September 18, 2025 • 11 mins
Fresh news and strategies for traders. SPY Trader episode #1369.
This episode breaks down the Federal Reserve's first interest rate cut of 2025, analyzing its impact on various sectors and the mixed market reaction. It covers macroeconomic factors, geopolitical risks affecting tech, and significant M&A activity. Concrete trading recommendations are provided for navigating this dynamic environment, focusing on diversification across growth, defensive, fixed income, and alternative assets.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hey there , Spy Traders !
Chart Charlie here , live and direct from the market floor .
It's 6 am on Thursday , September 18th , 2025 , Pacific time , and we've got a jampacked episode for you as we dive into a market that's buzzing with activity after the Fed's latest move .
Grab your coffee , because we're breaking down the news , dishing out the insights , and sharing some concrete trading recommendations to kickstart your day !
(00:26):
Alright , let's get straight into the headlines .
The big news dominating the financial world is the Federal Reserve's decision yesterday , September 17th , to cut its benchmark interest rate by 25 basis points , bringing the federal funds rate target range to 4% to 4.25% .
(00:48):
This is the first rate cut of 2025 , and it's certainly stirred things up .
Currently , U.S.
stock market futures are showing some solid gains , with the Dow , S&P 500 , and Nasdaq futures all hitting record highs in premarket trading .
This positive sentiment is riding high on those expectations of further easing .
(01:11):
However , yesterday wasn't entirely a party .
While the Dow Jones Industrial Average jumped over 400 points , closing up 0.6% to 46,018.32 and touching an intraday record , the S&P 500 actually slipped 0.1% to 6,600.35 , and the Nasdaq Composite fell 0.3% to 22,261.33 .
(01:41):
So , a bit of a mixed bag there .
On the macroeconomic front , the Fed cited a ' stalling labor market ' and ' slower economic growth ' as key reasons for their rate cut .
The August jobs report was pretty weak , with only 22,000 jobs added and the unemployment rate rising to 4.3% , its highest since late 2021 .
(02:05):
And get this , a preliminary revision for March indicated hiring was about 800,000 jobs lower than initially reported .
Inflation , measured by the Personal Consumption Expenditures , or PCE , is still forecast around 3% this year , above the Fed's 2% target , before declining to 2.6% in 2026 .
(02:28):
The good news ?
The U.S.
economy showed some resilience in Q2 2025 , expanding at an annualized 3.3% , rebounding from a 0.5% contraction in Q1 .
But the Fed's ' dot plot , ' showing only two more cuts this year and just one in 2026 , was a bit more conservative than some investors had hoped for , tempering the excitement slightly .
(02:54):
Now , let's peel back the layers and dive into what all this means for your portfolio .
We're in a fascinating market right now .
Traditionally , September is known as the ' September Effect , ' often a weak month for equities , with the S&P 500 averaging a negative return .
Yet , the S&P 500 has gained 2.17% so far this month , potentially defying that historical trend , which is pretty exciting .
(03:22):
The Federal Reserve’s rate cut means lower borrowing costs for consumers and businesses .
This generally stimulates spending and investment , which in turn boosts corporate earnings and the overall equity market .
It also makes bonds less attractive , encouraging funds to flow into stocks and other riskier assets like real estate .
(03:43):
Growthoriented sectors , like technology and consumer discretionary , usually thrive in such an environment .
But yesterday's market action showed some interesting divergences .
Defensive sectors and financials , like American Express ( AXP ) , performed well .
While the Financial Select Sector SPDR Fund ( XLF ) could be considered for stability , remember that lower rates can eventually squeeze net interest margins for banks , so it's a nuanced play .
(04:13):
Technology , usually a big winner from rate cuts , faced headwinds .
Nvidia ( NVDA ) stock fell 3.1% after reports that China's internet regulator instructed its biggest tech companies to stop buying AI chips from the company .
Fellow tech giant Broadcom ( AVGO ) also dropped 3.8% .
(04:35):
This highlights a major geopolitical risk for companies with significant international exposure , especially in hightech sectors .
Despite this , the longterm outlook for AIdriven innovation remains strong , fueling robust M&A in AIrelated targets .
In consumer discretionary , Uber Technologies ( UBER ) shares dropped 5% after Waymo announced a partnership with Lyft ( LYFT ) for autonomous rides , causing Lyft to surge over 13% .
(05:07):
This just goes to show how competitive dynamics and new tech can create wild swings within a sector .
