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Kevin O’Leary posted on X on Oct. 20 with a message he said most Americans are not thinking clearly about. It had nothing to do with stocks, startups, or picking the right investment.

The investor and “Shark Tank” star was talking about homeownership. His position was blunter than most financial advisers would put it. Buying a home, he argued, should never be treated as a milestone to rush toward. The mortgage that comes with it is a debt, and debt has a cost that most buyers underestimate before they sign.

Also read: Goldman Sachs has a new warning for the housing market for 2027

“Don’t fall in love with being in debt through a mortgage,” O’Leary wrote. “Fall in love with being debt-free. Feels way better.”

Why O’Leary says rent before you buy

O’Leary’s advice centers on sequencing. Before buying in any market, he said, renters should spend time there, confirm the neighborhood works for them and make sure the job supporting their lifestyle is stable enough to carry a long-term payment.

“Once you’re feeling very comfortable about that, and maybe you’re thinking about starting a family, then considering a mortgage might make sense,” he said.

His concern is not homeownership itself. It is the debt load that comes with it and how quickly that load can become a problem when circumstances change. Property taxes go up. Maintenance is constant. A job loss or an interest rate reset (if you have an adjustable-rate mortgage) can turn a manageable payment into a crisis.

“Always remember that you owe money, lots of money,” O’Leary said. “Debt is debt, and you have to pay it back.”

The ARM warning O’Leary isn’t softening

O’Leary reserved his sharpest warning for buyers considering adjustable-rate mortgages (ARMs). ARMs typically offer lower introductory rates, but those rates reset after a set period, sometimes significantly higher.

“If you go into a floating rate mortgage and all of a sudden for some reason rates do go up, you’re screwed,” he said.

For buyers who plan to sell or refinance before the rate adjusts, an ARM can work. For buyers who stay longer than expected, it is a risk that can turn a home into a financial burden. A fixed-rate mortgage eliminates that uncertainty: the principal-and-interest payment stays the same for the life of the loan regardless of what the rates do.

O’Leary’s warning lands in a market that is already showing strain.Morsa Images / Getty Images

A housing market running out of buyers

O’Leary’s warning lands in a market that is already showing strain. Redfin reported that 14.5% of home-purchase agreements that went under contract in September were canceled, the highest rate in its records outside the pandemic. Sellers outnumbered buyers by 62.6% that month, the largest gap in data going back to 2013. Pending home sales fell to their lowest level since spring 2014, excluding the pandemic months. 60.5% of September sales closed below the original asking price.

More Mortgage Rates and Housing Market:

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The backdrop is an affordability problem that has been building for years. J.P. Morgan analysts said in October that U.S. housing affordability is near its worst level since the global financial crisis. The national homeownership rate edged down to 65% this year. Among Americans under 35, the homeownership rate fell to 35%, a nine-year low. Mortgage applications dropped to their lowest level since 1995.

The data describes a market where many buyers who stretched to get in are now walking away and the ones still looking are finding the math increasingly hard to make work.

What to settle before signing a mortgage

The case for buying has not disappeared. A fixed-rate mortgage on a home someone plans to stay in for years can still build wealth and provide stability. The problem is that few buyers enter the market thinking clearly about what the full commitment costs or how much room they have if things go wrong.

O’Leary’s framework is straightforward. Rent until the income is stable, the neighborhood is confirmed and the down payment is large enough to keep the monthly payment well inside what the budget can absorb in a downturn. Do not buy at the ceiling of what a lender approves. And stay away from ARMs unless there is a clear plan for what happens when the rate adjusts.

The housing market may soften. Rates may come down. But a mortgage signed under pressure today does not wait for better conditions. O’Leary’s point is not to wait forever. It is to make the decision on the numbers, not on the feeling that buying is what adults do.

Related: Jeff Bezos has a blunt answer for why housing is so expensive

A stock market near a record high can make investors feel as if nearly everything is working. Ted Thatcher, a financial advisor with more than a decade in the investment sector, sees a very different picture beneath the S&P 500 Index. He said 82% of the index’s stocks were at least 10% below their own highs, while 60% were down 20%, even as the index itself approached a high. That gap is why he favors Nvidia, Microsoft, and Alphabet over simply buying whichever stocks have fallen the most: A lower price alone doesn’t turn a company into a bargain.

Thatcher, founder and president of Bright Lake Wealth Management, argues that the trade in artificial intelligence has retained the lead in the market because it has offered earnings growth. Meanwhile, high oil prices, inflation pressure, and rising 10-year U.S. Treasury note yields have weighed on much of the rest of the market. His framework has two parts: Keep exposure to the companies benefiting from AI demand now, then add more broad-market exposure if the macroeconomic pressures that have narrowed market leadership begin to ease.

