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Tech Surge vs. Policy Shock: Navigating Bumpy Futures · The SPY Trader

• 0:00
  Welcome back to Spy Trader .
• 0:02
  I'm your host , Barry Bullish , waking up early so you don't have to .
• 0:06
  It's 5 am on Monday , January 12th , 2026 , Pacific time .
• 0:12
  The US market ended last week on a euphoric high , with the S&P 500 closing near 6,966.28 and the Nasdaq Composite surging 0.81% .
• 0:26
  But buckle up , because futures are pointing lower this morning as we digest a mix of heavy political risk and the start of earnings season .
• 0:34
  We're riding a strong uptrend , but the road ahead is immediately bumpy .
• 0:39
  Looking at the recent action , growth sectors drove the gains .
• 0:43
  Information Technology , tracked by XLK , was strong , up 1.32% .
• 0:50
  But the actual top daily performer was Materials , or XLB , surging 1.62% , signaling optimism around industrial activity .
• 1:01
  We saw major moves in specific stocks , notably Intel , which rocketed 10.80% higher on AI optimism and positive attention from the President regarding its handheld gaming platform chips .
• 1:16
  In contrast , sectors under regulatory pressure , like Financials , lagged , dropping 0.31% ahead of big bank earnings .
• 1:25
  The macroeconomic picture is causing headaches .
• 1:28
  December's mixed jobs report — fewer new jobs than expected but a surprising drop in the unemployment rate to 4.4%—has sharply lowered the odds of a January rate cut .
• 1:40
  This immediately sent the 10year Treasury yield up to about 4.2% .
• 1:46
  Adding gasoline to the fire , we have immediate political concerns : U.S.
• 1:51
  futures fell sharply over the weekend following news of a Department of Justice investigation into Federal Reserve Chair Jerome Powell's testimony , raising serious concerns about the Fed's independence .
• 2:04
  Plus , this is the week we finally kick off Q4 earnings season with JPMorgan Chase , Bank of America , and Wells Fargo reporting .
• 2:14
  These reports face extra scrutiny due to regulatory comments about a potential oneyear cap on credit card interest rates .
• 2:22
  So , how do we trade this blend of record highs , geopolitical anxiety , and earnings uncertainty ?
• 2:29
  First , the secular trend in AI and Tech dominance remains the primary driver .
• 2:35
  If you're betting on continued growth , you need exposure here .
• 2:39
  My recommendation is to overweight instruments like the Invesco QQQ Trust , QQQ , for concentrated tech exposure , or hold onto individual winners like Intel , even after its massive spike .
• 2:54
  Second , given the jump in the 10year yield and persistent inflation concerns ahead of the December CPI report , we need a hedge .
• 3:04
  Macroeconomic hedging means maintaining core fixed income exposure , such as the Vanguard Total Bond Market ETF , BND , to act as a ballast against equity volatility .
• 3:16
  On the equity side , keep a moderate position in the defensive Health Care Select Sector SPDR Fund , XLV.Third , look tactically at cyclical winners benefiting from recent policy .
• 3:30
  Homebuilders like Lennar and D.R.
• 3:32
  Horton saw gains after President Trump mentioned a plan to purchase 200 billion in mortgage bonds .
• 3:39
  Tactical exposure to the Materials Select Sector SPDR Fund , XLB , also makes sense , given its leading daily performance , suggesting strength in industrial commodities .
• 3:51
  The bottom line , traders : we are pivoting from a strong rally into an uncertain policy and earnings week .
• 3:59
  Stay balanced , keep your stops tight , and focus on defensive growth .
• 4:03
  Good luck out there , and I’ll catch you next time on Spy Trader .