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The Great AI Reality Check: Healthcare and SmallCap Pivot · The SPY Trader

• 0:00
  Good afternoon , market watchers !
• 0:02
  Welcome back to another episode of Spy Trader , your favorite checkin for everything moving the markets .
• 0:08
  I am your host , Sunny SideUp , and I am so glad you could join me today .
• 0:12
  It is currently 2:30 pm on Friday , June 26th , 2026 , here in the Pacific time zone , and we have quite a bit to unpack as the closing bell approaches .
• 0:23
  It has been a bit of a bumpy ride this week , so let’s get right into the heart of the action .
• 0:29
  We are seeing a significant shift in the market today .
• 0:32
  For the first time in a while , investors are moving away from the AI mania that dominated the start of the year .
• 0:39
  The S&P 500 , which we track via the SPY , is hovering around 7,354.02 , down just a tiny bit , but it is capping off a rare losing week for the index .
• 0:53
  The real story is in the techheavy Nasdaq , or the QQQ , which slipped 0.24% today and is actually down 5% for the week .
• 1:03
  It seems the market is finally questioning those skyhigh AI valuations .
• 1:08
  Interestingly , the little guys are having a moment !
• 1:12
  The Russell 2000 , that’s the IWM , actually rose today to 3,010.08 .
• 1:19
  This happened on a recordbreaking Russell Reconstitution day with over 334 billion dollars in trading volume !
• 1:27
  In terms of sectors , Healthcare was the absolute MVP .
• 1:31
  The XLV sector really stood out , led by Eli Lilly , ticker LLY , which surged over 7% after some very positive recommendations for new treatments in Europe .
• 1:42
  On the flip side , the technology sector , XLK , is under a lot of pressure .
• 1:49
  Semiconductors are leading the decline ; SanDisk plunged 10% and Micron , ticker MU , fell 7% .
• 1:56
  It is a bit of a reality check for the AI trade .
• 1:59
  Even in energy , we saw the XLE slip slightly as oil prices eased to 72 dollars and 60 cents , which was actually good news for fuelsensitive companies like United Airlines , or UAL , which saw a nice 1.3% bump .
• 2:15
  Now , why is this happening ?
• 2:18
  Well , we have a ' higher for longer' interest rate environment under our new Fed Chair , Kevin Warsh .
• 2:24
  The Fed held rates steady at 3.50% to 3.75% last week , but with inflation sitting at 4.2%—well above that 2% target — the experts are bracing for more hikes before the year ends .
• 2:38
  This sticky inflation is making the 10Year Treasury yield move around , though it settled a bit today at 4.38% as folks looked for safety .
• 2:48
  We also heard that OpenAI might delay its IPO until 2027 , which definitely dampened the mood for AI fans .
• 2:56
  Plus , there is new government interest in Quantum computing , which might help domestic tech companies in the long run .
• 3:03
  So , what is the game plan for your portfolio ?
• 3:06
  Given the cooling AI sentiment , I recommend a defensive pivot .
• 3:10
  Look into the Health Care Select Sector SPDR Fund , or XLV , for some stability .
• 3:17
  Eli Lilly , LLY , remains a very strong core holding because of its dominance in the weight loss drug market .
• 3:24
  If you are worried about inflation , consider gold .
• 3:27
  The GLD ETF rose today as gold hit over 4,000 dollars !
• 3:32
  It is a classic safe haven .
• 3:34
  For income , the Vanguard Total Bond Market ETF , or BND , is a great way to capture some of those higher yields without too much drama .
• 3:44
  I also suggest a tactical move toward smallcaps .
• 3:48
  Instead of being heavily concentrated in the Nasdaq100 through the QQQ , you might want to look at the Vanguard Total Stock Market ETF , or VTI .
• 3:58
  This gives you exposure to those mid and smallcap sectors that are holding up much better right now .
• 4:04
  Finally , be very careful with semiconductors .
• 4:07
  I would avoid adding to big tech positions like XLK or individual stocks like Micron , MU , until we see where the floor is for these valuations .
• 4:18
  That is all for this edition of Spy Trader !
• 4:20
  I'm Sunny SideUp , and I hope you have a wonderful , relaxing weekend .
• 4:25
  Keep an eye on those charts and I will talk to you soon !