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The Fed Pivot: AI Surges and Energy Explodes · The SPY Trader

• 0:00
  Good morning , traders !
• 0:01
  Welcome back to Spy Trader .
• 0:04
  I'm your host , Barry Cashflow , and it's 6 am on Friday , October 24th , 2025 , Pacific time .
• 0:11
  We've got a lot to unpack after a highly active week dominated by earnings and a fresh Federal Reserve pivot .
• 0:17
  The market is showing resilience , with the S&P 500 up about 0.58% and the Nasdaq leading the charge , jumping nearly 1% .
• 0:27
  Let's dive into the headlines .
• 0:30
  First up , earnings are driving huge swings .
• 0:33
  On the positive side , the AI story continues to dominate .
• 0:37
  Intel , ticker INTC , surged over 8% after reporting strong earnings driven specifically by AI demand .
• 0:45
  Casino operator Las Vegas Sands , LVS , also cheered investors , soaring 12.4% on betterthanexpected revenue .
• 0:54
  Industrials are also showing strength , with Dow , DOW , climbing 13% after announcing costcutting measures .
• 1:02
  However , not everyone is celebrating .
• 1:04
  Tesla , TSLA , missed profit estimates by 37% , though the stock surprisingly closed up 2% on subsequent trading , suggesting investors are looking past the shortterm pain .
• 1:18
  Netflix and IBM also faced declines following their own disappointing reports .
• 1:24
  Geopolitically , the energy sector is on fire .
• 1:28
  New U.S.
• 1:28
  sanctions on Russian oil companies have caused crude oil futures to soar , making the Energy Select Sector ETF , XLE , the daily leader , up 1.31% .
• 1:40
  Now , let’s get into the analysis .
• 1:42
  The big story , which is giving growth stocks their momentum , is the Federal Reserve .
• 1:47
  They delivered their first interest rate cut , a 0.25% reduction , since December 2024 , signaling more cuts are possible due to a softening labor market .
• 1:59
  Remember , the economy only added a modest 22,000 jobs in August .
• 2:05
  This dovish pivot is fantastic news for growth valuations , especially in Technology , which is already the yeartodate leader , up 24.63% .
• 2:15
  The ' AI arms race ' mentioned by the CEO of Palantir remains the dominant investment theme .
• 2:21
  But there’s a catch : Inflation is still sticky , expected to hold around 3.1% , well above the Fed's 2% target .
• 2:31
  This persistent inflation is why the 10Year Treasury yield remains elevated near 4.01% .
• 2:38
  So while the Fed is cutting rates , we have to be cautious about longduration fixed income .
• 2:44
  So how do we trade this environment of resilient growth countered by sticky inflation and geopolitical catalysts ?
• 2:51
  I have three recommendations .
• 2:53
  First , maintain your core exposure to highconviction growth .
• 2:58
  A lowerrate environment supports these highduration assets , and the AI demand , exemplified by Intel’s recent surge , is real .
• 3:06
  I recommend maintaining exposure to the Invesco QQQ Trust , QQQ , or the Technology Select Sector Fund , XLK .
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  Second , capitalize on tactical momentum in cyclicals .
• 3:20
  The geopolitical events have supercharged the energy sector , and Industrials are benefiting from positive economic expectations .
• 3:29
  Tactically overweight the Energy Select Sector Fund , XLE , and the Industrial Select Sector Fund , XLI .
• 3:36
  Look specifically at companies like APA Corp or Dow , which are showing strength .
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  Finally , defensive positioning is crucial .
• 3:45
  Given sticky inflation and geopolitical risks , keep fixed income defensive .
• 3:50
  Avoid excessive duration risk ; stick to broader core products like the iShares Core U.S.
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  Aggregate Bond ETF , AGG .
• 3:59
  And as a hedge against both inflation and uncertainty , maintain exposure to real assets , specifically gold , via SPDR Gold Shares , GLD .
• 4:10
  That’s our plan for today .
• 4:12
  Stay disciplined , keep your eye on the data — or lack thereof , thanks to the government shutdown — and I’ll catch you next time here on Spy Trader !