Markets opened under pressure following a hotter-than-expected Producer Price Index (PPI) report, but an unexpected rally in small-cap stocks quickly changed the narrative. As money rotates out of crowded AI trades, could the Russell 2000 and emerging defense technology companies be positioned to benefit?

In today’s episode of Zero Hour Today, JT from Hidden Gems Stock Research breaks down the latest market volatility, shifting Federal Reserve expectations, and major developments across our small-cap defense and technology watchlist.

Topics Covered

📊 Market Volatility & Inflation

• Hot PPI data, Treasury yields, and shifting Fed rate expectations.

• Why $QQQ and AI-related stocks are struggling while $IWM and the Russell 2000 outperform.

• Capital rotation away from AI infrastructure and into other market sectors.

• The outlook for $SPY, gold, Bitcoin, and interest rates heading toward year-end.

🚀 Defense Tech & Small-Cap Stock Updates

• $LPTH – LightPath Technologies: A new $6.3 million follow-on optical assembly order brings awards from an unnamed counter-UAS customer to more than $19 million since July. Could Ondas Inc. be the customer? JT discusses the possibility and why LightPath’s germanium-free BlackDiamond technology could provide a competitive advantage.

• $TAKOF – Volatus Aerospace: Breaking down the company’s planned acquisition of AISPECO, its expansion into aerial intelligence and European defense markets, and JT’s long-term investment thesis, including his speculative $4 price target and dilution risks.

• $ONDS – Ondas Inc.: Counter-drone opportunities, defense acquisitions, international expansion, and the latest coverage from AUSA 2026.

• $RCAT – Red Cat Holdings: New insights from the Zero Hour Group’s AUSA coverage and why the company deserves another look.

• $RKLB – Rocket Lab: A sharp selloff following the reported delay of its Neutron rocket launch and potential longer-term opportunities.

Additional Discussion

JT also explores why persistent energy inflation could create an interesting setup for gold, how geopolitical tensions are affecting oil markets, and why disciplined research matters when investing in volatile emerging companies.

Coming Soon: More exclusive AUSA 2026 interviews, defense technology demonstrations, and company coverage from The Zero Hour Group, including footage featuring Ondas, Red Cat, Kopin, and other defense innovators.

Follow Our Research

🌐 The Zero Hour Group:

https://thezerohourgroup.com/

📈 Hidden Gems Stock Research:

Hidden Gems Stock Research

I find undervalued and unknown quality stocks before they make parabolic moves through deep equity research.

Disclosure

The information provided in this publication is for educational and informational purposes only. Nothing in this content should be interpreted as a recommendation, solicitation, or offer to buy or sell any security. I do not provide personalized investment advice or individualized recommendations. All examples, tickers, scenarios, and analyses are strictly for general educational discussion.

The views expressed are my own and do not represent the views, policies, or recommendations of any employer, broker-dealer, or affiliate. Any securities referenced are used solely as case studies to demonstrate research methods and analysis frameworks.

Investing involves risk, including the potential loss of principal. You are solely responsible for your own investment decisions. Consult a licensed financial professional for personalized guidance.

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The Bureau of Labor Statistics released the September CPI report this morning, and gasoline caused the largest selloff since July. Headline prices rose 0.6% on the month and 3.7% on the year, above the 3.6% consensus and up from 3.4% in August, per Fox Business. The gasoline index jumped 9.1% in one month and sits 34.2% higher than a year ago. The BLS said gasoline accounted for more than half of the September increase which is no surprise as The Strait of Hormuz continues to bleed the world’s oil supply.

CME FedWatch odds of a quarter-point hike at the October 27-28 Fed meeting climbed from 22.1% on Tuesday to 41.5% on Wednesday. Bloomberg’s read put the odds at 46%, according to Charles Schwab. The 2-year Treasury yield added more than 10 basis points to 4.89%, and the Nasdaq fell 1.4% in the first hour.

The Fed’s main tool works on demand and will prove to be less effective at solving this problem due to it being an international crisis. The inflation you feel at the pump comes from a supply shock: tanker attacks in the Strait of Hormuz and a refinery war between Russia and Ukraine. A rate hike can’t reopen a shipping lane or rebuild a Russian refinery, yet traders still have to price one, and that tension is starting to show cracks in the major indexes.

THE CPI REPORT: ENERGY IS DOING THE DAMAGE

The September report tells two stories, I will start with energy. The BLS energy index rose 5.2% in September and 20.4% over twelve months. Airline fares, which track jet fuel, rose 22.4% on the year. Electricity climbed 4.4% and piped utility gas rose 5.0%, per the US Inflation Calculator breakdown of the BLS data.

The second story worries the Fed more. Core CPI, which excludes food and energy, rose 0.3% for the second straight month and hit 2.6% on the year against a 2.5% forecast. Schwab’s Collin Martin noted that two straight 0.3% core prints push the three-month annualized rate to 3.4%. Core services rose about 0.4%, led by shelter, with recreation, education, airfares, and medical care also moving higher. Omair Sharif of Inflation Insights called the surprise “broad-based” in comments to Reuters via BNN Bloomberg.

Fuel costs leak into core prices through freight and airfares. Carson Group’s Sonu Varghese told Kiplinger that “we’ve yet to see the full impact of higher diesel prices and the AI boom.” Harris Financial Group’s Jamie Cox used five words: “Inflation is cooking with gas.”

CPI sat at 2.4% in January and February. The US and Israel struck Iran at the end of February, and inflation jumped to 3.3% in March, 3.8% in April, and 4.2% in May. A spring truce cooled it to 3.4% by July, and the second wave of the oil shock has pushed it back up since.

THE POWER BILL KEEPS CLIMBING

Gasoline grabs the headlines, but your power bill moves slower and sticks longer. The EIA’s October Short-Term Energy Outlook projects the average US residential electricity price at 18.2 cents per kilowatt-hour in 2026, up from 17.3 cents in 2025, with 18.7 cents penciled in for 2027, per the EIA. The agency expects wholesale power across the US to rise 11% this year.

The PJM grid serves more than 67 million people across 13 states and Washington, D.C., and it is taking the worst hit. The EIA expects PJM wholesale prices to rise 41% in 2026, the largest jump of any region it tracks, according to 24/7 Wall St. PJM’s market monitor named data center load growth as “the primary reason” for current capacity market conditions, and the EIA expects record US power use in 2026 and 2027.

Brent fell about $37 between mid-May and late June on truce headlines. Power prices tied to AI data centers and multi-year capacity auctions don’t reverse nearly as hard. That leaves the Fed a second inflation source its hikes can’t reach, and it hands utilities and power producers a demand runway that outlasts the war at the expense of the consumer.

THE OIL SHOCK: HORMUZ, HOUTHIS, AND A REFINERY WAR

Brent crude settled at $106.06 on October 14, up more than 70% for the year, per Rigzone. European refiners paid closer to $130 for Dated Brent cargoes as they scrambled for local supply.

The chart shows two waves. Brent ran from $72.87 to above $112 in March after the US and Israel struck Iran and tanker traffic through Hormuz froze. Iran reopened the strait during an April truce, per World Oil, and Brent bottomed near $72 in late June. The second wave started in July. Iranian forces stepped up attacks on Hormuz tankers, and a container ship sank in the waterway this week. Houthi rebels hit Saudi Aramco’s headquarters in Dhahran and fired on Riyadh’s main airport, according to Fox News, which counted 10 attacks on ships in a single week.

