On the Tuesday, October 28, 2025 episode of The Excerpt podcast: From Nvidia to Meta, tech giants have powered Wall Street to record highs. Yet even as stocks climb, trillions of dollars are being parked in money-market funds—a sign of investor unease. USA TODAY’s Daniel de Visé explains why some economists see a bubble forming, how interest-rate decisions and trade tariffs could tip the balance, and what smart savers are doing to protect their 401(k)s. Whether you’re an active trader or a cautious investor, this episode of The Excerpt offers perspective on navigating a market that may be running too hot to handle.
Hit play on the player below to hear the podcast and follow along with the transcript beneath it. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.
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Dana Taylor:
If you are wondering whether the surge in tech and AI stocks represents real growth or just another stock market bubble, you’re not alone. Some market analysts warn we are wading into bubble territory. Welcome to USA TODAY’s The Excerpt. I’m Dana Taylor. Today is Tuesday, October 28th, 2025. With so much money concentrated in a few tech and AI giants, are we setting ourselves up for a market crash? Here to hash out the current state of the stock market is USA TODAY personal finance reporter, Daniel de Visé It’s good to have you on, Daniel.
Daniel de Visé:
Good to be here. Thank you.
Dana Taylor:
Is the stock market running too high? What are you hearing from analysts?
Daniel de Visé:
Well, the stock market has been breaking records on and off over the course of the year, and that happens a lot of the time. If you think back over the last several years, what’s a little odd and different now is that the stock market is breaking records despite the fact that we have a fairly weak job market. Heck, we don’t even know the state of the job market because we’ve got a shutdown, we’ve got tariffs on, again, off again, who knows what the tariffs are, but volatile, that’s what they are, and we’ve got lingering inflation that just won’t go away. So why the stock market keeps breaking records amid all of that sort of volatility is anyone’s guess. But yeah, we’ve got a pretty hot stock market.
Dana Taylor:
I want to dig into the role of AI and tech giants here. How are investments in AI fueling the current stock market?
Daniel de Visé:
There’s these magnificent seven, the seven big tech stocks. This is the Metas and the NVIDIAs and the Microsofts and the Apples, and they make up something like almost 40% of the S&P 500. And the S&P 500 is 500 companies, but those seven companies make up almost two fifths of its value. So absolutely those seven companies, and those are the AI companies, by and large, are absolutely fueling the stock market. I can’t stress enough that those companies, and if you own their stock over the last several years, you’re doing great. Those Magnificent seven companies went up by 700% the stock prices over the last decade, and that compares to, I don’t know, a hundred or 200% for the market as a whole. So yeah, it’s all about the magnificent seven.
Dana Taylor:
In your piece, you mentioned the cyclically adjusted price to earnings ratio or CAPE ratio. I have no idea what that is. What is it and why is it something to watch?
Daniel de Visé:
Okay, well, I barely understand it myself, but this is price to earnings. And so it’s the ratio of the stock’s price, what the stock costs to what the company is earning, and it’s basically a way to tell if a stock is fairly priced, overpriced, or under-priced. So if that ratio of the price of the stock to the earnings is low, it means you’re getting a value, you’re getting a deal, a good price, and if it’s crazy high, I don’t know, 30, 40, 50 to one, then you’re arguably not getting so good of a deal, and that means the stock is arguably overpriced and it’s absolutely something to watch because it’s a sign of the market, again, being kind of overheated and of stocks being overpriced, you’re just not getting a good deal.
Dana Taylor:
Let’s go back to the 1999 .com and the 2008 housing and financial bubbles. Are there parallels between either of those and what we’re seeing today with AI and tech?
Daniel de Visé:
Absolutely. If you pull up this CAPE ratio on your computer, you’ll see the number is up to 40. And I know that doesn’t mean anything, but there’s two times before in our history when this price to earnings ratio was as high as around 40. One was 2000, and what happened after 2000, in 2000 and after that was this massive .com bubble burst, and that was just ruinous for the stock market. Anybody who had a lot of tech stocks then just took a bath. And then seven, eight years later, you had The Great Recession, which was also a very unpleasant time for anyone who owned stocks. So that was one time when this price to earnings index was very, very high. The other time, wait for it ,was 1929, and that’s where we are now. If you look at this chart, those are the two moments when this index was very high, and I hate to say it, but that’s exactly where we are now.
