Speaker · Updated
Steve Sosnick: latest market views
Interactive Brokers
Summary
Steve Sosnick is chief strategist at Interactive Brokers, who joined its Timber Hill trading arm in 1995 as an equity risk manager and options market maker and previously held trading roles at Morgan Stanley, Lehman Brothers and Salomon Brothers.
Chorus has 11 views from Steve Sosnick across 3 episodes on CNBC Power Lunch since October 15, 2026.
What they talk about most
The latest views
Newest first. Every quote is checked against the episode's transcript.
Market has shifted from unquestioned AI spending to demanding ROI, a secular change in mindset.
Sosnick says investors used to accept any AI spending as good and assume it would return value. Now they ask what the ROI will be, and in some troubled cases whether investors will get their capital back. He calls it a big secular change in mindset. With everyone fully invested in the AI trade, there is no one left to absorb selling when sentiment turns.
“[The narrative] went from all money that was invested or spent on AI is good and will return whatever. We never really question the whatever. So all of a sudden is, what is that ROI going to be?”at 6:30
CNBC Power Lunch: Tech Sell-Off, AI Trade Fears and Amb. Tilman Fertitta ·
Fed is unlikely to rescue stocks; the Fed put covers banks and credit, not equities.
Sosnick reviews the Bespoke comparison episodes and says the Fed rescued markets in several of them. He argues the Fed put applies to the banking system and credit markets, not to the stock market. This Fed does not appear to be riding to the rescue, so a prolonged selloff would not be cushioned by policy.
“The problem is if the Fed's not riding to your rescue and this Fed does not appear to be doing that, remember, the Fed put applies to the banking system and the credit markets, not the stock market.”at 7:03
CNBC Power Lunch: Tech Sell-Off, AI Trade Fears and Amb. Tilman Fertitta ·
AI infrastructure & data centers
Midterm results threaten the AI data-center build-out; backlog orders may not be realized.
Virginia, Georgia, Ohio and Texas, the four states with the most AI build-out, all turned blue. The incoming Texas governor wants a moratorium on new development, though projects with shovels already in the ground would continue. Sosnick questions when the large backlog of orders will be realized. He calls this an existential, fundamental change, unlike the tariff reaction, which the market recovered from quickly. Fundamental shocks take a long time to bounce back from.
“The four states that see the most AI build out, Virginia, which had a blue governor before, but Georgia, Ohio, Texas all turned blue. And in the case of the governor elect of Texas, she wants to put a moratorium on new development.”at 9:05
CNBC Power Lunch: Tech Sell-Off, AI Trade Fears and Amb. Tilman Fertitta ·
Market sentiment, positioning & volatility
Retail investors are buying tech dips, including neoclouds and chips, which makes him nervous about forced stop-outs.
Sosnick says retail investors accelerated their buying last week, including a lot of Alphabet into the sell-off. They have been buying Nvidia, chip names, memory names and neoclouds as well. He has noticed that stocks which sell off on good earnings tend to recover within a day or two, while those selling off on bad news, such as Alphabet and Intel, do not. With some of these stocks down 5% to 20%, he expects stop-loss orders to be triggered. That is why the continued buying makes him nervous, since forced selling could follow.
“They have been buying all of them, which kind of makes me nervous when I hear what Kate just said because I do think a lot of them... some of that is going to be either, you know, if not for selling, it's going to be... all kinds of stops being triggered.”at 42:26
CNBC Power Lunch: Tech Sell-Off, AI Trade Fears and Amb. Tilman Fertitta ·
Market sentiment, positioning & volatility
Leverage is the worst enemy in a downturn, since margin calls force selling at the worst time.
Sosnick says margin debt has been at an all-time high, held by both individuals and institutions. He argues that people love leverage when it works, but it becomes the worst enemy in a downturn. If you paid cash and a stock falls, you have discretionary decisions. If you bought on margin, you are forced out of trades or face margin calls, which is extraordinarily uncomfortable. He thinks the market periodically needs to reset its attitude toward leverage, since people fall out of love with it at the worst moment.
