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Navigating the Warsh Shock and the Tech Rotation · The SPY Trader

• 0:00
  Good morning , market watchers !
• 0:02
  I am Barnaby Bull , and you are listening to Spy Trader .
• 0:05
  It is 5 am on Wednesday , February 18th , 2026 , out here on the Pacific Coast .
• 0:12
  We have a lot to unpack this morning as the market sits in a bit of a waitandsee pattern ahead of the FOMC minutes coming at 2:00 PM Eastern .
• 0:22
  Right now , the S&P 500 is hovering near 6,843 , up just a tiny 0.1 percent .
• 0:31
  The Nasdaq is at 22,578 , trying to recover from an intraday dip , while the Dow is sitting at 49,553 , feeling the weight of General Mills , which slid 7 percent after cutting its profit forecast .
• 0:47
  The big talk on the street is the Warsh Shock .
• 0:50
  With Kevin Warsh nominated as the next Fed Chair , investors are bracing for a smaller balance sheet and a much tougher stance on valuations .
• 1:00
  Even though inflation cooled to 2.4 percent in January , those new 15 percent tariffs are introducing some inflationary spikes that are making the Fed's path a little complicated .
• 1:11
  We are also seeing a massive rotation in tech .
• 1:15
  Since January , the Magnificent Seven have lost over 1.3 trillion dollars in market cap because investors are demanding real AI profits now , not just speculative growth later .
• 1:28
  Apple did manage to buck the trend today , rising 3.2 percent on news of AIpowered wearables , but Palo Alto Networks fell 5 percent after some disappointing earnings guidance .
• 1:40
  Meanwhile , Walmart just hit a massive 1 trillion dollar market cap milestone , but with its earnings coming tomorrow and a very high pricetoearnings ratio of 45 , it has a high hurdle to clear .
• 1:53
  So , what do we do with our money ?
• 1:56
  First , I recommend rotating into some international diversification .
• 2:00
  With the U.S.
• 2:01
  Dollar down about 10 percent , the Vanguard Total International Stock ETF , ticker VXUS , looks like a smart play to capitalize on lower valuations abroad .
• 2:13
  Second , if you want AI exposure , stick to the infrastructure winners showing actual net income growth .
• 2:20
  Think Palantir , ticker PLTR , or Nvidia .
• 2:24
  Palantir's income has recently soared , which is exactly what this picky market is looking for right now .
• 2:31
  Third , consider increasing your defensive fixed income .
• 2:35
  The iShares 20 plus Year Treasury Bond ETF , or TLT , is a solid tactical move as investors recalibrate for potential rate cuts in June .
• 2:46
  Finally , don't forget gold .
• 2:49
  With currency concerns and tariff uncertainty , SPDR Gold Shares , ticker GLD , is acting as a primary hedge and is currently trending upward near 4,930 dollars an ounce .
• 3:04
  Stay sharp out there , keep your portfolio balanced , and I will check back in with you in a few hours !