Diesel carries the heaviest load and is causing major problems across multiple industries due to the shortage. The national average hit a record $6.53 per gallon on September 22 and sat at $6.28 on October 8, up from $3.68 a year earlier, per RVtravel. Regular gasoline averaged $4.36, the first October on record with the national average above $4. The IEA warns that diesel shortages could last into 2027, after diesel refining margins hit a record near $95 a barrel in September.

Russia and Ukraine add a second front to the fuel war. Ukraine says it has knocked out about half of Russia’s refining capacity, and European diesel prices have more than doubled this year, according to Al Jazeera. President Trump answered with two moves last week. He struck a deal with Vladimir Putin to bring Russian diesel back to global markets, starting at 300,000 tonnes in October and scaling to 1 million tonnes in December, with sanctions on Russian oil products suspended until April 2027. Then he announced an “energy ceasefire” on Sunday, and Ukraine paused its refinery strikes monentarily.

Russia struck three days later. A missile and drone barrage before dawn Wednesday damaged at least 26 Ukrainian power facilities and left 600,000 people without electricity, per ABC News. Volodymyr Zelenskyy said Russia targeted infrastructure “covered by the ceasefire announced by the American President.” He had already called the diesel deal a gift to Putin, and the rift between Washington and European capitals keeps widening and puts further pressure on foreign policy and global energy stabilization.

The G7 agreed on October 2 to release 100 million barrels from strategic reserves. Energy analyst Kostis Stambolis told Al Jazeera the world still runs about 5 million barrels a day short of pre-war supply. At that pace, the release covers about 20 days of the gap. The Gulf has to reopen for the shortage to close or the Stock Market will continue to breakdown.

THE FED IS HIKING INTO A SUPPLY SHOCK

The Fed raised rates 25 basis points on September 16, its first hike since July 2023, in a 12-0 vote that lifted the target range to 3.75%-4.00%, per Euronews. The statement said inflation “remains elevated” and promised that “the Committee will deliver price stability.” Twelve of 18 officials projected one more hike before year-end, and four saw two.

Fed Chair Kevin Warsh set the tone at Jackson Hole in August, when he said he’d be “hard pressed to describe broad financial conditions as restrictive.” New York Fed President John Williams told Bloomberg this week that one more hike this year looks appropriate, with no need for another in 2027. JPMorgan Asset Management expects three hikes in this cycle, counting September’s, according to its 4Q 2026 asset allocation views.

Fed watchers split on October 28. Franklin Templeton’s Jeff Schulze told Kiplinger that September’s data falls short of what the Fed needs for back-to-back hikes, and that “the bond market has been doing some of the heavy lifting for the Fed.” PPHC’s Martin Beck pointed to weaker jobs data and fragile consumer sentiment as reasons the Fed can hold. Crewe Advisors’ Dustin Thackeray sees September as “a start rather than a final move.”

A hike won’t lower the price of a gallon of diesel. The Fed hikes to stop $6 diesel from turning into bigger wage demands and permanent price increases on menus and freight contracts, and core CPI’s 3.4% three-month pace gives the hawks their argument. A hike into a supply shock also squeezes consumers who already spend more on fuel and power. That raises the odds the Fed overtightens right as oil turns lower.

TREASURY YIELDS AT 5%: THE SILENT HARBINGER

I believe treasury yields carry more weight for stock valuations than any other financial data point. The 10-year Treasury yield touched 5.36% intraday on October 7, its highest level since 2002, per The Motley Fool via Yahoo Finance. Treasury Department data shows the 10-year closing at 5.21% on October 13, up from 4.24% in mid-January. Schwab had the 10-year back near 5.30% this morning after the CPI release.

Two forces push yields higher at once. The 2-year tracks Fed expectations, and it climbed from 3.38% at the end of February to 4.79% as traders priced a hiking cycle. The long end carries a second load. The 10-year term premium, the extra yield investors demand to hold long bonds, hit its highest level in more than a decade this month, according to Schwab. Goldman Sachs Asset Management expects long-end yields to stay elevated on loose fiscal policy and AI-related debt issuance, and it notes that hyperscalers have raised about $400 billion in investment-grade debt this year. GSAM’s 4Q 2026 Market Know-How wrote that “the era of central bank yield suppression appears to be firmly behind us.”

FactSet’s October 9 Earnings Insight puts the S&P 500 forward P/E at 19.1, equal to its 10-year average. Flip that P/E and you get a forward earnings yield of about 5.2%, the same as the 10-year Treasury. You collect almost no extra expected return for owning stocks over a government bond. JPMorgan Asset Management flagged a related pattern: once inflation runs above 3%, stocks, government bonds, and credit tend to sell off together.

Earnings give the bulls their counterweight. FactSet expects Q3 S&P 500 earnings to grow 29.6% year over year on 12.4% revenue growth, with energy at 121% and technology at 65%. Pair 30% earnings growth with a falling 10-year and stocks have room to rerate higher. A 10-year at 5.5% would compress multiples even with strong profits.

WHAT THE INSTITUTIONS ARE BUYING

Headlines show you what scared traders this week. Fund holdings show you what managers did about it. TraderMatrix diffs the daily holdings files of 145 active ETFs, covering 10,207 positions, so you see manager moves the day after they happen. A 13F filing shows the same move 45 days after quarter-end.

Source: TraderMatrix Hedge Fund Tracker.

The latest files, dated October 14, point to tech. The funds TraderMatrix tracks added a net 745.8 percentage points of weight to information technology, summed across funds. Communication services (+140.2) and consumer discretionary (+123.7) came next, ahead of financials (+109.7) and health care (+53.5). Materials and utilities gave up a sliver of weight. Six separate fund families bought Microsoft and six bought AMD, while five bought Apple and four each added Nvidia and Amazon.

Line that up against 2026 sector returns and two signals stand out. Managers kept adding to tech, the second-best sector of the year at +36.8%, and they bought consumer discretionary, the worst at -5.3%. The discretionary bet pays off if fuel prices and yields come down, the same setup behind the de-escalation path we map for paid subscribers below. Read the data with one caveat. Many of the tracked funds run covered-call and option-income strategies, so part of the weight shift reflects rebalancing and option rolls more than fresh conviction. Treat the flows as a map of where managers want exposure, and confirm with price. That being said, this could be a strategic buy after a record red day. They definitely have more data than the average retail investor.

If you want to run these screens yourself, from sector flow to unusual options activity, you can start with TraderMatrix here.

🔒 PAID SUBSCRIBER SECTION: THE MIDTERM PLAYBOOK, GOLD, BITCOIN, AND THE SECTORS WE WANT

Below the line: how the midterms could flip this market bullish, where gold and Bitcoin go from here, and the sectors we want on each of four paths. We caught $ONDS at $0.67 before it ran +2600%, $LPTH at $4 before it ran +440%, and $UMAC at $7 before it ran +340%. Subscribe so you don’t miss the next one.

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Every Tuesday we hunt for turning points. This week the scan flagged four strategic bottoms. A headline knocked each one down, and each now sits near the bottom of its yearly range with momentum pinned to the floor. The businesses behind them tell a better story than the price.

Before the new board, we grade last week’s.

