Wall Street just climbed what strategists are calling a wall of worry, absorbing a month of surging oil prices and rising Treasury yields without cracking. That resilience should not be mistaken for calm.
Oil is up roughly 30% and the 10 year Treasury yield has climbed about 40 basis points in a month. Stocks have barely budged despite it.
The Wall Of Worry Behind Flat Stock Markets
The 10 year yield pushed above 5% after the Federal Reserve’s September rate hike. Fed Chair Kevin Warsh has flagged persistent inflation risks since.
CNBC’s Mike Santoli noted the S&P 500 is hovering near the roughly 6,720 level it hit in June. The index is essentially unchanged despite the pressure.
Amy Raskin, chief investment officer at Chevy Chase Trust, called that steadiness a sign of underlying strength.
She said momentum has slowed considerably. She expects stocks to churn until uncertainty around AI spending, the Fed, and geopolitical conflicts resolves.
A Broadening Rally Masks A Bigger Bet
Jim Lebenthal, a partner at Cerity Partners, said the flat headline number hides a healthier rotation underneath it.
As AI momentum names cool, healthcare, energy, and financials have picked up the slack.
“I think that’s healthy, quite frankly, the broadening of the rally.”
Jim Lebenthal, partner at Cerity Partners, on CNBC
Goldman Sachs equity strategist Ben Snider says AI investment is behind nearly half of this year’s S&P 500 earnings growth. He expects that tailwind to fade in 2027.
Jason Snipe of Odyssey Capital Advisors cited the numbers behind that shift on air. He pointed to 52% earnings growth last quarter against a roughly 28% guide for the current one. He also cited AI infrastructure spending he put at $900 billion this year and $1.6 trillion next.
Rob Sechan is chief executive of NewEdge Wealth. He said his firm is leaning on the bond market as a hedge now that yields have reset higher.
“We have been buying bonds like maniacs.”
Rob Sechan, chief executive of NewEdge Wealth, on CNBC
Whether that rotation can absorb a slowdown in AI-driven earnings growth next year is still an open question. Strategists are positioning around it now, rather than answering it.
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