Apple’s Record Run, Rate Cut Hopes, and Today’s Market Balance

Fresh news and strategies for traders. SPY Trader episode #1402. The S&P 500 takes a breath after a 1% surge, with futures slightly down despite continued strong corporate earnings and Apple hitting a new record high. We analyze the market's increasingly dovish stance on interest rates, driven by concerns over a slowing labor market and AI displacement, despite tariffdriven inflation. Trading strategies focus on growth tech (QQQ), tactical plays in Financials (XLF), and hedging against geopolitical risk using Gold (GLD) and Treasuries (TLT).

Episode Transcript

(00:00):
Good morning and welcome back to Spy Trader .
I'm your host , Barry Cashflow , ready to break down what's moving the market before the opening bell .
It's 6 am on Tuesday , October 21st , 2025 , Pacific .
We are watching a market that is taking a necessary breath this morning after the S&P 500 surged over 1% yesterday .

(00:24):
Right now , futures are slightly down and mixed — S&P 500 futures are dipping about 0.13% , and the Nasdaq 100 is down 0.18% , signaling a pause after that big technologyled rally .
The broad market outlook remains one of cautious strength , driven by strong corporate earnings , but haunted by macro uncertainty .

(00:48):
In the news , technology remains the primary engine .
Apple , ticker AAPL , soared nearly 4% to a new record high yesterday .
This followed reports confirming that its new iPhone 17 series sales have surpassed the previous model in both the US and China .
That's a huge sign of consumer strength .

(01:09):
In corporate earnings , the beats keep coming .
CocaCola , KO , gained premarket after beating its organic sales estimates , and 3M Company , MMM , rose after raising its fullyear profit forecast .
This momentum is why the overall S&P 500 beat rate for Q3 is a stunning 87.2% .

(01:32):
However , there are pockets of weakness .
The Healthcare sector saw Exelixis , EXEL , fall after delivering mixed results from a phase 3 trial .
Let’s talk macro .
The market is increasingly dovish , meaning they anticipate an interest rate cut at the upcoming October Federal Open Market Committee meeting .

(01:53):
This is largely because Fed Chair Jerome Powell has focused attention on the slowing labor market , citing increased layoffs and , significantly , attributing some attrition to AI adoption displacing roles .
This job risk is outweighing current inflation worries , even though Core PCE is at 2.9%—inflation which the Fed largely attributes to tariffs , not broad pressure .

(02:19):
Geopolitical risks are still elevated .
We have USChina trade tensions where President Trump has threatened new 100% tariffs , though later positive remarks eased fears temporarily .
Also , the government shutdown delay has pushed the critical Consumer Price Index or CPI report to Friday , making that a major catalyst later this week .

(02:41):
Given this environment — strong earnings but high risk — we need a balanced trading plan .
First , favor technology and growth .
The AI structural tailwind is real , and the ' Magnificent 7 ' are expected to post impressive earnings growth of nearly 15% .
I recommend maintaining a core position in the Invesco QQQ Trust , QQQ , for broad tech exposure , or focusing on dips in highconviction names like Apple , given the strong iPhone 17 sales data .

(03:14):
Second , look tactically at the Financials .
The easing of credit concerns and optimism about the end of the government shutdown could make this sector undervalued .
Consider the Financial Select Sector SPDR Fund , XLF , capitalizing on the relief rally seen in banks like Wells Fargo .
Third , we must hedge against uncertainty .

(03:38):
Since tariffs are fueling core inflation and geopolitical tension remains high , we need protection .
I recommend SPDR Gold Shares , GLD , to hedge against both geopolitical risk and tariffdriven inflation .
Alternatively , the iShares 20 Year Treasury Bond ETF , TLT , could benefit if the labor market slows dramatically , forcing the Fed to cut rates more aggressively .

(04:04):
That’s all the time we have for this edition of Spy Trader .
Trade smart , stay nimble , and I’ll catch you on the next update .