracing for a higherforlonger interest rate environment .
• 1:48
  We are even seeing some traders bet on a rate hike later this year if inflation does not cool down .
• 1:54
  On top of that , tensions in the Middle East have caused oil prices to spike .
• 1:59
  WTI Crude is now sitting above 101 dollars a barrel .
• 2:04
  Now , looking at our sectors , the big story is the split between tech and energy .
• 2:09
  The AI enthusiasm is facing a reality check today .
• 2:14
  Over in South Korea , the Kospi index tumbled over two percent on fears that the government might redistribute AI profits .
• 2:22
  That sentiment crossed the ocean and hit companies like Intel , which dropped nearly ten percent today .
• 2:29
  Micron also saw a sharp selloff of about eight to ten percent as people locked in profits after its massive run this year .
• 2:36
  Everyone is now looking ahead to May 20th when NVIDIA reports its earnings .
• 2:42
  Analysts are still hopeful about their new GB300 chips , but for today , even NVDA is feeling the pressure .
• 2:50
  It is not all gloomy , though !
• 2:52
  The energy sector , tracked by the XLE ETF , is the big winner today .
• 2:57
  High oil prices are a huge tailwind for giants like ExxonMobil and Chevron .
• 3:02
  We also saw Venture Global report record exports today .
• 3:06
  Healthcare is also acting as a safe harbor .
• 3:10
  Eli Lilly , or LLY , surged four percent today on great clinical trial news , and Gilead rose over two percent .
• 3:18
  We also saw a massive jump from Zebra Technologies , which leaped nearly 17 percent after crushing its earnings .
• 3:25
  So , what should we do with this information ?
• 3:27
  I have four quick recommendations for you .
• 3:30
  First , if you want to hedge against this inflation , look at the Energy Select Sector SPDR Fund , known as XLE .
• 3:39
  As long as those Middle East tensions keep oil prices high , these cashheavy energy companies are a great place to be .
• 3:46
  Second , consider moving toward defensive growth in healthcare .
• 3:51
  The XLV ETF or Eli Lilly are good examples here because people need healthcare regardless of what inflation is doing .
• 3:59
  Third , for my tech fans , my advice is to wait for the dip .
• 4:04
  Do not chase the selloff just yet .
• 4:07
  Keep a close eye on the QQQ and wait for that NVIDIA earnings report on May 20th to see if it provides a new spark for the sector .
• 4:15
  Finally , for some stability , look into the Vanguard Dividend Appreciation ETF , or VIG .
• 4:21
  Boring is beautiful right now , and incomegenerating stocks are becoming the new market leaders during this volatility .
• 4:28
  That is all for this afternoon !
• 4:30
  Stay safe and stay invested .
• 4:32
  I am Sunny SideUp , and this has been Spy Trader .