That approach is a view on market conditions, not a one-size-fits-all allocation. Thatcher repeatedly said that portfolio decisions should reflect an investor’s need for income, tolerance for risk, and time horizon. Still, his case offers a useful way to separate a broad-market decline from an opportunity in a particular stock.

Here is how Thatcher — who spoke in an interview with TheStreet on October 20, 2026 — connects market breadth, AI earnings, oil prices, and portfolio positioning.

Why a high S&P 500 can mask a weak broad market

The S&P 500 is weighted by market capitalization, meaning its largest companies have the biggest effect on the index. Nowadays, information technology — which includes Nvidia and Apple — has the largest weighting among other sectors in the benchmark. A strong run in a small group of giant companies can therefore lift the benchmark even when many smaller constituents are falling. Thatcher described the market since the March 30 lows as one led by roughly 10 companies, with AI-related stocks carrying the leadership burden.

That is the tension in his outlook. The poor performance of many S&P 500 stocks may eventually create opportunities, but he does not treat breadth weakness — meaning more stocks are declining than rising even as the benchmark index gains — as proof that beaten-down shares are cheap. A stock can decline because its outlook has deteriorated, because a sector is under pressure, or because investors are reacting to interest rates and economic uncertainty. The reason for the decline matters as much as the fall itself.

Just because a stock has moved down doesn’t necessarily mean it’s a good buy.
Ted Thatcher, when asked whether the divergence within the S&P 500 created bargains or a warning sign

Thatcher’s explanation for the breadth problem centers on external pressures rather than a blanket indictment of corporate America. He pointed to oil near $100 a barrel, inflation, interest-rate pressure, and higher 10-year Treasury yields. In his view, relief in those areas could widen market participation over time. Until then, he expects the concentration in a relatively small group of AI leaders to remain a source of both performance and volatility.

For an investor, the practical distinction is important. Buying a broad index fund remains a way to own the entire market, including the largest technology companies. But a separate allocation to an equal-weight fund such as the Invesco S&P 500 Equal Weight ETF gives each constituent a more similar influence on returns. That structure can benefit if lagging stocks recover, but it can lag a market-cap-weighted index if the biggest companies continue to dominate.

Why Thatcher keeps NVIDIA, Microsoft, and Alphabet at the center

Thatcher’s preference for Nvidia starts with valuation relative to expected earnings. He said Nvidia was trading at around 23 times earnings based on the prior 12 months, while estimates for future earnings put its forward earnings multiple, or stock price divided by expected earnings per share, in a range from the low teens to the mid-teens. Still, the range reflects differing projections, and forward estimates can be wrong. His point is that a fast-growing company can look expensive on trailing results while appearing less expensive when investors assess expected profit growth.

He also views Nvidia as the most direct beneficiary of sustained spending on AI computing. That is why he believes the company has more upside, even after a period when hedge-fund selling pressure and concern about the broader AI buildout weighed on the shares. His $300 price target was his own forecast, not a guarantee, and it depends on the demand outlook that underpins those forward earnings expectations. (Nvidia closed at $210.96 on October 23, 2026.)

Microsoft represents a different version of the AI case for Thatcher. He praised the company’s restraint in bringing AI products to market and its decision to fund data-center expansion from cash flow rather than leaning on debt. A hyperscaler is a large cloud-computing company with vast data-center infrastructure. Thatcher believes Microsoft’s execution across enterprise and consumer products, combined with that financing discipline, supports his view that the stock has further upside. He cited a target of around $600 a share.(Microsoft closed at $524.51 on October 23, 2026.)

For Alphabet, Thatcher emphasized vertical integration, which means controlling several layers of the product and technology chain. He pointed to Alphabet’s in-house tensor processing units, or TPUs, its hardware, Gemini 4, and its consumer distribution. His thesis is that those pieces can work together: proprietary chips support computing capacity, the AI model provides the service, and Alphabet’s existing distribution can help the product reach users. That is a mechanism-based argument, even though its ultimate success depends on execution and adoption.

The common thread is not that all large technology companies are identical. Thatcher said he also liked Apple’s hardware distribution advantage and viewed Amazon as a strong operator. His three preferred names reflect a judgment about earnings, execution, and AI positioning, rather than an argument that investors should abandon diversification for a handful of stocks.

What would change the AI leadership thesis

A useful investment thesis needs a condition that could disprove it. Thatcher named one: a meaningful slowdown in AI spending by the largest cloud-computing companies. He distinguished that from concern about one neocloud, a newer cloud provider that rents specialized computing capacity. A broad slowdown would be more consequential because demand for Nvidia’s chips and the revenue growth of the major cloud platforms are closely tied to ongoing capital spending on AI infrastructure.