Even real estate , which typically benefits from lower rates , showed weakness .
Home builder confidence is at its lowest since December 2022 , and companies like Builders FirstSource ( BLDR ) and Mohawk Industries ( MHK ) saw declines .
(05:31):
This tells us that sometimes , underlying market fundamentals can outweigh the immediate positive impact of rate cuts .
On the earnings front today , Darden Restaurants ( DRI ) , parent of Olive Garden , and FactSet Research Systems ( FDS ) reported before the open .
After market close , keep an eye on FedEx ( FDX ) and home builder Lennar ( LEN ) .
(05:55):
These reports will offer crucial insights into consumer health , business investment , logistics , and the housing market .
Also , Cracker Barrel Old Country Store ( CBRL ) stock fell 9% after warning about weak traffic , while digital asset firm Bullish reported strong Q2 2025 results .
(06:15):
And finally , M&A activity is heating up !
The global M&A market saw 78.84 billion in deals last week .
A big one was Anglo American's 20 billion acquisition of Teck Resources , creating a mining powerhouse .
Plus , Space Exploration Technologies Corp.
(06:35):
, or SpaceX , is acquiring AWS4 and Hblock spectrum licenses from EchoStar for 17 billion .
All of this indicates strategic consolidation and expansion across industries .
So , how do we navigate this dynamic landscape ?
The market is balancing the tailwinds of monetary easing with genuine concerns about economic slowdown and specific sector risks .
(07:00):
First off , embrace quality and growth with caution .
While rate cuts favor growth stocks , be selective .
Look for companies with strong fundamentals , clear competitive advantages , and manageable debt .
Geopolitical risks , like the ChinaNvidia situation , emphasize the need for diversified exposure .
Second , keep a close eye on macroeconomic data .
(07:23):
The Fed's future moves are heavily dependent on incoming labor market and inflation data .
Unexpected shifts here could change everything .
And finally , diversification is key .
Given the mixed signals and potential for volatility , broad market and diversified sector exposure is crucial .
Now for some concrete recommendations to consider (07:42):
For broad market exposure with a growth tilt , consider the Invesco QQQ Trust ( QQQ ) , which tracks the Nasdaq100 .
It's heavily focused on technology and growth , which typically benefits from a lowerrate environment .
While it dipped yesterday , QQQ futures are up today , showing renewed interest .
(08:05):
For broader S&P 500 exposure , the Vanguard S&P 500 ETF ( VOO ) or iShares CORE S&P 500 ETF ( IVV ) remain solid core holdings .
For strategic opportunities in specific growth sectors , like technology , the Technology Select Sector SPDR Fund ( XLK ) offers diversified access , but exercise caution with individual companies like Nvidia due to geopolitical risks .
(08:36):
While consumer discretionary could benefit from lower borrowing costs , be selective given the competitive dynamics we discussed with Uber and Lyft .
Given the economic uncertainties , maintaining some defensive positioning is smart .
The Health Care Select Sector SPDR Fund ( XLV ) offers exposure to resilient sectors like pharma and biotech , which tend to hold up better during economic slowdowns .
(09:03):
With the Fed cutting rates and signaling more to come , bond prices are likely to appreciate .
For stability and potential capital gains , consider fixedincome ETFs like the iShares Core U.S.
Aggregate Bond ETF ( AGG ) or the Vanguard Total Bond Market ETF ( BND ) , which offer broad exposure to investmentgrade U.S.
(09:27):
bonds .
For higher duration and potentially greater price appreciation if longterm yields fall further , the iShares 20 Year Treasury Bond ETF ( TLT ) could be an option , though it carries more interest rate risk .
And finally , for alternative asset diversification , the SPDR Gold Shares ( GLD ) can act as a hedge against inflation and uncertainty .
(09:52):
It has shown resilience and hit alltime highs recently .
The Vanguard Real Estate ETF ( VNQ ) , investing in REITs , could also benefit from lower interest rates reducing financing costs for real estate companies , but remember that home builder sentiment remains weak for now .
So , to recap our recommendations (10:11):
For broad market growth , look at QQQ , VOO , or IVV .
For sectorspecific plays , XLK for tech with caution , and consider XLF for financials while understanding potential margin pressures .
For stability , XLV in healthcare .
For fixed income , AGG or BND for broad exposure , or TLT for longterm treasuries .
(10:37):
And for alternative assets , GLD for gold or VNQ for real estate .
Remember , folks , always do your own due diligence and consider your individual risk tolerance and investment horizons .