LAST WEEK’S SCORECARD

We called four bottoms on October 6. All four moved higher after the call with a 100% directional hit rate. Three of the four reached a price target, and two cleared multilegged PTs in under a week. From the call to the high, the board averaged a 6.0% move. Lets take a look at last weeks trades in depth then move on to this weeks picks!

led the board. We flagged it at $30.70, two percent above the 8,127-contract put wall at $30. On October 8, two sessions later, it ran to $33.40. This created an 8.8% gain through both the $32 and $33 targets, and it came three weeks before the expected move to these levels around October 28th.

gave us the washout bounce we called. We flagged it at $134.29, one day after the RXO deal sent it lower. It climbed to $144.13 for a 7.3% gain, cleared the $140 first target and stalled 87 cents shy of $145.

was the top ranked set up of the week and did not disapoint, rocketing from the low $140’s into the low $150’s in a couple of days. We called it at $144.23, and it reached $152.22 on October 12. That’s a 5.5% gain through $145 and $150, with earnings still ahead on October 22.

$AXSM was the miss this week that started its reversal in the predicted direction but got cut short of the intended target before dropping lower. It bounced from $174.22 to $178.56, a 2.5% move, then fell short of the $180 target as sellers took it back down making it our sole loss of the week.

UNLOCK THIS WEEK’S BOARD

Last week’s board went four for four on direction, and three of the four hit our targets. This week’s four setups sit below the line: the floor, the trigger, the targets and the exit plan for each one. Paid subscribers get the full board every Tuesday, plus a scorecard that grades every call, wins and misses alike. If you want the institutional data for yourself, head over to Trader Matrix and use our link for a special offer!

We caught $ONDS at $0.67 before it ran +2600%, $LPTH at $4 before it ran +440%, and $UMAC at $7 before it ran +340%. Subscribe so you don’t miss the next one.

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THE PULSE

The S&P finished last week up 1.2% at 7,811.5, a hair under Tuesday’s record, while the Nasdaq lost 0.4% and the Russell 2000 dropped 1.4%. Thursday hurt most: an FT report put OpenAI’s annualized revenue about $20B below prior estimates, and , and, each fell more than 6%. Buyers reversed part of that Friday on reports of $70B+ in annualized revenue by year end. Sellers hit chips again today. The SOX traded down about 2.5% on worries about competition from China’s memory maker CXMT, and Broadcom CEO Hock Tan told investors some AI buyers are acting like casino gamblers who don’t know what they own. added pressure on the GPU trade when it unveiled Maia 300, its third in-house AI chip, and said Maia will now run most of its AI workloads, Copilot included. Microsoft hit a one-year high on the news.

Rates are staying pakred. Friday’s Treasury close left the 2Y up 3.5basis points at 4.79% and the 30Y flat at 5.60%, pricing more Fed tightening. Prediction markets put October hike odds near 17% after the payroll miss, with most of the money betting on December. Traders will reset those odds after Wednesday’s CPI. The dollar index hit its highest level since April 2025, and mortgage rates rose for a seventh straight week to 7.4%.

SECTOR ROTATION

Traders flipped last week’s chip trade. A week ago led the board at +4.18 vs SPY. Over the last five sessions it trailed SPY by 5.48 points, the worst on the board, and lagged by 1.68. Money moved into (+2.81), (+2.75), (+2.44) and (+2.44). It left , , (-1.57) and (-1.39).

Watch the split inside tech. Software jumped 2.8% on Friday while semis fell 0.65%, so buyers moved AI money from the chipmakers up to the software layer and kept it in tech. Last Monday we flagged the 3.2x options surge in utilities. XLU then led the week. With defensives and energy on top, buyers are hedging inside an index that sits near records.

Options traders came in leaning bullish. Pre-market, call premium of $1.2B beat puts 69/31, and Trader Matrix counted 8 of 11 sectors bullish. Intraday flow alerts showed bullish surges in Consumer Discretionary (XLY, $503.7M at 1.9x its 30-day average), Aerospace (ITA, $60.9M at 1.5x), Cybersecurity (CIBR, $20.8M at 1.9x, $11.4M bullish vs $2.0M bearish), Quantum (QTUM, 1.9x) and Lithium (LIT, 1.6x).

MACRO AND GEOPOLITICS

Over the weekend, Houthi strikes on Riyadh’s King Khalid airport left a double-digit death toll, Saudi Arabia extended the airport closure, and Trump said the U.S. may join Saudi Arabia in striking the Houthis. This afternoon the Saudi-led coalition intercepted another Houthi ballistic missile over Riyadh after AFP reporters heard explosions in the city. Haaretz reported Netanyahu is asking U.S. mediators to secure Saudi permission for Israeli strikes on Houthi targets, and BBC reported Iran offered to broker Saudi-Houthi talks.

Attacks in Hormuz kept coming. UKMTO reported an unknown projectile hit an outbound products tanker in the strait today, with the crew safe, and Iran said a third crude supertanker caught fire there. Tehran said it will answer the U.S. response on its Hormuz proposal once its review finishes. Sixty nations signed a declaration opposing tolls and restrictions on international straits, and 29 countries, the U.S. and U.K. included, condemned Iran’s sabotage and cyber activity after London tied the IRGC to the September 27 plot at RAF Fairford.

Russia pulled oil the other way. Zelensky said Russia hit six Ukrainian energy facilities today, while Trump said both sides agreed to stop hitting energy infrastructure and Russia will ship diesel immediately. The EIA estimates that diesel covers nine days of U.S. demand. Traders sold ICE gasoil 3% on the truce headline, then bid Brent above $107 this morning anyway. China said it will work with Russia to protect key shipping routes, and North Korea fired two ballistic missiles over the weekend.

Central banks around the world keep hiking. Fifteen of 33 major central banks have hiked in the last six months, India’s RBI raised rates on October 7 for the first time in nearly four years, and India’s 10Y hit a three-year high. Citi expects Treasury Secretary Bessent to shrink long-bond auctions and possibly cancel 20-year sales, which would take some supply pressure off the long end that drove last week’s selloff. Investors put a record $30.7B into gold ETFs in Q3.

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In June, this stock traded over $20. Today it closed under $8. Many investors will see a chart like that and assume the business broke, this couldn’t be further from the truth. Pull up the revenue line and you’ll see sales grew 70% in Q4 2025, 55% in Q1, and 62% in Q2. Orders hit $15.1 million last quarter, the most in company history, and management raised full-year guidance on the same call. Very competitive raises when you look at the company’s market cap.

The company builds AI computers for places a data center can’t go: Navy hulls, patrol aircraft, combat vehicles, and autonomous mining rigs. Since June, a Department of Defense intelligence program and a Missile Defense Agency contractor have both placed orders, and the Navy signed on as a new customer. One of those programs carries about $44 million of potential over four years. The whole company did $32.2 million in revenue last year.

You can buy the entire business for about $198 million. It holds $31.4 million in cash and zero debt, so you pay about 4x this year’s guided revenue. Buyers in June paid three times that multiple for a slower-growing version of the same company. Sellers reacted to a one-time legal charge, a margin dip, and a shelf filing. I think they skipped past the order book on the way out. Lets get into pick and why I’m buying now.

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LAST WEEK’S SCORECARD

We called three bottoms and one top on September 29 with a 75% win rate. All of the bottoms are working per the technicals with the reversal on still in the works. I’m watching for the $200 level to be a strong level of resistance with the potential for an equal high around $207.

Today’s Trade Set Ups

The broad market supports this week’s trade. $SPY at $779 and $QQQ at $760 both trade above the line where options dealers switch from selling into drops to buying them. Dealers buy dips in this environment, and stretched stocks like the picks below are likely to snap back when pushed low enough as long as fundamentals are strong.

UNLOCK THIS WEEK’S BOARD

Last week’s scan put three bottoms on the board, and all three are working. This week’s four setups sit below the line: the floor, the trigger, the targets and the exit plan for each one. Paid subscribers get the full board every Tuesday, plus a scorecard that grades every call, wins and misses alike. If you want the institutional data for yourself, head over to Trader Matrix and use our link for a special offer!

