Sep 16, 2026 · 23 min
Fed hike exposes widening weakness beneath resilient AI stocks
Blue Chips Hit After Fed Hikes Rates, AI Stocks Firm; SMTC, LITE, DXCM In Focus
The episode shows how a volatile rate decision weakened indexes and market breadth while select AI infrastructure and health care stocks held up.
- 1The Nasdaq reversed on heavier volume, while the S&P 500 slipped below its 50-day moving average after the Fed decision.
- 2Weakness in the equal-weight S&P 500 and blue-chip stocks signaled deteriorating breadth beneath the headline indexes.
- 3Semtech, Lumentum and Dexcom showed relative strength as AI infrastructure and health care attracted money in a fragile market.
Don't miss
Semtech, Lumentum and Dexcom hold up as the broader market weakens, revealing where leadership remains concentrated.
The brief
Alissa Coram and Ken Shreve open with the market’s volatile response to the Federal Reserve’s first rate hike in several years, framing the tension between broad selling and isolated leadership.
The Nasdaq reversed on increased volume, while the S&P 500 fell below its 50-day moving average; the hosts identify 7,500 as an important prior breakout area and potential support.
The Dow and blue-chip stocks weakened further, with financials such as Goldman Sachs under pressure, while the equal-weight S&P 500 undercut recent lows and confirmed deteriorating breadth.
Semtech and Lumentum offered a counterpoint: both showed relative strength in AI infrastructure, with Lumentum rebounding from its 50-day moving average on higher volume.
Dexcom closed the discussion as a health care leader finding support at its 50-day line, illustrating how money is rotating toward diabetes and other health care stocks.
What was said on this episode
13 statements · 7 positive · 5 negative · 1 neutral
AI stocks generally performed well during the market selloff.
“AI stocks generally turned in decent sessions.”
Listen at 4:06
Inflation may take considerable time to return to 2%.
“it could take a while for inflation to get back down to 2%.”
Listen at 6:17
The Federal Reserve will likely raise rates again before year-end.
“we're probably more than likely going to get another rate hike before the end of the year.”
Listen at 6:37
A 10-year Treasury yield above 5% is unfavorable for markets.
“10-year yield back above 5%, not a great sign for the market”
Listen at 7:10
The S&P 500's 7,500 level currently provides meaningful support.
“this is a pretty good support level.”
Listen at 8:46
A further S&P 500 break below its low could trigger additional selling.
“if it undercuts tomorrow, that could unleash another downdraft for the S&P.”
Listen at 8:57
Semtech currently has exceptionally strong fundamentals.
“the fundamentals are extraordinary at Semtech.”
Listen at 14:36
Semtech has a market capitalization of approximately $14 billion.
“It's a $14 billion market cap company, so it's a mid-cap.”
Listen at 15:45
Lumentum is showing strong relative performance in its industry.
“Lumentum is showing a lot of relative strength”
Listen at 19:02
Semtech and Lumentum are exceptionally strong within the technology sector.
“I think Semtech and Lumentum are showing exceptional strength in the tech sector here.”
Listen at 19:18
Semtech and Lumentum are risky purchases in the current market.
“I think there are risky buys here”
Listen at 19:25
Healthcare stocks such as Dexcom tend to outperform during defensive markets.
“healthcare names like Dexcom tend to do well when the market gets defensive here.”
Listen at 20:43
Investors should consider examining Dexcom.
“I think it's one worth checking out, Dexcom.”
Listen at 22:05
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.