Thoughtful Money · Oct 8, 2026 · 1h 2m · 45m saved
With Jim Iuorio, Market Strategist and Futures Trader at TJM Institutional Services
Seven stocks made up 35% of the S&P 500's market value in May, Jim Iuorio said, a share he said has never been reached before. The closest, in 2001 and 1980, was 25% to 26%.
Calling a bubble is easy and timing it is not, he said. Iuorio calls the AI trade one and is staying invested, carrying puts about three times their usual size and taking profits along the way.
"I'd argue that this is a bubble, which by the way, that opinion means nothing because you can identify a bubble as it's inflating and still be three years too early on when everything hits the rocks, so that means nothing to me." — Jim Iuorio
Jim Iuorio, Market Strategist and Futures Trader at TJM Institutional Services, on Thoughtful Money, has traded bond futures and three-month interest rate futures for 40 years and helps write the weekly Unfiltered Investor newsletter.
The full interview is covered here so you can skip it. 62 minutes of audio, 17 minutes of reading.
Here are the 14 predictions that matter.
Key Takeaways
The AI trade is a bubble, he said, and calling one says nothing about when it ends
Seven stocks were 35% of the S&P 500 in May, against 25% to 26% at the 2001 and 1980 peaks
Retail investors have not yet borrowed heavily to buy, which he takes as a sign the rally may have time left
Losses on zero-day options may make the long-term market sturdier, not weaker
He expects the Fed to cap the 10-year yield around 5.5% by buying long-dated bonds
Warsh would change course only after real damage: a 35% Nasdaq fall, a 25% S&P fall and a 10-year near 5.5%
AI productivity gains are real, he said, but that does not mean the AI stock trade lasts forever
Disinflation should arrive within about ten months, with Fed rate cuts four or five months into 2027
He is looking at 10-year Treasuries for the first time after 40 years of trading bond futures
1. A Bubble and Rising Yields
The host asked for a few words on the economy and markets. Iuorio said two things stand out over the past year: the steady rise in the 10-year Treasury yield and the AI trade, which he called "somewhat of a mania."
He thinks the AI trade is driving the stock market, and probably the economy
He said market breadth is poor, with 25% of stocks trading above their 50-day moving average. His rule is that an investor can neither sell everything and watch others profit for three more years nor let everything ride.
He said the moment favors pragmatic investors who will take profits, even if that means paying taxes on them.
Four reasons the 10-year yield is rising
He listed them in order of weight: heavy Treasury issuance to pay for deficits and for conflicts "that just don't seem to end," which he called underappreciated; inflation, which he ranked second; foreign central banks trying to move away from dollars, which he called "a silly thing for them to try"; and AI competing with bonds for investment dollars.
