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Transcript

Market Tightrope: AI Boom vs. Trade War Winds · The SPY Trader

• 0:00
  Hello there and welcome back to the Spy Trader podcast .
• 0:03
  I am your host , Penny Profit , and I am so glad you could join me for our midday market checkin .
• 0:09
  It is currently 2:30 pm on Wednesday , August 26th , 2026 , here in the Pacific time zone .
• 0:17
  We have a lot of moving parts to discuss today , so let us get right into the heart of the action .
• 0:23
  The U.S.
• 0:23
  stock market is currently in what we like to call a state of highstakes drifting .
• 0:28
  Investors are essentially walking a tightrope , trying to balance some truly incredible corporate earnings against some pretty stiff macroeconomic headwinds .
• 0:38
  As of right now , the major indices are showing a mixed and somewhat quiet session .
• 0:44
  The S&P 500 , which we track through the SPY , closed at 7,675.70 .
• 0:52
  That is a tiny drop of about 0.02 percent , but it is important to remember that we are still up over 12 percent for the year .
• 1:01
  Over on the tech side , the Nasdaq Composite , or the QQQ , finished down about 21 points at 26,130.20 .
• 1:11
  Even with a lateday boost from some highprofile tech earnings , those trade concerns are weighing heavy .
• 1:18
  And the Dow Jones Industrial Average ended the day lower by about 113 points , landing at 53,463.88 .
• 1:28
  This was mostly because our industrial and automotive companies are feeling the heat from new trade tensions .
• 1:35
  Speaking of heat , let us talk about the big news items .
• 1:39
  First , we had the July inflation update .
• 1:43
  The PCE Price Index came in at 3.7 percent , which was a little higher than what the consensus forecast suggested .
• 1:51
  This has sparked a mini inflation scare across the floor .
• 1:54
  To make matters more interesting , we have a deepening trade war with our neighbors to the north .
• 2:00
  After President Trump put 50 percent tariffs on Canadian goods , Canadian Prime Minister Mark Carney announced retaliatory dollarfordollar tariffs starting September 8th .
• 2:12
  This is putting immense pressure on companies like General Motors , Ford , and J.B.
• 2:17
  Hunt .
• 2:18
  Now , for some analysis .
• 2:20
  The star of the show today was undoubtedly Nvidia .
• 2:23
  They reported a massive beat with revenue reaching 96.2 billion dollars .
• 2:29
  That is up 106 percent yearoveryear , driven by their massive data center business .
• 2:34
  CEO Jensen Huang declared that AI has reached a profitable inflection point , and the numbers certainly back him up .
• 2:42
  CrowdStrike also reported record results today , showing that businesses are still spending big on cybersecurity and AI infrastructure .
• 2:51
  However , it is not all sunshine .
• 2:54
  Telus gave income investors a real shock today by cutting its dividend by 55 percent , which caused the stock to plunge 11 percent .
• 3:03
  On the other hand , Abercrombie and Fitch leaped over 31 percent today after crushing their earnings and raising their fullyear forecast .
• 3:12
  It shows that even with inflation , highend retail is showing some serious resilience .
• 3:18
  We also have to keep an eye on the Federal Reserve .
• 3:21
  Our new Chair , Kevin Warsh , has moved away from giving the market forward guidance .
• 3:27
  This lessismore approach is making people a bit nervous as we head into his keynote speech at the Jackson Hole Symposium tomorrow .
• 3:35
  Now , let us get into some trading recommendations to help you navigate this volatility .
• 3:41
  First , I am recommending that you overweight defensive growth , specifically in the Health Care sector .
• 3:47
  The Health Care Select Sector SPDR Fund , known as XLV , has been a real safe haven .
• 3:53
  It is up about 14 percent this year and has shown superior resilience .
• 3:58
  Within that fund , keep an eye on Eli Lilly , which continues to see massive demand for its metabolic and AIdriven drug discovery programs .
• 4:07
  Second , let us talk about tactical AI exposure .
• 4:12
  Even with the macro uncertainty , Nvidia’s earnings today confirm that the AI infrastructure buildout is the real deal .
• 4:20
  I suggest using the Invesco QQQ Trust or buying Nvidia stock directly , but do not jump in all at once .
• 4:27
  Use a dollarcost averaging strategy to buy in over time , especially since Chair Warsh’s next moves at the Fed are a bit of a mystery .
• 4:36
  Finally , you might want to look at inflation and trade war hedges .
• 4:40
  With gas prices over four dollars and inflation at 3.7 percent , gold and real estate are looking attractive .
• 4:48
  The SPDR Gold Shares , or GLD , usually does well during trade conflicts and periods of stagflationary concern .
• 4:56
  Also , the Vanguard Real Estate ETF , VNQ , is currently outperforming the broader S&P 500 with a nice 3.4 percent dividend yield .
• 5:07
  A couple of warnings before I go : be very careful with longterm bonds right now .
• 5:13
  The iShares 20plus Year Treasury Bond ETF , or TLT , is looking highly risky because of rising inflation data and Chair Warsh’s unpredictable communication style .
• 5:24
  Also , I would stay away from automakers like GM and Ford until we see some clarity on the 50 percent tariff threats between the U.S.
• 5:32
  and Canada .
• 5:33
  That is all for today’s update .
• 5:35
  Stay smart , stay patient , and I will see you back here in a few hours .
• 5:40
  This is Penny Profit for Spy Trader , signing off .