Shutdown Lift: Tech Surge and AI Volatility

Fresh news and strategies for traders. SPY Trader episode #1423. Markets surged dramatically higher as the longest government shutdown on record finally neared resolution, fueling a riskon environment. The Nasdaq led the charge, with the Technology sector (XLK) exploding over 2.5% driven by robust Q3 earnings beats. We discuss the market bifurcation, SoftBank's massive Nvidia stake sale stirring AI valuation fears, and key trades: maintaining core growth exposure, buying AI chipmakers on volatility, and using high bond yields (4.11% on the 10Y) for defensive stability.

Episode Transcript

(00:00):
Welcome back to Spy Trader .
I'm your host , Chip Futures , and it's 5 am on Tuesday , November 11th , 2025 , Pacific time .
We've got a lot to cover this morning as the market exploded higher yesterday , driven by relief that the longest US government shutdown on record is finally nearing its end .

(00:20):
The tech sector is back on fire , but we need to figure out if this bounce has legs , especially with bond yields pushing higher .
In the news summary , the indexes had a fantastic Monday , fueled primarily by riskon sentiment after weeks of political gridlock .
The Nasdaq Composite led the charge with a huge 2.3% rally , pulling the SPDR S&P 500 ETF Trust , or SPY , up 1.5% .

(00:49):
The Dow Jones lagged , only gaining 0.8% , clearly showing this was a growthstock party .
This optimism , centered on a resolution to the 41day US government shutdown , simultaneously pushed the U.S.
10year Treasury yield higher , clocking in around 4.11% .

(01:12):
Looking at the deeper analysis , the market is completely bifurcated .
Information Technology , tracked by the Technology Select Sector SPDR Fund , XLK , was the strongest performer , up 2.55% .
This strength is underpinned by corporate fundamentals , as 82% of S&P 500 companies have beaten Q3 earnings estimates , led by the Technology sector's robust 22% earnings growth .

(01:42):
On the flip side , defensive sectors like Consumer Staples , tracked by XLP , were the worst performers , falling 0.37% , as capital rotated out of safety and into growth .
We are seeing incredible volatility in the AI trade .
Key hardware players like Micron Technology and Western Digital were among the top gainers , rebounding sharply .

(02:07):
However , we woke up to news that SoftBank Group sold its entire 5.8 billion stake in Nvidia , stirring concerns about AI valuations .
Meanwhile , individual stocks like Palantir Technologies , PLTR , gained 8.81% on strong momentum , while Ball , BALL , dropped 5.2% following the immediate stepdown of its CEO .

(02:33):
Now for the trades .
Our thesis remains cautiously optimistic .
The immediate political risk is gone , but underlying economic fragility remains , suggesting the rally will be narrow .
First , Maintain Core Growth Exposure .
Stick with instruments like the Invesco QQQ Trust or the Technology Select Sector SPDR Fund , XLK .

(02:56):
The superior earnings growth in tech is justifying the continued focus .
Second , Target AIFocused Semiconductors on any dips .
Despite SoftBank’s noise , the longterm secular trend of AIdriven hardware demand remains intact .
Use volatility in giants like Nvidia , or foundational players like Micron Technology , MU , as buying opportunities .

(03:21):
Third , Diversify with Fixed Income .
With the 10year yield now over 4.10% and the Fed cutting rates since September , fixed income is a strong defensive play .
Add stability using broad bond ETFs like the Vanguard Total Bond Market ETF , BND , to balance your concentrated equity portfolio .

(03:44):
Finally , avoid aggressively rotating into laggards like the Consumer Staples Select Sector SPDR Fund , XLP ; the current market momentum favors highquality growth .