We caught $ONDS at $0.67 before it ran +2600%, $LPTH at $4 before it ran +440%, and $UMAC at $7 before it ran +340%. Subscribe so you don’t miss the next one.

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Tech buyers ignored the bond market today. The Nasdaq closed at a record 27,477, up 1.05%, while the 10Y pushed to 5.31%, a fresh 52-week high and its highest level since 2007. The S&P 500 rose 0.66% to 7,774, the Dow added 0.18% and the Russell 2000 gained 0.72%. Last Monday, FedWatch priced near 65% odds of an October hike. After Friday’s 29,000-job payroll miss, traders cut that to 22% and pushed the first hike to December.

THE PULSE

Wall Street spent today working off Friday’s jobs report. September payrolls came in at +29,000 against 84,000 expected, and unemployment ticked up to 4.2%. Institutions priced in a pause in rate moves and bought chips into Friday’s close, leaving the S&P under 1% from its August record.

Bond traders refused to follow. Today the 2Y slipped to 4.82% while the 10Y, 20Y and 30Y all set new 52-week highs, which steepened the 2s/10s spread to about 49 basis points. Last week the front end led the move on hike bets. This week the long end did the selling. Capital.com’s Daniela Hathorn pins that on heavy government borrowing and a higher term premium, with the Fed a smaller factor. Buyers bid growth stocks on softer Fed odds while the risk-free rate they price against kept climbing. If the 10Y keeps rising, you will find those valuations harder to defend.

ISM handed bond traders more to worry about. The services PMI printed 54.9 against 55.0 expected, and the prices index jumped to 74, its highest reading since July 2022. Respondents named fuel costs twice as often as any other issue. Services make up most of the economy, so traders will treat the October 14 CPI report as the next tangible test for hike odds, I am expecting rates to hold steady in October.

Bulls gained ground on the Trader Matrix gamma map. SPY started the day sitting on its gamma flip near 770 and closed at 774.83, above the flip and through the 772 call wall. Above the flip, dealers sell rallies and buy dips, which pins the tape. QQQ closed Friday a hair under its 750 flip, and buyers pushed it back above with today’s 0.87% Nasdaq-100 gain. The put walls sit at 760 for SPY and 740 for QQQ.

SECTOR ROTATION

Over the past five sessions, money went into SMH (+4.18 vs SPY), IGV (+2.50), XLK (+2.02) and XLE (+1.48). It came out of XLV (-2.43), XLF (-2.24), XLC (-2.12) and XLB (-1.67). SPY lost 0.22% on the week, so buyers hid a strong chip and software bid inside a flat index. ARKK lagged at -0.82, and you can see from that gap that buyers chased quality mega-cap tech and skipped speculative growth.

Options traders leaned bullish but split. Trader Matrix flow alerts showed bullish surges in Utilities (XLU, 3.2x its 30-day average), Energy (XLE, 2.9x), Photonics (EUV, 2.8x) and Financials (XLF, $175M in total flow). Traders put $800M into SMH options at 1.9x and split down the middle, $247M bullish against $233M bearish. They put the most money into XLY, $629M, with a bullish skew. Market-wide, traders bought $1.76B in calls against $1.85B in puts before the open.

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Traders reversed course on defense. Last week they bought bearish SHLD exposure, and today SHLD flow ran 1.8x average and 77% bullish. Our main stocks backed that up with a multitude of contract news to help their rallies. Traders did the same in utilities: XLU was the worst five-day sector last week, and today they hit it with the biggest surge on the board. If utilities run I see that helping a lot of the hardware and end system companies we track in this publication.

MACRO AND GEOPOLITICS

Iran kept Hormuz shut. Its parliament speaker said over the weekend that the strait will not reopen until Washington meets Iran’s war terms, and more tankers took hits in Gulf waters. The Houthis claimed a missile and drone strike on an Aramco site in Riyadh on October 3, and the Saudi-led coalition called the claims misleading. Tonight, Riyadh’s King Khalid International Airport halted incoming flights twice. Iran’s foreign minister Abbas Araghchi said there is no military solution to the conflict with the U.S. while warning Tehran stands ready to defend itself.

In Yemen, government forces launched an offensive on the Houthi-held capital of Sanaa and said they retook ground near the Bab al-Mandeb Strait. OPEC+ agreed in principle to hold November output targets. At a London forum, Aramco CEO Amin Nasser warned that global oil stockpiles have run thin and said refilling them could take two years after Hormuz reopens. Traders still sold Brent down 1.9% to $100.32 and held WTI near $90.50, pricing in no new supply loss from the weekend.

In Europe, French lawmakers stalled on a budget, and traders sold the euro to a 17-month low and dumped French bonds, pushing the French-German spread toward 2011 debt-crisis levels. In Brazil, Flavio Bolsonaro beat the polls in the first round of the presidential election, and currency traders bid the real up more than 4%. Russia reported a pneumonic plague death at a lab in Irkutsk, and local officials put close to 190 people under observation. Watch healthcare ETFs for a sudden surge if the problem escelates. Covid made many millionaires who played the mask and pharma angles.

For the full brief and specific trade set ups in the 30+ Stock HGR Watchlist become a premium member today! All Sector and Option Data is provided by Trader Matrix, try it here!

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The company in this piece carries a market cap near $255 million. Its stock has lost about 41% over the past year and recently closed less than half its 52-week high. Management kept growing the business while sellers pushed the stock down. Revenue in the June quarter came in almost six times higher than a year earlier, and management guides to more than four times last year’s revenue for all of 2026. Contract backlog rose 43% in three months. The company builds collaborative autonomy software that lets one soldier run a mixed team of drones from different manufacturers, and the Army has put that software into division-scale field exercises twice this year. In June, a foreign defense prime gave the company exclusive U.S. rights to build and sell a family of combat-proven loitering munitions to the Pentagon. The company also sells low-cost flight computers and a mini-bomber drone that costs under $1,000 per strike.

Most investors have skipped the CEO’s pay package. Last November the board granted him about 4.5 million performance units, and stockholders approved them in June. He collects nothing unless the stock holds $20 a share for 60 straight trading days. The award runs in ten equal tranches, from $20 up to $65 in $5 steps, and eight of the ten need $30 or more. His deadline is November 2030.

At $20 a share the company would be worth close to $1 billion, and at $65 more than $3 billion. The CEO bought more stock in the open market in September, near $5.80 a share.

We spoke with an expert anonymous source close to the company for this piece and were very impressed with what they had to say. They told us investors have overlooked the CEO’s award. We read the filings, and the terms tie his payout to yours tighter than the headline numbers suggest. Premium subscribers get the ticker and our levels below.

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We caught $ONDS at $0.67 before it ran +2600%, $LPTH at $4 before it ran +440%, and $UMAC at $7 before it ran +340%. Subscribe so you don’t miss the next one.

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JT, Benny, and Kate break down a wave of developments across the drone, defense, autonomy, and emerging-technology sectors, including Amprius Technologies receiving up to $75 million in government funding to expand domestic battery production for drones, Unusual Machines’ investment in Draganfly, and another multi-year agreement for Ondas subsidiary Cyberhawk. The discussion also dives into the growing importance of securing domestic supply chains for batteries, optics, germanium, and other critical components supporting autonomous systems.

Kate joins the show directly from the White House, providing real-time context surrounding the administration’s AI discussions and the launch of America.gov. The team examines the broader competition between the United States and China in artificial intelligence, how regulation could affect emerging companies, and why government policy, geopolitics, and technology are becoming increasingly interconnected for investors.

