Risk On: How the Fed Pivot Changes Everything

Fresh news and strategies for traders. SPY Trader episode #1439. The S&P 500 and Nasdaq are surging toward alltime highs, fueled by spectacular tech earnings, particularly in AI (Nvidia, Alphabet/Gemini 3), and an 85% market expectation for a December Fed rate cut. This pivot to accommodative policy is boosting growth stocks and ratesensitive sectors. The episode provides a twopronged strategy: maintaining core tech exposure (QQQ, GOOGL) and rotating into beneficiaries of lower rates, specifically Real Estate (VNQ) and Utilities (XLU), while hedging with bonds (BND).

Episode Transcript

(00:00):
Welcome back to Spy Trader .
I'm your host , Barry Bullish , and it's 5 am on Thursday , November 27th , 2025 , here in Pacific time .
We are kicking off a very busy market morning following a truly spectacular rally that has pushed major indices towards alltime highs .
The prevailing sentiment is definitely riskon , and we need to break down where the money is flowing .

(00:23):
First , the headlines .
The US stock market is currently in a powerful uptrend .
The S&P 500 closed higher on Wednesday , marking its fourth consecutive daily gain .
The Nasdaq Composite is leading the charge , posting an approximately 4.2% weekly advance , reflecting strong performance in technology .

This rally is powered by two core factors (00:46):
resilient corporate earnings , especially in tech , and an anticipated shift in Federal Reserve policy .
Markets are currently pricing in an 85% probability of a 25basispoint rate cut at the December policy meeting .
This expected pivot to accommodative monetary policy is boosting growth stock valuations .

(01:12):
Let's look at the specifics driving the market .
The AI buildout remains the core thesis .
Nvidia posted strong quarterly earnings and guidance , easing any valuation fears and reaffirming the strength of the spending cycle .
Alphabet is also flying high , hitting a new alltime high following the unveiling of its advanced Gemini 3 AI model .

(01:35):
This boom isn't just for the giants .
Dell Technologies , an AI server maker , surged after providing a consensusbeating revenue forecast , reinforcing the broad demand for hardware .
However , the market is quick to punish any perceived weakness in the AI space .
Salesforce was a major decliner after a price target cut from Citi , citing limited commercialization of its key ' Agentforce ' AI product .

(02:04):
Separately , Robinhood soared approximately 11% on news of its launch of a new futures and derivatives exchange , showing markets reward strategic moves into highgrowth financial products .
The rally is broadening beyond just tech .
Utilities , which historically benefit from falling interest rates because of their heavy debt loads , saw strong daily gains , suggesting investors are rotating into sectors that benefit most from a lower cost of capital .

(02:34):
Meanwhile , the Fed's Beige Book indicated that overall consumer spending has slowed , though higherend retail remains resilient , hinting at a twotiered economy .
Now for the trading recommendations .
Given the market momentum and the high probability of Fed rate cuts , we recommend a twopronged strategy .

(02:55):
First , maintain core exposure to highgrowth tech using instruments like the Invesco QQQ Trust ETF ( QQQ ) or directly through stocks like Alphabet ( GOOGL ) , which benefits from the Gemini 3 momentum and a strong cloud platform .
Second , capitalize on the pivot play by targeting ratesensitive sectors that suffered during the highrate environment .

(03:19):
Look at the Vanguard Real Estate ETF ( VNQ ) , as REITs are highly sensitive to lower financing costs .
We also favor the Utilities Select Sector SPDR Fund ( UTIL or XLU ) , which benefits greatly from reduced debt service costs in a falling rate environment .
Finally , for stability , remember that as rates fall , bond prices rise .

(03:45):
A broad bond fund like the Vanguard Total Bond Market ETF ( BND ) provides excellent diversified exposure and a hedge against volatility .
That’s all for today’s Spy Trader .
Trade safely , everyone , and we'll catch you on the next episode .