The market remains sensitive to ongoing economic data and geopolitical developments .
That's all for this episode of Spy Trader with Chart Charlie .
(10:59):
Stay tuned for our next update , and happy trading !
Hey there , Spy Traders !
Chart Charlie here , live and direct from the market floor .
It's 6 am on Thursday , September 18th , 2025 , Pacific time , and we've got a jampacked episode for you as we dive into a market that's buzzing with activity after the Fed's latest move .
Grab your coffee , because we're breaking down the news , dishing out the insights , and sharing some concrete trading recommendations to kickstart your day !
(00:26):
Alright , let's get straight into the headlines .
The big news dominating the financial world is the Federal Reserve's decision yesterday , September 17th , to cut its benchmark interest rate by 25 basis points , bringing the federal funds rate target range to 4% to 4.25% .
(00:48):
This is the first rate cut of 2025 , and it's certainly stirred things up .
Currently , U.S.
stock market futures are showing some solid gains , with the Dow , S&P 500 , and Nasdaq futures all hitting record highs in premarket trading .
This positive sentiment is riding high on those expectations of further easing .
(01:11):
However , yesterday wasn't entirely a party .
While the Dow Jones Industrial Average jumped over 400 points , closing up 0.6% to 46,018.32 and touching an intraday record , the S&P 500 actually slipped 0.1% to 6,600.35 , and the Nasdaq Composite fell 0.3% to 22,261.33 .
(01:41):
So , a bit of a mixed bag there .
On the macroeconomic front , the Fed cited a ' stalling labor market ' and ' slower economic growth ' as key reasons for their rate cut .
The August jobs report was pretty weak , with only 22,000 jobs added and the unemployment rate rising to 4.3% , its highest since late 2021 .
(02:05):
And get this , a preliminary revision for March indicated hiring was about 800,000 jobs lower than initially reported .
Inflation , measured by the Personal Consumption Expenditures , or PCE , is still forecast around 3% this year , above the Fed's 2% target , before declining to 2.6% in 2026 .
(02:28):
The good news ?
The U.S.
economy showed some resilience in Q2 2025 , expanding at an annualized 3.3% , rebounding from a 0.5% contraction in Q1 .
But the Fed's ' dot plot , ' showing only two more cuts this year and just one in 2026 , was a bit more conservative than some investors had hoped for , tempering the excitement slightly .
(02:54):
Now , let's peel back the layers and dive into what all this means for your portfolio .
We're in a fascinating market right now .
Traditionally , September is known as the ' September Effect , ' often a weak month for equities , with the S&P 500 averaging a negative return .
Yet , the S&P 500 has gained 2.17% so far this month , potentially defying that historical trend , which is pretty exciting .
(03:22):
The Federal Reserve’s rate cut means lower borrowing costs for consumers and businesses .
This generally stimulates spending and investment , which in turn boosts corporate earnings and the overall equity market .
It also makes bonds less attractive , encouraging funds to flow into stocks and other riskier assets like real estate .
(03:43):
Growthoriented sectors , like technology and consumer discretionary , usually thrive in such an environment .
But yesterday's market action showed some interesting divergences .
Defensive sectors and financials , like American Express ( AXP ) , performed well .
While the Financial Select Sector SPDR Fund ( XLF ) could be considered for stability , remember that lower rates can eventually squeeze net interest margins for banks , so it's a nuanced play .
(04:13):
Technology , usually a big winner from rate cuts , faced headwinds .
Nvidia ( NVDA ) stock fell 3.1% after reports that China's internet regulator instructed its biggest tech companies to stop buying AI chips from the company .
Fellow tech giant Broadcom ( AVGO ) also dropped 3.8% .
(04:35):
This highlights a major geopolitical risk for companies with significant international exposure , especially in hightech sectors .
Despite this , the longterm outlook for AIdriven innovation remains strong , fueling robust M&A in AIrelated targets .
In consumer discretionary , Uber Technologies ( UBER ) shares dropped 5% after Waymo announced a partnership with Lyft ( LYFT ) for autonomous rides , causing Lyft to surge over 13% .
(05:07):
This just goes to show how competitive dynamics and new tech can create wild swings within a sector .
Even real estate , which typically benefits from lower rates , showed weakness .
Home builder confidence is at its lowest since December 2022 , and companies like Builders FirstSource ( BLDR ) and Mohawk Industries ( MHK ) saw declines .