The conversation then shifts to the macro environment, including oil, inflation, interest rates, Treasury yields, gold, and the signals coming from the two-year and ten-year bond markets. The team discusses why energy prices and geopolitical developments remain critical variables for both the broader economy and equity markets.

Finally, The Zero Hour Group officially announces Exyn Technologies ($EXYN) as its newest covered company. Following an in-depth interview with interim CEO Ben Williams, the team introduces Exyn’s autonomous navigation and high-accuracy mapping technology designed to operate in GPS- and communications-denied environments. Originally developed out of the University of Pennsylvania’s GRASP Robotics Lab, Exyn’s technology is being applied to drones and ground robots across mining, infrastructure, geospatial mapping, and other environments where sending people can be dangerous or inefficient.

This episode captures exactly what Zero Hour Today was built for: breaking company news, emerging technology, macro analysis, geopolitical context, and deeper research into small and micro-cap companies before they reach the radar of much larger institutional investors.

Topics covered:
• $AMPX government funding and domestic drone-battery production
• $UMAC investment in Draganfly
• Ondas/Cyberhawk contract news
• U.S. drone and defense supply-chain localization
• Germanium, optics, batteries, and critical materials
• Oil, inflation, interest rates, gold, and Treasury yields
• AI policy and developments from the White House
• U.S.–China competition in artificial intelligence
• Retail investors versus institutional investors in small caps
• Introducing Exyn Technologies ($EXYN)
• Autonomous navigation in GPS-denied environments
• Upcoming Zero Hour Group CEO interviews and company coverage

The Zero Hour Group is By Retail Investors, For Retail Investors.

Nothing discussed in this program constitutes financial advice. The content is provided for educational and entertainment purposes only. Always conduct your own research and make your own investment decisions.

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THE PULSE

Futures opened the week lower last night after Trump rejected Iran’s peace proposal over the weekend. Brent pushed back above $106 in the morning and WTI traded near $96 before sellers took it back to $92.60 by the close. The 2Y led the move in yields, which is how traders price a hike: front end first. Gold fell 3.5% on the same repricing and the dollar sat near a two-month high.

Goldman flagged S&P breadth at its weakest level since the dot-com bubble. A handful of AI names are holding the index up while the rest of the market leaks. You saw it in the new-lows count today.

The gamma map from our partners at Trader Matrix frames the next few sessions. SPY closed Friday right on its gamma flip near 771 and opened below it this morning. Below the flip, dealers amplify moves, and the put wall sits near 761. QQQ sits in a tighter box between a put wall near 730 and a call wall near 745.

SECTOR ROTATION

Over the past five sessions, money went into $SMH (+4.59% vs SPY) and $XLK (+2.25%). It came out of $XLU (-5.14%), $XLE (-4.80%), $XLRE (-3.55%) and $XLF (-3.10%). Utilities and real estate trade like bonds, so a 5%+ 10Y punishes them first.

The options chain told a different story today. TM flow alerts showed bullish surges in Materials ($XLB, 22x its 30-day average), Consumer Staples ($XLP, 5.4x), Energy ($XLE, 4.2x) and Financials ($XLF, $139M in total flow). Traders bought bearish exposure in Cybersecurity ($CIBR, $10.7M bearish vs $3.3M bullish) and Defense ($SHLD). Software and Consumer Discretionary came in mixed.

The five-day chart leans offensive. Today’s flow says traders are hedging that offense with staples, materials and energy. Energy finished the week as the second-worst sector and just caught a fresh oil bid. If oil holds above $90, $XLE is the first laggard in line to turn.

MACRO AND GEOPOLITICS

Iran whipsawed oil all day. At 11:30 AM ET, a U.S. official said Trump would ease sanctions and unfreeze assets for nuclear progress, and crude sold off. At 12:18 PM, Saudi media reported Iran agreed to halt enrichment. By 3:25 PM, Iranian state media called that report false, and an Iranian security official said Hormuz, not the nuclear file, now sits at the center of talks. Bloomberg reported Iranian officials doubt a deal lands before the November 3 midterms.

Saudi Arabia restarted exports on its East-West pipeline, which routes crude around Hormuz. CENTCOM rejected Iran’s claim that it controls the strait. NBC reported eight Marines were wounded on September 14 when an Iranian cruise missile hit their ship in the strait.

The U.S. and China agreed to cut tariffs on $30B of goods each after the Trump-Xi summit. Trump announced an $18B steel plant in Iowa and said the White House is still weighing a diesel export ban, with diesel at $6.53 a gallon. In Europe, Russia struck Kyiv’s National Academy of Sciences and a Russian drone came down near the Polish border.

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Benny and I were joined by Lorenzo “Art” for a deeper discussion around the defense and intelligence ecosystem, including Ondas, BlackSky, Palantir, Rocket Lab, border security, geospatial intelligence, and the growing overlap between commercial technology and national defense.

We also spent plenty of time on the charts.

JT’s Trade Setups

$RKLB — Rocket Lab

This is one of my favorite setups heading into the week. Rocket Lab has started forming a potentially bullish structure after establishing a higher low near the $60 area.

At the time of the stream, shares were around $73.50, with the 200-day moving average sitting near $81.

That gives me two levels to watch:

• Current area around $73–$74 for continued momentum

• A convincing break above roughly $81 with strong volume as the bigger confirmation signal

I think there could still be upside before another period of consolidation, particularly if high-beta space and defense names begin participating in a broader post-midterm move.

$BKSY — BlackSky

BlackSky was one of the more interesting names discussed throughout the stream.

From a technical standpoint, I have been watching roughly $16.50–$19.50 as a potential accumulation/buy zone. The stock has been working through a major pullback, but its upcoming earnings cycle, improving technical positioning, and exposure to geospatial intelligence make it one I want on the watchlist.

I’m also interested in watching the unusual options flow heading toward its next earnings report to see whether larger traders begin positioning ahead of the event.

$BMNR — BitMine Immersion Technologies

For crypto exposure, BMNR remains one of the equities I’m watching rather than trying to trade crypto directly.

With shares around $27 during the discussion, my preferred entry area would be approximately $22–$25.

The extremely attractive entry around $15 has already passed, in my opinion, but a pullback into the low-to-mid $20s could provide another opportunity.

My broader thesis is that BMNR can behave almost like leveraged Ethereum exposure if crypto gets another major move. I’m especially watching the period following the midterms, while also watching fintech names such as Robinhood for confirmation of broader risk appetite.

$RCAT — Red Cat

Red Cat has been beaten down significantly, but technically it is beginning to reach an area that interests me.

Shares were trading in the mid-$6 range, approaching previous lows established in the high-$5s.

Rather than immediately buying common stock, one strategy I discussed was potentially using cash-secured puts around these depressed levels to either collect premium or establish a lower cost basis for a starter position.

The technical setup is improving, although I still have questions surrounding manufacturing scale, sales growth, and Red Cat’s ability to support materially larger orders.

$LPTH — LightPath Technologies

LightPath remains one of the setups where I have some of my strongest conviction.

The $9.35 area has repeatedly acted as an important technical level, and I had been highlighting the opportunity when shares were trading around or below that zone.

My longer-term price target discussed on the stream remains approximately $20–$21.

Between the chart, the company’s technology, and the defense-related use cases we continue following, LPTH remains firmly on my radar.

Bigger Picture

We also discussed why I believe the current macro environment has kept many high-beta defense, drone, software, and space stocks pinned despite improving individual company fundamentals.