Thatcher cited cloud-growth figures from recent company results as evidence he was watching, including more than 80% cloud growth for Alphabet’s Google and more than 40% growth for Microsoft’s AI segment. Those figures are historical observations from his discussion, not forecasts for future quarters. His view is straightforward: If the largest buyers stop producing strong AI-related growth, investors should reassess the companies whose valuations and earnings expectations rely on that demand.

Until we get relief on oil, you know, fuel prices, I would say, you know, yield pressure and interest rate pressure, the AI trade is going to continue to lead the market.
Ted Thatcher, when asked what could drive the market higher despite oil and interest-rate headwinds

Thatcher’s conclusion is counterintuitive for investors who are uncomfortable with market concentration. He doesn’t argue that concentration is healthy. He argues that it is the condition investors must account for while the macro backdrop limits participation elsewhere. His phrase “price of admission” describes the trade-off: Owning the current leaders can mean accepting greater dependence on a narrow set of companies and sharper reactions to new information.

That dependency also explains his answer when asked which stock he would sell first if the AI case broke. Nvidia is central to his bullish case because it is so closely exposed to chip demand. The same direct exposure that makes Nvidia attractive in a continuing AI buildout could make it vulnerable if demand falters.

You’d have to sell, you probably would have to sell Nvidia because you’d presumably expect, you know, everyone’s buying all of Nvidia’s chips.
Ted Thatcher, when asked which holding he would sell first if the AI trade started to crack

How oil and Treasury yields could broaden the market

Thatcher sees oil as a potential trigger for a broader rally because fuel costs feed into inflation, transportation expenses, and interest-rate expectations. He said he would like to see oil trend down toward the low $80s or high $70s per barrel. That price range is his market signal, not a precise forecast. In his view, a sustained decline could reduce inflation pressure and make investors more willing to own companies outside the AI leaders. (WTI crude oil, the U.S. benchmark, was trading at around $103 a barrel as of October 23, 2026.)

He tied that argument particularly to consumer staples, which are everyday necessities such as groceries and household goods. Thatcher said transportation costs can account for 30% to 40% of the cost of those goods, depending on the analysis used. Lower fuel and diesel costs could therefore improve the cost backdrop for staples companies. He added that consumer discretionary companies could also benefit, but he focused on staples because consumers generally keep buying necessities even when budgets are constrained.

The other part of his macro view is the 10-year Treasury. A Treasury note is U.S. government debt; when yields fall, the prices of existing bonds generally rise. Thatcher said he liked buying the 10-year Treasury at a 5% yield, especially for investors holding cash that is not being put to work. He expects yields to move lower before they rise to 6%, based partly on buying interest from institutions and commercial hedgers. That remains his outlook, and bond prices can fall if yields instead rise.

This is where the strategy becomes more personal. Someone who needs predictable income or wants to reduce portfolio volatility may find a Treasury allocation relevant for reasons that have little to do with a stock-market forecast. Someone with a longer horizon and a higher tolerance for equity risk may make a different choice. Thatcher explicitly said Bright Lake Wealth Management sets bond allocations family by family rather than applying a fixed percentage to every client.

How Thatcher uses the Invesco S&P 500 Equal Weight ETF

Thatcher does not frame the Invesco S&P 500 Equal Weight ETF (which goes by the ticker RSP) as a replacement for the conventional S&P 500 Index. He called it a tactical allocation, meaning a position intended to express a view on changing market conditions rather than a wholesale redesign of a portfolio. He would not sell an existing market-cap-weighted S&P 500 holding simply to make room for RSP, because that holding still includes the technology leaders he favors.

Instead, he would direct new money to RSP as a separate allocation when an investor wants to position for improving breadth over a period of six months, a year, or longer. In a hypothetical $10,000 split among Nvidia, Microsoft, Alphabet, and RSP, he said the three technology stocks would receive 60% to 75% in roughly equal portions, with the remainder in RSP. That example is an illustration of his preference at the time of the discussion, not a model portfolio for every reader.

The sequencing matters. Thatcher expects AI leadership to persist in the short term, and he would then consider increasing the RSP allocation as pressures on oil, fuel, inflation, and rates ease. An equal-weight strategy can provide more exposure to a broad recovery, but a lesser weighting strategy to the mega-cap companies that have driven the index. Investors using it should understand that they are making an active choice about market leadership, even if they hold the fund for diversification.

The takeaway for S&P 500 investors facing a narrow market

Thatcher’s framework starts with a simple discipline: Don’t confuse a falling stock with a cheap stock, and do not confuse a rising index with broad market strength. Investors who share his AI view can decide whether they are comfortable owning companies such as Nvidia, Microsoft, and Alphabet because of their earnings outlook. At the same time, a clear slowdown in AI spending and demand, for example, could change that view.