“Margin debt has basically been at an all time high. That's individuals and institutions... The problem is leverage is your worst enemy in a downturn because, you know, here's the thing. If you own a stock and you paid cash for it and it goes down, you got decisions to make.”at 43:05
CNBC Power Lunch: Tech Sell-Off, AI Trade Fears and Amb. Tilman Fertitta ·
Investors are rotating from risky to less risky assets rather than fleeing the market, with defensive sectors holding up.
Steve Sosnick says investors are not exiting the market but reallocating from risky to less risky positions. Bond yields are falling, and defensive sectors were doing okay. He says the selling is still very much concentrated in tech. He attributes it to several factors, including institutional positioning and concerns about returns on AI spending.
“What we're seeing is people not fleeing the market so much as reallocating from risky to less risky.”at 7:23
CNBC Power Lunch: Tech Sell-Off, AI Panic and Market Rotation: Power Lunch ·
Market sentiment, positioning & volatility
Crowded institutional positioning in tech left no buyers, so stocks fall even on good numbers.
Steve Sosnick argues that institutions are now fully overweight popular tech names like Alphabet and Microsoft, and everyone already knows those stories. With nowhere left to go and no one to buy, stocks sell off even when the numbers are good. When the numbers are bad, overweight institutions rush out, and there is little support. He says this positioning was a big part of the recent tech selloff.
“The positioning got so crowded, and I think that was a big part of it... That's why a lot of these stocks do poorly even when the numbers are good because there's no one to come in and buy them.”at 10:22
CNBC Power Lunch: Tech Sell-Off, AI Panic and Market Rotation: Power Lunch ·
Stock rally depends on AI ROI; doubts about it could make tech and stocks fragile.
Sosnick argues the stock market has rallied despite rising bond yields because investors believe AI spending will pay off. If the ROI is seen as effectively infinite, borrowing costs of 9% or 20% do not matter. A sustained tech decline driven by doubts over AI ROI would expose that fragility.
“if people really start to question the ROI on AI investment, which has allowed the stock market to rally despite bond yields going up.”at 4:54
CNBC Power Lunch: Reaction to PPI Data, TeraWulf CEO Interview, Global Energy Markets 10/15/26 ·
Russell 2000 is at risk if lenders stop funding unprofitable small companies.
Sosnick says many Russell 2000 companies are not profitable and need to borrow. If investors are not lending to lesser credits, the index's components are in real trouble. He used this to explain why the Russell 2000 was not rallying as strongly as larger stocks.
“a lot of these stocks are not profitable, and they need to be able to go out and borrow money, and if people are not lending money to lesser credits, then the Russell two thousand components are in some real trouble.”at 8:41
CNBC Power Lunch: Reaction to PPI Data, TeraWulf CEO Interview, Global Energy Markets 10/15/26 ·
Bond rally reflects an oversold market plus flight to safety, a risk-asset warning.
Sosnick says that a 10 basis point rally in bonds on a bad PPI print would not have been expected. He attributes it to an oversold bond market combined with a flight to safety. The open question is whether money is flowing into Treasuries because it is leaving risk assets, which would be problematic for stocks.
“So what this is telling us is it's something else. It's a combination of an oversold bond market and a flight to safety”at 9:03
CNBC Power Lunch: Reaction to PPI Data, TeraWulf CEO Interview, Global Energy Markets 10/15/26 ·
Crude futures curve shows the oil supply situation is not improving.
Sosnick reads the futures curve and its backwardation. Front-end futures are down about $4 from a month ago, but a year out they are up about $8. He takes that shape to mean the supply situation is not getting better, so crude is not being priced for relief.
“The crude futures are telling us the supply situation is not getting better... It's not.”at 11:17
CNBC Power Lunch: Reaction to PPI Data, TeraWulf CEO Interview, Global Energy Markets 10/15/26 ·
Shows
- CNBC Power Lunch · 3 episodes
Ask your AI what Steve Sosnick thinks
Chorus gives Claude, ChatGPT and other assistants every view Steve Sosnick has shared on the shows it covers, next to everyone else's. Ask where they stand, what changed, and who disagrees.
Chorus reports what speakers said. It isn't investment advice.