Midterms, rates, inflation, geopolitical uncertainty, and broader risk sentiment remain major variables.

My expectation is that the period from late October through November and December could become increasingly important as some of that uncertainty begins clearing from the market.

That doesn’t mean blindly buying everything.

The goal remains the same: identify the companies we actually understand, find attractive technical levels, define the setup before entering the trade, and wait for the market to give us the opportunity.

This episode goes deep into the charts, macro picture, defense-tech ecosystem, and several names we’re watching closely heading into the final stretch of 2026.

Not financial advice. This content is for educational and entertainment purposes only. Always conduct your own research and determine what level of risk is appropriate for you.

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Rather than simply replaying the interview, we pause throughout to analyze Eric’s answers, challenge certain assumptions, and connect his comments to the broader Ondas thesis we’ve been building at Hidden Gems Stock Research.

One of the biggest themes is the disconnect between the recent weakness in drone-sector stocks and the underlying demand environment. Eric argues that Ondas can’t control macro conditions or sector multiples, but it can control execution - growing its pipeline, backlog, revenue, technology portfolio, and operating platform.

We also dig into:

• Why the current drone and defense spending cycle may still be in its early innings

• How military restocking could evolve into a much larger buildout of new unmanned infrastructure

• Ondas’ strategy of becoming a full-stack autonomous systems platform rather than a single-product drone company

• The importance of counter-UAS, persistent ISR, strike systems, ground robotics, and integrated software

• Why Eric prefers the term “dual purpose” rather than simply “dual use”

• The commercial opportunity across critical infrastructure, public safety, industrial inspection, and homeland security

• How Cyberhawk fits into the company’s broader commercial strategy

• Whether Ondas can successfully integrate its growing portfolio of acquisitions

• Why balance-sheet strength and manufacturing capacity could become increasingly important as defense orders scale

• What we’ll be watching next as The Zero Hour Group heads to AUSA and gets another opportunity to speak directly with Eric Brock

One of the most important takeaways from the conversation is that the opportunity may extend far beyond battlefield drones. Eric describes a much broader market involving critical-infrastructure protection, civilian counter-drone systems, industrial inspection, ISR, autonomous ground systems, and the operating infrastructure required to deploy these technologies at scale.

We also discuss why the next phase of the unmanned-systems market may be less about “restocking” existing technology and more about building an entirely new defense and security infrastructure from the ground up.

If you follow $ONDS, defense technology, autonomous systems, counter-UAS, or the broader drone sector, this is a deep-dive reaction focused on separating the short-term market noise from the long-term business strategy.

Disclaimer: This content is for educational and entertainment purposes only and should not be considered financial advice. Always conduct your own research and make investment decisions based on your individual financial situation and risk tolerance.

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Kate joins the show with a macro and geopolitical breakdown centered on the U.S.–China summit, including the potential implications for trade, rare earth minerals, AI and AI safety, energy markets, Iran, Russia and Ukraine, and what it could all mean for $SPY and $QQQ.

From there, JT and Benny turn to one of the biggest themes in defense tech: the Drone Dominance Gauntlet. The team breaks down the latest competition results, which companies are standing out, and why manufacturing capacity, domestic supply chains, components, and the ability to scale could ultimately be just as important as winning the competition itself.

We also premiere The Zero Hour Group’s exclusive interview with Lantronix CEO Salil Raje. He discusses $LTRX’s rapidly growing drone business, its work with more than 30 customers, American manufacturing, NDAA/TAA compliance, and the company’s role in providing the edge compute and onboard intelligence necessary for autonomous drones operating in GPS-denied and contested environments.

The conversation then shifts to $KOPN and Fabric AI, where JT and Benny dig into new intellectual property surrounding optical GPU interconnects and the potential role photonics could play in the next generation of AI data centers. The discussion covers power consumption, heat, bandwidth, chip-agnostic connectivity, and the upcoming hardware demonstration the companies are targeting for early 2027.

In this episode:

• U.S.–China summit and market implications
• AI safety, trade, rare earths, oil and global geopolitics
• $SPY and $QQQ macro outlook
• Drone Dominance Gauntlet results
• Domestic drone manufacturing and supply-chain opportunities
• Exclusive $LTRX CEO interview
• Edge computing and autonomous drones
• $UMAC and the defense-tech “picks and shovels” strategy
• $KOPN + Fabric AI optical interconnect technology
• AI data centers, photonics and next-generation GPU infrastructure
• A preview of upcoming Zero Hour Group coverage

Zero Hour Today brings together market analysis, firsthand industry access, company interviews, and emerging technology research with one goal: giving retail investors access to conversations and information that are usually happening behind closed doors.

Subscribe and follow The Zero Hour Group for more interviews, company deep dives, defense-tech coverage, market analysis, and Sunday Night Live.

Disclaimer: This content is for educational and entertainment purposes only and should not be considered financial advice. Always conduct your own research and make investment decisions based on your individual financial situation and risk tolerance.

#ZeroHourGroup #ZeroHourToday #LTRX #KOPN #DroneStocks #DefenseTech #ArtificialIntelligence #AIStocks #Drones #StockMarket #SPY #QQQ

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The headline story is Ondas Inc.’s acquisition of three defense technology businesses for approximately $56 million, with additional performance-based earnouts potentially reaching $32 million through 2028. Benny and JT dig into what each acquisition brings to the growing Ondas defense stack and why the capabilities could matter in contested environments.

They take a closer look at technologies including passive acoustic drone detection, AI-enabled autonomy, one-to-many unmanned system control, resilient communications, and GPS/GNSS-denied navigation. The discussion centers on how these capabilities could complement Ondas’ existing counter-UAS, autonomous systems, and command-and-control technologies as the company continues building out a more complete defense ecosystem.
The guys also discuss PowerUs ($PUSA) and its developing commercial and defense drone business, including its heavy-lift drone technology and roughly $60 million five-year sales target tied to agricultural applications in New Zealand. They examine potential applications ranging from agriculture and firefighting to logistics and defense before taking a look at the early PUSA chart and some of the technical levels JT is watching.

Plus, Benny and JT cover the morning market action, with SPY, the Nasdaq, and small caps pulling back after the recent rally, while several defense and drone names continue showing relative strength.

They wrap up with a preview of upcoming Zero Hour Group coverage, AUSA, two new companies currently under research, and the expansion of Zero Hour Today to Tuesday, Wednesday, and Thursday.

In this episode:
• Ondas Inc.’s three-company defense technology acquisition
• Passive acoustic counter-UAS detection
• AI autonomy and one-to-many drone control
• GNSS-denied navigation and resilient communications
• Building a complete autonomous defense stack
• PowerUs ($PUSA) commercial and defense drone opportunities
• Heavy-lift drones and agricultural applications
• PUSA technical analysis
• SPY, QQQ, small caps, and defense-sector strength
• Upcoming AUSA coverage and new Zero Hour Group research

Zero Hour Today brings retail investors closer to the companies, technologies, and market themes shaping the next generation of defense, drones, autonomy, and emerging technology.

For educational and entertainment purposes only. Nothing discussed is financial advice.

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The crew starts with the morning’s market action, crude oil, and the growing geopolitical backdrop before diving into $GRAB, where a major insider purchase caught the market’s attention and sparked a discussion about whether the beaten-down stock deserves another look.

From there, the conversation moves into one of Zero Hour Group’s favorite areas: drones and autonomy. The team discusses the future of drone delivery, regulatory challenges in the United States, autonomous transportation, and the potential of hybrid heavy-lift drones. They also take a closer look at Parallel Flight Technologies, its hybrid propulsion platform, and why involvement from the Office of Naval Research makes the technology worth watching.

