Could an AI Spending Slowdown Actually Help the S&P 500? | Fidelity’s Jurrien Timmer

Jurrien Timmer of Fidelity joins Justin Carbonneau and Jack Forehand to talk through how he reads a stock market correction by separating what has changed in earnings, interest rates and the multiple investors will pay for future growth. The episode puts the AI data-center buildout in historical context, including how the shift from buybacks to capital spending changes the economics of owning the largest companies, and looks at market breadth beneath the S&P 500. Timmer also discusses bond yields, the case for a 60/20/20 portfolio with gold and other diversifiers, and how rebalancing can turn a decline into a buying opportunity.

1. A selloff driven by higher rates can look much like one driven by slower growth on a stock chart, but the difference matters for relying on bonds as a cushion.
2. Companies building data centers once had cash left for large buybacks; more of that cash now goes back into the business, which Timmer says changes the economics of owning the Magnificent Seven.
3. A semiconductor stock can look cheap just as its earnings are peaking, because earnings and price-to-earnings ratios can move in opposite directions.
4. A handful of large companies can pull the index lower even while most stocks remain in uptrends, and Timmer discusses gold, commodities and other diversifiers alongside stocks and bonds in a 60/20/20 portfolio.