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The Great Sector Rotation: Navigating Tech Volatility and the New Fed Era · The SPY Trader

• 0:00
  Good morning and welcome back to Spy Trader .
• 0:03
  I am your host , Sunny Sideup , and it is 6 am on Saturday , July 25th , 2026 , here in the Pacific Time Zone .
• 0:12
  We are wrapping up a bit of a bumpy ride this week , so grab your coffee and let's dive into what just happened on Wall Street .
• 0:19
  It was a classic volatile losing week for the US stock market .
• 0:23
  We finished Friday with a bit of a mixed bag .
• 0:27
  The Dow Jones Industrial Average managed to gain half a percent to finish at 51,947 , and the S&P 500 stayed essentially flat , up just 0.05 percent .
• 0:40
  Meanwhile , the Nasdaq continued its slide , falling another 0.6 percent .
• 0:46
  When you look at the full week , the Nasdaq was the biggest loser , dropping over 2 percent as investors started pulling their chips off the table from those highpriced tech stocks .
• 0:57
  Speaking of tech , the XLK technology sector was the heavy weight dragging us down , falling over 2 percent on Friday alone .
• 1:06
  People are starting to get a little skeptical about when this massive AI spending is actually going to turn into profits .
• 1:13
  Tesla really felt that sting this week with a historic 14.5 percent drop after missing profit estimates by 38 percent .
• 1:23
  Even though they delivered a record number of cars , they are spending 25 billion dollars a year on AI , and for the first time in two years , their cash flow turned negative .
• 1:33
  On the flip side , Intel was a rare bright spot .
• 1:37
  They reported revenue growth of 25 percent , which is their fastest since 2011 , and their AIdriven revenue surged over 70 percent .
• 1:47
  This helped their stock rise 3 percent on Friday .
• 1:51
  We also saw Super Micro Computer shares soar 15 percent because they have a massive 60 billion dollar backlog of orders .
• 1:59
  It seems that while the big tech giants are spending , the hardware suppliers like SMCI are the ones seeing the cash right now .
• 2:07
  Outside of tech , we saw a rotation into safer spots .
• 2:11
  The Vanguard Real Estate ETF , or VNQ , rose over 2.2 percent as investors looked for yield .
• 2:18
  However , Healthcare is struggling .
• 2:21
  The XLV sector is under pressure because the Trump Administration announced a 100 percent tariff on imported generic drugs .
• 2:29
  This hit companies like Sandoz and Viatris pretty hard as the government moves to bring pharmaceutical production back to the US .
• 2:38
  Looking at the bigger picture , we are entering the Warsh era at the Federal Reserve .
• 2:43
  The new chair , Kevin Warsh , is signaling a no tolerance policy for inflation .
• 2:49
  This is making everyone a bit nervous ahead of the July 29th meeting .
• 2:54
  With crude oil sitting between 90 and 96 dollars a barrel due to conflict in the Middle East , inflation is still a very real concern .
• 3:02
  So , what is the game plan for your portfolio ?
• 3:05
  Based on the signals we are seeing , it is time to be cautious but opportunistic .
• 3:10
  First , I would look at Intel , ticker INTC , as a buy on pullbacks .
• 3:15
  Unlike other tech names , Intel is showing real margin recovery .
• 3:21
  Second , consider adding or holding the Vanguard Real Estate ETF , known as VNQ .
• 3:27
  As the market broadens out , people are looking for safety and yield outside of tech .
• 3:31
  Third , for Healthcare , keep a defensive hold on the XLV ETF .
• 3:36
  While generic makers are hurting , big USbased companies like Pfizer should benefit from these new trade policies .
• 3:43
  On the flip side , it might be time to reduce your exposure to the Invesco QQQ Trust .
• 3:49
  The Nasdaq is clearly in a consolidation phase .
• 3:53
  Finally , gold is looking like a necessary hedge right now .
• 3:57
  SPDR Gold Shares , or GLD , is a tactical buy as prices hit over 4,000 dollars an ounce amid geopolitical tensions .
• 4:06
  The main takeaway is to shift some capital away from highgrowth tech and toward quality value like financials or domestic healthcare .
• 4:14
  Keep a very close eye on that Fed meeting this coming Wednesday .
• 4:17
  Any hint of a rate hike could shake things up even more .
• 4:21
  That is all for this morning's update on Spy Trader .
• 4:25
  Enjoy your Saturday and I will see you back here in a few hours .