Kate brings her defense and technology perspective to the discussion, breaking down why the mission and use case ultimately matter more than any single drone design, battery system, propulsion method, or AI capability.

The episode closes with a broader look at AI, global competition, upcoming U.S.-China discussions, interest rates, energy prices, and what investors should be watching as markets digest an unusually busy geopolitical environment.

Plus, the Zero Hour Group officially welcomes Kate aboard as the newest member of the team.

Zero Hour Today airs every Tuesday at 10:00 AM Central / 11:00 AM Eastern.

Subscribe and follow Hidden Gems Stock Research for more conversations on emerging technology, defense, drones, markets, and the companies shaping the next generation of innovation.

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We start with the broader market following the latest FOMC event, looking at futures, shifting risk appetite, and some of the macro and geopolitical catalysts that could drive volatility into the fall. From there, we dive into Safe Pro Group ($SPAI) and the significance of Dr. Phillip Frost acquiring a major position in the company, while revisiting what the Zero Hour Group learned firsthand during Safe Pro’s technology demonstration in Miami.

The conversation then moves across some of our highest-conviction names and emerging setups, including $UMAC, $ONDS, $AMPX, $KOPN, $LTRX, and $LPTH. We break down technical levels, potential entry zones, options strategies, and the fundamental stories behind each company. We also discuss XTEND, the growing competition inside the drone industry, the challenge of scaling production, and why the winners of the next phase of autonomous systems may come down to manufacturing, supply chains, and execution rather than technology alone.

A major portion of the show focuses on Kopin ($KOPN) and its opportunity across photonics, optical interconnects, AI data centers, defense displays, and next-generation computing infrastructure. We also revisit our conversation with Lantronix leadership from the Commercial UAV Expo and discuss why edge computing and autonomous systems could create another major “picks and shovels” opportunity inside the drone and robotics ecosystem.

Later, we step outside our normal coverage with a look at biotech and space names including Alvotech ($ALVO), Recursion Pharmaceuticals ($RXRX), Sidus Space ($SIDU), Planet Labs ($PL), Rocket Lab, AST SpaceMobile, and Redwire.

Also discussed in this episode:

• The technical setups we’re watching across $ONDS, $UMAC, $AMPX, $KOPN, $LTRX and $LPTH

• Safe Pro Group’s latest shareholder development and our upcoming Miami demo content

• Drone Dominance, XTEND, manufacturing scale and the industry’s “Valley of Death”

• AI data centers, photonics and Kopin’s optical interconnect opportunity

• Lantronix and autonomous edge computing

• Defense spending, unmanned systems and the changing structure of modern warfare

• Satellite and space-sector ideas submitted by the community

• Biotech speculation and the importance of understanding risk in early-stage pharmaceutical companies

• The upcoming federal fiscal year and potential implications for defense and autonomous-systems spending

• Russia, Ukraine and the growing role of drones in geopolitical conflict

• The move toward expanded trading hours and what it could mean for retail investors

• Zero Hour Today expanding to multiple episodes per week

• A new international contributor joining the Zero Hour Group

• Our upcoming coverage from AUSA in Washington, D.C.

• More interviews, company access, live coverage and major guests coming to the show

The Zero Hour Group continues to go beyond the ticker—talking directly with executives, attending industry events, seeing emerging technologies firsthand, and bringing that information back to retail investors.

By Retail Investors, For Retail Investors.

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New Age Robotics spent a decade as a concept about the future without a clear path to profitability and scale. In 2026, it turned into a story about revenue. Manufacturers installed 542,000 industrial robots in 2024 alone, more than double the pace from a decade earlier, and the global operating base of working robots has climbed past 4.6 million units. The AI software layer on top of that hardware, the code that lets a machine adapt to a room it has never seen instead of running a fixed script, sat near $20 billion in 2025. Forecasts put it near $183 billion by 2033, a compound growth rate above 30% a year sustained for eight straight years, in a corner of the market many retail portfolios still hold zero exposure to.

Maryna Bautina, a senior AI consultant at SoftServe, says 2026 marks a turning point: robots and AI systems have worked for years in controlled or virtual environments, and this is the year they start learning the way people do, trying something and adjusting when it fails. She points to logistics as the proving ground: warehouse robots that load and sort without a fixed script, and systems that reroute shipments and manage inventory with no human in the loop. Industry trackers watching the robotics buildout point to a different limit than money. The constraint is specialized engineers who can build the autonomy and the systems integration fast enough to keep up with demand. Government spending is is a key focus of the robotics thesis and where we pivot to stocks I’m watching to capitalize on this emerging market.

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In this episode, we react to the Fed’s unanimous decision to raise interest rates by 25 basis points, bringing the federal funds target range to 3.75%–4.00%. Chair Warsh made the Fed’s priorities clear: the U.S. economy remains resilient, employment is holding up, capital investment remains strong, but inflation is still running too hot for policymakers to declare victory.

More important than the rate hike itself may have been the message behind it. Warsh repeatedly emphasized that “trends matter” and individual data points can be noisy, while refusing to provide the kind of forward guidance markets have grown accustomed to. We discuss why that new communication style could create short-term volatility, but also why the unanimous vote and emphasis on Federal Reserve independence could matter for market confidence going forward.

We also break down rising Treasury yields, the competition for capital created by massive hyperscaler and AI infrastructure spending, geopolitical pressure on energy and commodity prices, and the Fed’s decision to create an AI task force examining how artificial intelligence could affect both the supply and demand sides of the economy.

Then we turn to what all of this means for investors. Despite the rate hike, the market initially held together relatively well, while small caps remained surprisingly resilient. We discuss the setup heading toward the midterms, what could drive the next major risk-on move, and why controlling inflation today could ultimately create a healthier backdrop for equities later.

We close with a look at Safe Pro Group ($SPAI), the latest investment involving Dr. Philip Frost, and why institutional and high-net-worth interest continues to emerge around some of the next-generation defense and drone technology companies we’ve been following.

HGR Investing is focused on finding emerging opportunities before they become obvious - with a particular emphasis on drones, defense technology, AI infrastructure, robotics, batteries, and other next-generation industries.

This content is for educational and entertainment purposes only and should not be considered financial advice. Always conduct your own research and make investment decisions based on your individual circumstances.

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We start with $ONDS and Ondas Holdings, breaking down the company’s latest acquisitions and why the structure of these deals caught our attention. With more cash being used instead of relying entirely on common stock, we discuss what that could mean for dilution, the company’s massive war chest, future acquisitions, short interest, and the long-term Ondas “system of systems” strategy.

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We also preview AUSA in Washington, D.C., where The Zero Hour Group will be on-site covering one of the largest defense industry events in North America. Ondas will be there showcasing autonomous systems, counter-UAS, and ISR capabilities alongside major defense contractors, emerging technology companies, and some of the most important players in next-generation defense.

Then we turn to Rocket Lab $RKLB and the major Iridium discussion. We break down why adding satellite communications capabilities could dramatically expand Rocket Lab’s position in the space economy, how the company compares with SpaceX and Starlink, and why the recent pullback has Rocket Lab back on our radar as one of our highest-conviction space names. We also touch on $ASTS and Redwire $RDW as part of the broader space-sector opportunity.

Finally, we tackle one of the biggest questions in technology right now: Is AI getting out of control? With growing calls for tighter AI safeguards and concerns surrounding autonomous or “rogue” AI agents, we discuss the legitimate risks, the hype, and why slowing AI development doesn’t necessarily mean slowing investment in the infrastructure behind it—compute, semiconductors, energy, and data centers.

