Episode Details

Fresh news and strategies for traders. SPY Trader episode #1247. Hello, Spy Traders! I'm Money Mike, and it's 12 pm on Wednesday, June 18th, 2025, Pacific time. We're diving into the market action, and it's looking like a cautious day with some interesting shifts after yesterday's dip.The U.S. stock market is showing a mixed to slightly positive vibe today. As of midday, the S&P 500 is up about 0.4%, the Dow Jones Industrial Average has gained around 198 points, and the Nasdaq Composite is up 0.5%. This follows a tougher day yesterday, June 17th, where the S&P 500 closed down 0.8% and the Dow dropped 1.8%, mainly due to those escalating geopolitical concerns in the Middle East.Over the past month, the US500 index has climbed 0.65%, and it's up a solid 9.67% compared to this time last year. The Dow Jones Industrial Average has also seen a healthy 9.47% increase year over year.Now, let's talk sectors. Yesterday, Energy was the only one in the green, while Healthcare and Consumer Discretionary, including names like Tesla, really struggled. But today, we're seeing a shift! Energy is still strong, but Technology and Financials are leading the charge, with bigcap tech making a rebound. Steel stocks are also getting a boost from tariffs. On the flip side, Retailing, Hardware Technology, and Software are among the weaker performers today, and Consumer Discretionary is still feeling the pressure.On the news front, the IsraelIran conflict continues to be a major headache, adding volatility and initially spiking oil prices. We've heard reports of U.S. military assets moving to the Middle East and comments from President Trump hinting at potential U.S. military intervention, which definitely put pressure on stocks yesterday.A huge event today is the Federal Open Market Committee, or FOMC, policy update and press conference. The Federal Reserve is widely expected to keep interest rates steady at 4.25% to 4.50% for the fourth meeting in a row. They're waiting to see how these 'Trump tariffs' play out before considering any rate changes. Everyone's got their eyes glued to the Fed's 'dot plot' and Chairman Powell's remarks for clues on future rate cuts, with some analysts guessing we might see two quarterpoint cuts in the second half of 2025, possibly starting in September. There's also chatter about U.S. bank regulators reviewing adjustments to the eSLR, which could lower capital requirements for big banks and improve their ability to operate in markets like Treasuries.From a macroeconomic perspective, inflation eased to 2.3% in April 2025 but then ticked up slightly to 2.4% in May, still below forecasts. Core inflation has held steady at 2.8%. Despite tariffs, inflation hasn't surged yet, though the Fed remains cautious. The U.S. economy actually contracted by 0.2% in the first quarter of 2025, the first decline in three years, partly due to businesses stockpiling goods ahead of tariffs. But there's an expectation of a sharp rebound in GDP for Q2. And the job market? Nonfarm payrolls increased by 139,000 in May, and the unemployment rate stayed at 4.2%. It's cooling a bit but still pretty stable.On the company side, while there weren't major specific drivers beyond sector movements, we know Tesla contributed to yesterday's Consumer Discretionary weakness. Today, JPMorgan and Goldman Sachs are helping the Dow climb, showing strength in financials. And Gap Inc. recently invested $58 million in robotics for its distribution center, creating 100 new jobs.The market right now is like a highstakes poker game, with geopolitical tensions adding a wild card and the Fed playing a very patient hand. The Middle East conflict is definitely driving some of this volatility, pushing people towards safer assets and boosting oil prices.The Fed's decision to hold rates steady is exactly what we expected. They're trying to figure out the full impact of President Trump's policies, especially those tariffs, and how the economy is really shaping up. That slight b