Sep 28, 2026 · 36 min
Oil, yields and politics test U.S. stocks
US Stocks and Treasuries Fall as Oil Pushes Higher; Iran Refuses to Soften Demands
The episode connects a possible equity drawdown with higher borrowing costs, uncertain AI monetization, midterm policy risks and changing investor needs.
- 1Elevated valuations, Treasury yields and oil prices leave U.S. equities vulnerable to a possible 5% to 10% drawdown.
- 2Earnings growth may cushion multiple compression, but AI must broaden into meaningful monetization to sustain its investment cycle.
- 3Midterm politics and generational wealth transfer are reshaping both market risks and the role of independent financial advisors.
Don't miss
Nimrit Kang argues that semiconductor and technology strength is masking broader weakness, while AI must prove meaningful monetization to justify its investment cycle.
The brief
Lori Calvasina frames the fourth quarter around four tiers of market fear, with elevated valuations and difficult comparisons leaving room for a 5% to 10% drawdown.
Strong earnings could offset some multiple compression, but Calvasina’s conservative haircut to consensus estimates reflects uncertainty visible in recent corporate earnings calls.
Nimrit Kang says higher yields are normalizing amid large deficits and debt, while semiconductor strength masks weakness elsewhere and AI still needs real monetization.
Henrietta Treyz shifts the focus to midterm politics, warning that tariffs, trade, foreign policy, defense spending and executive action could intensify policy risk after voting ends.
Rich Steinmeier describes how AI and independence are changing financial advice as advisors prepare for volatility, alternative investments and a generational transfer of wealth.
What was said on this episode
21 statements · 4 positive · 13 negative · 1 mixed · 3 neutral
U.S. equities face an elevated risk of a 5–10% drawdown.
“we think risk of a 5 to 10 percent drawdown has risen”
Listen at 2:30
A 5–10% equity-market drawdown remains the base case.
“that's still our base case, 5 to 10 percent”
Listen at 2:36
Investors should reassess market exposure after each drawdown level.
“you sort of go down one level and then you reassess”
Listen at 4:47
Earnings strength can offset multiple compression after a 10% estimate haircut.
“We can still walk you through math where that earnings strength, even with that haircut, offsets the multiple compression.”
Listen at 6:44
The era of exceptionally low interest rates has ended.
“the period of low rates is over”
Listen at 10:51
Inflation will not return to its previous low level.
“we are not going to see that level of low inflation going forward”
Listen at 11:43
Rate-sensitive and consumer-facing sectors are already experiencing substantial pressure.
“We are already seeing a lot of pain in a lot of interest rate sensitive and consumer facing sectors.”
Listen at 12:23
Broad AI monetization is necessary to justify its trillion-dollar investment cycle.
“it has to go to broad based monetization for AI to make sense for the longer term benefits of this massive, massive trillion dollars spent on AI”
Listen at 13:36
AI investment leadership will shift from builders to companies monetizing AI.
“it will transition from the builders to the ones that are monetizing AI”
Listen at 14:13
The VIX may no longer adequately measure current market volatility.
“maybe VIX, as we know it, is no longer the right measure to monitor the volatility that's happening”
Listen at 14:52
Continued earnings acceleration outside AI would make market growth healthier and broader.
“Our expectation is we have to see this acceleration for the rest of the market continue on. It'll be healthy. It'll be broad based.”
Listen at 16:40
The Republican Party is focused on reforming college-athlete regulations.
“where the Republican Party is focused, spending a week on reforming college athlete regulations”
Listen at 19:50
Voters are focused on high gasoline and diesel prices.
“what voters are paying attention to, which is the high prices of gas and diesel”
Listen at 19:58
Political and market stress associated with Trump has not peaked.
“we have not hit peak Trump”
Listen at 21:28
Election-related stress has not yet reached its peak.
“we have not hit the peak stress points of this election”
Listen at 21:30
Executive-action risks will remain elevated through the next 40 days.
“the next 40 days”
Listen at 22:08
A lame-duck presidency will intensify focus on foreign policy, tariffs, and trade.
“we'll see, you know, an ending presidency, a full lame duck, focus on foreign policy, focus on tariffs and trade and all that stuff that we've been seeing except times a million”
Listen at 22:34
Political conditions will remain risky through the election and following two years.
“It's gonna be risky from here, not just going into the election, but after the election and then for the next two years.”
Listen at 23:53
Investors can access AI exposure through multiple types of companies and infrastructure.
“there are many different ways to play the AI trade”
Listen at 27:39
Investors should favor buy-and-hold strategies and core sectors amid rising volatility.
“where we see volatility driving up towards the midterms, I think we look to see folks playing in a kind of a buy and hold scenario and looking towards kind of core sectors”
Listen at 29:01
Rising oil and Treasury yields are pressuring stocks through inflation and rate-hike concerns.
“stocks have been under pressure all morning long as oil and Treasury yields climb on concerns about higher inflation and the need for possibly more interest rate hikes”
Listen at 31:16
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.