We also discuss the upcoming rate decision, political uncertainty heading toward the midterms, and why weakness across technology could potentially create one of the more interesting buying windows we’ve seen in recent years.

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Topics covered:
• Ondas Holdings $ONDS acquisitions and dilution
• Ondas’ cash position and acquisition strategy
• Counter-UAS, autonomous systems, and Golden Dome
• The Zero Hour Group heading to AUSA
• Rocket Lab $RKLB and Iridium
• Rocket Lab vs. SpaceX and Starlink
• $ASTS and $RDW
• AI regulation and rogue AI concerns
• Tech-sector weakness and market opportunities
• Rates, midterms, and the potential year-end setup

Subscribe to Hidden Gems Stock Research for independent coverage of emerging defense technology, drones, autonomous systems, space, AI, and the public companies positioned around these rapidly growing markets.

By Retail Investors, For Retail Investors.

Nothing discussed in this video is financial advice. All opinions are for educational and entertainment purposes only. Always conduct your own research and consider your own risk tolerance before making investment decisions.

#ONDS #RKLB #RocketLab #Ondas #DefenseStocks #DroneStocks #SpaceStocks #ArtificialIntelligence #AIStocks #Investing #StockMarket #AUSA

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A hike sends money toward banks, energy, and early-cycle tech. A hold sends it toward REITs, small caps, and the retail names that live and die on borrowing costs. Odds sit close to 40/60 ,in favor of a hike, heading into Wednesday, so we built the trade for both outcomes instead of guessing which one lands.

The Federal Reserve votes on interest rates September 16. CME FedWatch prices the odds at 59% for a quarter-point hike and 41% for a hold, that has moved hard in three weeks, in favor of a rate increase due to recent geo-political and macro happenings. Before Fed Chair Kevin Warsh’s Jackson Hole speech in late August, traders had a hold near 70%. Warsh told the room that recent inflation improvement hadn’t proven the underlying trend had turned, and the odds flipped inside days. Kalshi had the hike near 48%. Polymarket has it near 49%. Every venue agrees on the same thing: nobody knows which way this breaks, and the gap between the two outcomes is wide enough to matter massively in the short term for variable asset portfolios.

That gap is the subject of this piece. A hike and a hold don’t produce variations on the same market. They produce two different markets, with different sector leaders, different laggards, and different names worth owning into year-end. Free readers get the historical framework and the macro setup. Paid subscribers get the specific tickers, the entry zones, and the levels that would change our mind on each one.

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THE SETUP: WHAT’S ALREADY MOVING

The bond market isn’t waiting for next week. The 10-year Treasury yield closed at 4.80% on September 8, up from 4.73% two weeks earlier. The 2-year sits at 4.39%, up from 4.20% over the same stretch. Short-term paper moved harder than long-term paper which is the signature of a market pricing in tighter policy soonder rather than later and gives extra fuel to the rate hike side. Cash and 1-month bills now pay 3.81%, within striking distance of where the Fed funds rate would sit after a hike. The stock tape is sorting itself by rate sensitivity now, not by the old growth-versus-value lines. On September 8, Real Estate led the S&P sectors, up 1.65% on the day, alongside Industrials at 1.12%. Financial Services lagged, down 1.66%, with Healthcare and Technology also red. I’m reading this as a market in flux and not willing to make a stark move in either direction. Investors are moving money ahead of the vote and we will see the true move when the decision is final. Expect the latter to be much larger.

The Russell 2000 carries the sharpest version of this risk. Small caps have gained 20.2% year to date, ahead of the S&P 500’s 12.7% and the Nasdaq-100’s 17%, on a mix of domestic revenue exposure and a rally in names disconnected from the mega-cap AI trade. 32% of Russell 2000 companies carry floating-rate debt, against 6% for the S&P 500. With how undecided the vote truly is small caps have the most to gain or lose with a rate hold being a true catalyst for a blow off top before midterms or a valuable buying opportunity should rates not stay static.

WHAT HISTORY SAYS WHEN THE FED HIKES

Schwab tracked S&P 500 sector returns relative to the broader index in the twelve months following the first hike of a tightening cycle. Six sectors beat the market. Energy led by 5 percentage points, on the logic that a hike shows up alongside firmer oil prices and the inflation the Fed is trying to contain in the first place. Technology and Financials tied for second at 2.5 points each, for two different reasons: tech holds up early in a hiking cycle before valuations get tested, and banks earn wider margins the moment they can charge borrowers more than they pay depositors. Healthcare added 2 points and Communication Services 1.5. Utilities picked up another point, rounding out the six sectors that beat the market, names investors lean on when volatility rises and cash flow certainty matters more than growth.

Five sectors lagged. Real estate investment trusts took the worst hit, down 4.3 points relative to the market, because REITs run on borrowed money and every basis point the Fed adds raises their cost of capital. Consumer Discretionary fell 4 points and Consumer Staples and Materials each fell 3.5. Industrials brought up the rear at negative 2.1. The mechanism is the same across all four: higher borrowing costs squeeze the companies and the households that depend on credit to spend, and a market pricing in tighter policy prices in that squeeze before it shows up in an earnings report. If Wednesday brings a hike expect this framework to become reality. Banks and energy get paid first. REITs, small caps, and rate-sensitive retail get paid last, if they get paid at all.

WHAT HISTORY SAYS WHEN THE FED HOLDS

A pause tells a different story, and the data runs bigger. LPL Research and Investing.com looked at the year following a Fed pause and found the S&P 500 up 15.8%, with three sectors running far ahead of that number. Semiconductors posted the largest gains by a wide margin, with individual names like Micron up over 600% and AMD up more than 150% in the sample LPL used, on the combination of a relief rally and AI-driven revenue growth in the 34% to 70% range across the group. Healthcare returned 61.1% in the same window, led by names like Eli Lilly and Johnson & Johnson, on the strength of earnings that don’t depend on the Fed’s next move as healthcare is always relevant. Energy returned 39.9%, anchored by dividend payers like Exxon Mobil, which has raised its payout for 43 straight years regardless of what rates do. Financials still made money in that setup. JPMorgan returned 22.6% and Visa 5.2%, both positive, both trailing the leaders by a wide margin. A pause removes the direct tailwind banks get from a hike (wider net interest margins) without removing the relief rally lifting the rest of the market, so financials end up participating without leading.

Put the two data sets side by side and a pattern shows up twice. Energy and healthcare show up on both lists, marking them as quality holdings that work no matter what the Fed does on Wednesday. Everything else flips hard depending on which way the vote goes, and small caps, REITs, and consumer discretionary carry the widest gap between their best case and their worst case making them a higher-risk hold into a feverishly divided fed decision.

THE THREAD RUNNING THROUGH BOTH SCENARIOS

Three names sit outside the binary: They’re the foundation of how we’re framing exposure into Wednesday. Energy and healthcare show up as winners in both the hike data and the hold data, for reasons that don’t have much to do with each other: energy benefits from the inflation dynamics behind either outcome, a hike meant to fight it or a pause that lets it run, and healthcare benefits from earnings streams nobody can price out through a single Fed meeting. Gold works through a third channel. Its case rests on whether the Fed is ahead of or behind the inflation curve, a question Wednesday’s single vote won’t settle either way. If we do get the hold, I expect gold to be one of the biggest winners of the decision.

Below the paywall: the specific tickers we’re using on each side of this trade, the entry zones, and the levels that would make us change our mind.

🔒 SUBSCRIBER SECTION: THE PICKS

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