(05:31):
This tells us that sometimes , underlying market fundamentals can outweigh the immediate positive impact of rate cuts .
On the earnings front today , Darden Restaurants ( DRI ) , parent of Olive Garden , and FactSet Research Systems ( FDS ) reported before the open .
After market close , keep an eye on FedEx ( FDX ) and home builder Lennar ( LEN ) .
(05:55):
These reports will offer crucial insights into consumer health , business investment , logistics , and the housing market .
Also , Cracker Barrel Old Country Store ( CBRL ) stock fell 9% after warning about weak traffic , while digital asset firm Bullish reported strong Q2 2025 results .
(06:15):
And finally , M&A activity is heating up !
The global M&A market saw 78.84 billion in deals last week .
A big one was Anglo American's 20 billion acquisition of Teck Resources , creating a mining powerhouse .
Plus , Space Exploration Technologies Corp.
(06:35):
, or SpaceX , is acquiring AWS4 and Hblock spectrum licenses from EchoStar for 17 billion .
All of this indicates strategic consolidation and expansion across industries .
So , how do we navigate this dynamic landscape ?
The market is balancing the tailwinds of monetary easing with genuine concerns about economic slowdown and specific sector risks .
(07:00):
First off , embrace quality and growth with caution .
While rate cuts favor growth stocks , be selective .
Look for companies with strong fundamentals , clear competitive advantages , and manageable debt .
Geopolitical risks , like the ChinaNvidia situation , emphasize the need for diversified exposure .
Second , keep a close eye on macroeconomic data .
(07:23):
The Fed's future moves are heavily dependent on incoming labor market and inflation data .
Unexpected shifts here could change everything .
And finally , diversification is key .
Given the mixed signals and potential for volatility , broad market and diversified sector exposure is crucial .
Now for some concrete recommendations to consider (07:42):
For broad market exposure with a growth tilt , consider the Invesco QQQ Trust ( QQQ ) , which tracks the Nasdaq100 .
It's heavily focused on technology and growth , which typically benefits from a lowerrate environment .
While it dipped yesterday , QQQ futures are up today , showing renewed interest .
(08:05):
For broader S&P 500 exposure , the Vanguard S&P 500 ETF ( VOO ) or iShares CORE S&P 500 ETF ( IVV ) remain solid core holdings .
For strategic opportunities in specific growth sectors , like technology , the Technology Select Sector SPDR Fund ( XLK ) offers diversified access , but exercise caution with individual companies like Nvidia due to geopolitical risks .
(08:36):
While consumer discretionary could benefit from lower borrowing costs , be selective given the competitive dynamics we discussed with Uber and Lyft .
Given the economic uncertainties , maintaining some defensive positioning is smart .
The Health Care Select Sector SPDR Fund ( XLV ) offers exposure to resilient sectors like pharma and biotech , which tend to hold up better during economic slowdowns .
(09:03):
With the Fed cutting rates and signaling more to come , bond prices are likely to appreciate .
For stability and potential capital gains , consider fixedincome ETFs like the iShares Core U.S.
Aggregate Bond ETF ( AGG ) or the Vanguard Total Bond Market ETF ( BND ) , which offer broad exposure to investmentgrade U.S.
(09:27):
bonds .
For higher duration and potentially greater price appreciation if longterm yields fall further , the iShares 20 Year Treasury Bond ETF ( TLT ) could be an option , though it carries more interest rate risk .
And finally , for alternative asset diversification , the SPDR Gold Shares ( GLD ) can act as a hedge against inflation and uncertainty .
(09:52):
It has shown resilience and hit alltime highs recently .
The Vanguard Real Estate ETF ( VNQ ) , investing in REITs , could also benefit from lower interest rates reducing financing costs for real estate companies , but remember that home builder sentiment remains weak for now .
So , to recap our recommendations (10:11):
For broad market growth , look at QQQ , VOO , or IVV .
For sectorspecific plays , XLK for tech with caution , and consider XLF for financials while understanding potential margin pressures .
For stability , XLV in healthcare .
For fixed income , AGG or BND for broad exposure , or TLT for longterm treasuries .
(10:37):
And for alternative assets , GLD for gold or VNQ for real estate .
Remember , folks , always do your own due diligence and consider your individual risk tolerance and investment horizons .
The market remains sensitive to ongoing economic data and geopolitical developments .
That's all for this episode of Spy Trader with Chart Charlie .
(10:59):
Stay tuned for our next update , and happy trading !
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