Warnings about Wall Street’s excessive optimism, concentration risk, and frothy valuations have fallen on deaf ears for most of this year, leaving market-watchers wondering what, if anything, will cool the tech and artificial intelligence frenzy.

It turns out that it could end up being a plain old-fashioned shift in the interest rate outlook.

The S&P 500 and Nasdaq, buoyed by strong earnings and AI capex investment, have notched dozens of record highs this year, a remarkable feat given the uncertainty and poor visibility that have characterized the economic and policy landscape in 2025.

But both indices peaked on October 29, the day the Federal Reserve cut interest rates for a second consecutive meeting. Crucially, however, Chair Jerome Powell said afterwards that a third cut in Decembe

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