For investors who want broader participation, the decision is different. Watch the macro conditions Thatcher identified, especially oil, fuel costs, inflation, and Treasury yields. If those pressures ease, an equal-weight S&P 500 fund may be a way to add exposure to the many companies that have not shared fully in the index’s advance. If the pressures persist, market leadership may remain narrow and volatile.

The decision procedure is therefore less about predicting the next daily move in the S&P 500 and more about matching an allocation to a thesis and a risk limit. It may suggest owning a concentrated AI position only if a slowdown in demand wouldn’t force an investor to sell at an unacceptable loss. It may also mean using a broad-market allocation when a different exposure fits the investor’s horizon. And treat political events, price targets, and rapid-fire market calls as inputs to a plan, rather than substitutes for one.

Thatcher’s bullish view depends on AI demand holding up and on macro pressure eventually easing. Investors do not need to accept either premise wholesale. The more durable lesson is to separate the reason a stock has fallen, the source of a company’s earnings growth, and the role that position is meant to play in a portfolio.

Note: The market musings expressed herein are those of the interviewed guest and should not be treated as professional investment advice. Readers should consult a certified financial planner (CFP) for individualized advice based on their available capital, goals, risk tolerance, and time horizon.

Some or all of this content may have been generated by AI. While we strive for accuracy, AI can occasionally produce incorrect information. If you buy something via one of our links, we may earn a commission.

This is one of those weeks when investors and markets will get buffeted on all sides with information.

So, it is quite possible markets will do a lot of gyrating. The week includes:

Major earnings reports. These include results of Verizon Communications (Oct. 26), Visa, Coca-Cola and Boeing (Oct. 27), Google parent Alphabet and Microsoft (Oct. 28), Amazon, Intel and Eli Lilly (Oct. 29) and Exxon Mobil and Chevron (Oct. 30)

The Federal Reserve will announce Oct. 28 if they’ll change interest rates.

Important economic reports are due, including new-home sales and consumer confidence on Oct. 27, and consumer inflation on Oct. 29.

Read more: Elon Musk reportedly invests $1 billion in media giant

The Fed decision and the earnings are the big events of the week.

Most Fed watchers see the central bank leaving its key lending rate at 3.75% to 4%, despite Chairman Kevin Warsh’s concerns about stubborn inflation. But a rate increase is expected at its December meeting.

That’s not great news for home buyers, who have seen mortgage rates hit their highest levels since the fall of 2023.

Crude Oil is up nearly 80% this year.SOPA Images / Getty Images

Solid tech, astonishing oil earnings

The earnings should be solid, if only because the tech giants are so big that it’s hard to dislodge them and their plans to invest billions in new data centers. The one worry in all that spending is that the business they generate may not support all the investment.

Consulting firm Gartner thinks that more than $3.5 trillion of AI infrastructure spending could be exposed to impairment — meaning it would have to be written down — by the end of 2030 if AI providers keep spending at their current pace. Further out, the firm says more than $4 trillion in asset value could face write-down risk through 2032.

Or one could see data center developers start to consolidate to survive, John Lovelock, who wrote the Gartner report, told CNBC.

But the oil earnings? They may take your breath away.

Exxon Mobil is expected to report $4.03 a share, up 114% from a year ago with revenue jumping 27% to $106 billion, according to StockAnalysis.com.

Chevron’s earnings may soar from $1.85 to $4.86 a share, with revenue jumping 33% to $61.7 billion.

But remember: Crude oil is up nearly 80% this year, thanks to the U.S.-Israeli war against Iran.

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A market that is watching nervously

Put it all together, and you have a stock market that changed little last week. But investors were mostly on edge. And needing and hoping all those earnings coming this week to deliver.

The Standard & Poor’s 500 and the Nasdaq Composite and Nasdaq-100 indexes fell 0.5% to 0.8% on the week. The Dow Jones Industrial Average rose 0.4%. But futures trading on Oct. 25 suggest a modestly positive open.

Interest rates fell a little, but only a little. Mortgage News Daily’s daily report showed the 30-year mortgage rate at about 7.3%, down from its 7.61% peak on Oct. 5. The 10-year Treasury yield was at 5% on Oct. 23 and has been above 5% for 21 of the last 22 sessions.

So, if you’re an interested investor, best to invoke (and paraphrase slightly) the late Bette Davis’s great line from the film, “All About Eve:” Fasten your seatbelts, it may be a bumpy week.

Related: Bank of America warns of 2027 stock market risk few expect