Navigating a Tumbling Market

Fresh news and strategies for traders. SPY Trader episode #1189. Hey everyone, it's your pal Wally Wallstreet here, and welcome back to Spy Trader! It's 6 am on Saturday, May 24th, 2025, and the markets are still digesting a pretty wild week. Let's dive right into what's been happening and how you can navigate this crazy market. First up, the bad news: US stocks took a hit on Friday, thanks to, you guessed it, renewed trade tensions. President Trump is at it again, threatening tariffs on iPhones made outside the US and slapping potential tariffs on the European Union. This sent shivers down everyone's spines, with the S&P 500, Nasdaq, and Dow all taking a tumble. For the week, we're looking at a 2% drop for the S&P, 2.2% for the Dow, and about 1.6% off the Nasdaq. Ouch! Tech stocks were hit particularly hard, with names like Micron, Qualcomm, and Nvidia all down more than 1%. And to add fuel to the fire, Moody's decided to downgrade the U.S. government's credit rating, citing concerns about our growing debt. Not exactly the news we wanted to hear. On the slightly brighter side, firstquarter earnings season is wrapping up, and healthcare and communications stocks have been shining. Health care delivered a whopping 43% yearoveryear earnings growth, followed by communications at 29%. Most sectors are showing earnings growth, which is a positive sign. But here's where things get tricky. Rising bond yields are signaling potential concerns about the government's debt, and we're seeing some weakness in retail sales, with Target reporting slower sales and warning of a potential slowdown. This could mean consumers are tightening their belts, which isn't great for the overall economy. So, what's a savvy investor to do? First, diversification is your best friend right now. Don't put all your eggs in one basket. Keep a close eye on those trade developments, as they can really shake things up. Focus on companies with strong fundamentals, solid earnings, and healthy balance sheets. Think about defensive sectors like consumer staples and healthcare, which tend to hold up better when the economy gets wobbly. Be a little cautious with those highgrowth stocks, as they can be more sensitive to rising interest rates and economic uncertainty. And most importantly, keep a longterm perspective. Don't panic sell based on shortterm market swings. Rebalance your portfolio to maintain your desired asset allocation, and if you're feeling lost, don't hesitate to chat with a financial advisor. That's it for today's Spy Trader. Stay informed, stay diversified, and remember, don't let the market's ups and downs get you down. Until next time, this is Wally Wallstreet, signing off!