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Beyond the Magnificent Seven: The Great Market Rotation · The SPY Trader

• 0:00
  Good morning , market movers , and welcome to another episode of Spy Trader .
• 0:05
  It is 6 am on Saturday , August 1st , 2026 , here on the Pacific coast , and I am your host , Barnaby Butterscotch .
• 0:13
  I hope you have your favorite mug of cocoa ready because we have a lot to unpack after a truly wild week on Wall Street .
• 0:20
  July certainly went out with a bang , and if you felt like you were on a roller coaster , you weren't alone .
• 0:27
  We are seeing a massive shift in where investors are putting their money , moving away from the big tech giants we have all grown so fond of and into more defensive , steady sectors .
• 0:38
  Let's look at the numbers .
• 0:39
  The S&P 500 , which we track through the SPY ETF , managed a nice little 0.7 percent jump on Friday to close around 7,490 .
• 0:51
  That allowed it to finish July basically flat , but it was its first winning week in nearly a month .
• 0:57
  On the other hand , the techheavy Nasdaq , or the QQQ , had a bit of a rough time .
• 1:02
  Despite a 1 percent rally on Friday , it suffered a 6.6 percent loss for the month of July .
• 1:09
  That is its worst monthly performance since early 2026 .
• 1:13
  The big story here is the ' AI trade ' facing a reality check .
• 1:17
  While everyone has been excited about artificial intelligence , investors are now asking the tough question : show me the money .
• 1:26
  The Invesco S&P 500 Equal Weight ETF , known as RSP , actually outperformed the techheavy Nasdaq by over 7 percentage points this month .
• 1:36
  That tells us that while the big tech names are struggling , the rest of the market is actually doing okay .
• 1:42
  Speaking of tech , it was a tale of two cities this week .
• 1:46
  Amazon , ticker AMZN , was the star of the show , surging nearly 15 percent on Friday .
• 1:53
  They reported that their cloud business , AWS , grew by 37 percent — the fastest growth they have seen in four and a half years !
• 2:02
  On the flip side , Apple , AAPL , took a hit , sinking nearly 8 percent in premarket trading because they are worried supply constraints will slow down iPhone growth .
• 2:12
  And our friends in the chipmaking business had a tough month too .
• 2:16
  The Philadelphia Semiconductor Index had its worst month since 2008 , with Nvidia and AMD seeing doubledigit declines .
• 2:25
  While tech was cooling off , Financials and Healthcare were heating up .
• 2:29
  The Financial Select Sector SPDR , or XLF , hit an alltime high this week .
• 2:35
  We saw really strong results from JPMorgan Chase and Goldman Sachs as more companies are starting to merge and do deals again .
• 2:42
  Healthcare , tracked by XLV , also hit record highs with Eli Lilly leading the charge , though some analysts think that sector might be getting a little bit expensive now .
• 2:53
  We also can't ignore the Energy sector .
• 2:57
  With the conflict between the U.S.
• 2:58
  and Iran , oil prices have been jumping around like a pogo stick , spiking above 100 dollars a barrel before settling back down near 85 to 90 dollars .
• 3:09
  Now , let’s talk about the Federal Reserve .
• 3:12
  On July 29th , they decided to keep interest rates right where they are , between 3.5 and 3.75 percent .
• 3:20
  But it wasn't a unanimous decision ; three members actually wanted to raise rates .
• 3:26
  Fed Chair Kevin Warsh is staying very firm on his goal to get inflation down to 2 percent .
• 3:32
  This hawkish tone sent the 10year Treasury yield up to 4.73 percent , which is the highest we have seen since January .
• 3:40
  So , what does this mean for your piggy bank ?
• 3:43
  My recommendation right now is to focus on value and quality .
• 3:47
  I really like the Invesco S&P 500 Equal Weight ETF , RSP , as a core holding .
• 3:55
  It helps you avoid the risk of being too heavily invested in just those top ten tech giants .
• 4:01
  If you are looking for specific sectors , the Financials through XLF look like a good place to accumulate on dips , especially a powerhouse like JPMorgan .
• 4:11
  In the tech world , I’d be selective .
• 4:14
  Amazon has earned the right to spend on AI because they are showing real revenue from it .
• 4:20
  I would be a bit cautious with real estate right now ; the Vanguard Real Estate ETF , VNQ , is facing some headwinds from these high interest rates .
• 4:30
  Finally , keep an eye on the iShares 20 plus Year Treasury Bond ETF , TLT .
• 4:35
  Yields are very high right now , and if the economy cools off , we could see a big rally there .
• 4:41
  The main takeaway is that the ' Magnificent Seven ' aren't all moving together anymore .
• 4:46
  We have winners like Amazon and some laggards like Nvidia and Apple .
• 4:51
  Stay diversified , stay friendly , and I will see you back here in a few hours for the next update .
• 4:58
  This is Barnaby Butterscotch , signing off for Spy Trader !