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TugofWar Market: Tech Gains, Fed Waits · The SPY Trader

• 0:00
  Hello and welcome back to Spy Trader , your goto podcast for navigating the unpredictable waters of the stock market .
• 0:07
  I'm your host , Money Mike , and it's 12 pm on Wednesday , June 25th , 2025 , Pacific time .
• 0:15
  We've got a lot to unpack today as the market continues its dance between optimism and caution .
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  Let's dive right in .
• 0:23
  The U.S.
• 0:23
  stock market is showing a mixed performance today .
• 0:27
  The S&P 500 is recently down 0.1% , and the Dow Jones Industrial Average is down 0.4% , while the Nasdaq Composite has managed to gain 0.1% , backing off its earlier highs .
• 0:44
  This comes after two solid days of gains , largely fueled by some positive geopolitical news .
• 0:52
  Speaking of which , the ceasefire between Israel and Iran appears to be holding , which has certainly brought a calming effect to the markets and led to a noticeable tumble in oil prices .
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  This has eased some concerns about global crude flow disruptions .
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  On the Federal Reserve front , the FOMC maintained the federal funds rate target range at 4.25% to 4.5% at its June meeting , marking the fourth consecutive meeting without a change .
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  Federal Reserve Chair Jerome Powell , in his testimony today , reiterated that the central bank is not in a hurry to cut interest rates , stating they're waiting for more data on the impact of tariffs on the economy .
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  While some Fed officials have hinted at potential cuts as early as the next meeting in late July , the Fed's median projections still suggest only two 0.25% rate cuts in 2025 .
• 1:47
  Now , for some company specific news .
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  Tesla shares dropped over 4% today following reports of a fifth consecutive month of declining EU sales in May .
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  On the flip side , Super Micro Computer continued its strong run , rising more than 7% .
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  Nvidia jumped nearly 4% , leading S&P 500 advancers , and Advanced Micro Devices rose 3% .
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  Alphabet , Microsoft , and Apple also saw small gains .
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  Micron Technology is expected to release its quarterly results after market close today .
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  We're also hearing that FedEx shares are sliding due to what's being called ' tariff woes , ' and there are reports of Shell being in talks to acquire BP , which sent BP shares jumping .
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  So , what does all this mean for your portfolio ?
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  The current market environment is really a tugofwar .
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  On one side , we have the positive sentiment from geopolitical deescalation , which has been a major tailwind , reducing volatility and boosting investor confidence .
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  This stability allows the market to focus more on fundamentals .
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  On the other side , we have the Federal Reserve's cautious stance .
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  While some might want quicker rate cuts , the Fed's 'waitandsee ' approach is aimed at ensuring inflation truly comes down to their 2% target .
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  Powell's focus on the impact of tariffs on inflation is a key watchpoint , as prolonged higher prices due to trade policies could indeed constrain consumer spending .
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  Looking at the broader economy , inflation currently sits at 2.4% annually for the 12 months ending May 2025 , with core inflation at 2.8% .
• 3:35
  These numbers are still above the Fed's target , indicating persistent price pressures .
• 3:41
  The unemployment rate , however , held steady at 4.2% in May , a positive sign for the labor market , even if it's slightly higher than last year .
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  A steady job market is crucial for supporting consumer spending .
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  Our Gross Domestic Product data shows a mixed picture .
• 3:58
  While the U.S.
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  economy expanded by 2% yearoveryear in Q1 2025 , it actually contracted by 0.2% quarteroverquarter .
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  This was the first quarterly GDP contraction in three years , largely attributed to a surge in imports and weaker consumer spending .
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  However , forecasts , including the Atlanta Fed's realtime estimate , suggest a rebound to 3.4% growth in Q2 .
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  Sectorwise , we're seeing continued divergence .
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  Technology and utility stocks have shown strong gains recently , with AIrelated companies like Nvidia and Super Micro Computer really standing out .
• 4:41
  This highlights investor focus on growth and innovation .
• 4:44
  However , consumer discretionary , consumer staples , industrials , materials , real estate , and utilities were declining today .
• 4:53
  The energy and communication sectors have also been lagging on some recent trading days .
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  So , given these market dynamics , here are a few concrete recommendations .
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  First , maintain diversification but with a tilt towards growth and innovation .
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  Continue to hold positions in robust technology and growthoriented sectors , especially those benefiting from longterm trends like Artificial Intelligence and digital transformation .
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  These sectors have shown resilience .
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  Second , closely monitor inflation and all Fed commentary .
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  The pace and timing of potential interest rate cuts remain uncertain and will heavily influence market direction .
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  Keep an eye on upcoming inflation reports and the next FOMC meeting .
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  Third , evaluate consumerfacing and industrial stocks with caution .
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  These sectors are more directly impacted by consumer spending trends and potential economic slowdowns .
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  Look for companies with strong pricing power or those that might offer attractive valuations after corrections .
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  Fourth , consider quality and defensive plays .
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  Incorporate highquality companies with stable earnings , strong cash flows , and sustainable dividends into your portfolio .
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  Utilities and healthcare , while they've lagged recently , can provide stability during uncertain times .
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  Fifth , stay informed on geopolitical developments .
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  While the current ceasefire is a positive , geopolitical situations can change rapidly .
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  Continue to monitor international news for any renewed tensions that could impact energy prices or global supply chains .
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  And finally , reassess your portfolio allocations regularly .
• 6:41
  Given the dynamic market and economic conditions , periodically rebalance your portfolio to ensure it aligns with your risk tolerance and longterm financial goals .
• 6:51
  Market leadership can shift , and adjusting your allocations can help capture new opportunities and mitigate risks .
• 6:59
  In summary , the U.S.
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  stock market is showing resilience , particularly in tech , buoyed by this geopolitical calm .
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  However , a vigilant Fed , sticky inflation , and some signs of moderating economic activity warrant a selective and diversified investment approach .
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  That's all for today on Spy Trader .
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  I'm Money Mike , reminding you to stay sharp , stay informed , and happy trading !