Dana Taylor:
So Daniel, you’re saying we are in a bubble?
Daniel de Visé:
Well, it depends who you ask, but a lot of people are saying that we are. If you just search the term stock market bubble, Jamie Dimon, the JP Morgan Chase guy said the bubble word a few days ago. A lot of commentators are saying it. You’ll see articles every day from different financial publications about bubble this and bubble that. There are some people who will passionately argue there’s not a bubble, and the big argument against the bubble is that stock prices continue to rise, and all these various smart investors think that these prices are okay, but again, they thought that in 2000 and then look what happened.
Dana Taylor:
What has Fed chair Jerome Powell said about stock prices? Does he think the economy is at risk here?
Daniel de Visé:
Well, Jerome Powell doesn’t speak in these sort of soundbites. He uses very measured words, and so that’s the context here. He said that stocks are fairly highly valued, and apparently that’s like him saying run for the hills. No, not really, but people took his comments to mean that stocks are getting overvalued. So I think if you were listening to him and you’re an economist, you would reach the conclusion that Jerome Powell, the Fed chair, is among those who believe that the market is running pretty hot and that maybe we’re in a period where stocks are overpriced. It’s as simple as that. Overpriced.
Dana Taylor:
Daniel with previous stock market crashes, we’ve seen institutions that were too big to fail, they were bailed out. How might something like that play out with AI and tech giants?
Daniel de Visé:
I went and looked and there really was no bailout that I could find after the .com bust. Which is if there’s to be a bust now, if this is a bubble, then that’s the closest equivalent. That was 25 years ago. I don’t think anybody was bailed out after that. The bailouts you see, that’s more when there’s a banking crisis. Now, as far as I know, we don’t have a banking crisis going on right now, so I don’t think there’d necessarily be a bailout if there were a bursting bubble.
However, that said, we saw in this Amazon Web Services outage just recently, how much these seven magnificent seven companies pervade our lives. So much of what we do from our smart speakers to banking transactions to doing our jobs depends on these companies, the NVIDIAs, the Apples, the Metas, the Alphabet. So if something really bad happened to those companies, if they lost so much value that they couldn’t do what they do, I mean, yeah, we’d be in pretty bad shape. So I’m not even sure how it might play out, but yeah, I guess you could imagine a situation where maybe the government would have to come in and help Amazon do what it does. God forbid we got to that point.
Dana Taylor:
I’m looking for some good news. Are money market funds having a moment? Do you see that as an indicator of lessons learned from The Great Recession?
Daniel de Visé:
Well, that’s kind of a paradox because even as the stock market continues to go up and up and up, money market fund investments are, I think at an all time high. It’s in the trillions. What that means is that people who have money are parking a lot of money, trillions of dollars of money in money market funds, and the advantage of those funds is right now, because interest rates are a little bit high-ish, paying a pretty good interest rate, maybe 3%, 4% a year, which is good. It’s higher than inflation, so you’re actually earning money, real money, and the great thing about a money market fund or a high yield savings account, which is equivalent, it will not go down. I mean, in other words, you’ll never lose any of that money. So people who want to hedge against the possibility of stocks wavering or crashing is you can put money into a money market fund and it’ll go up a few percent a year, and there’s again, no possibility that it will lose value.
Dana Taylor:
Daniel, should the market fall, there will be investors who seize the opportunity to make money as it rebounds. What are some of the perils of timing the market or buying the dip?
Daniel de Visé:
Yeah, the problem with trying to time the market is you have to make at least two really good decisions, really well-timed decisions about what to do. So you first have to decide when to take money out of the market, and that means when you think it’s peaking, and it can be terribly difficult to figure out when the market is peaking because think about how many record days we’ve had on the market just this year. You might’ve thought the stock market was as high as it was going to get a month ago, three months ago, five months ago. And look, it’s higher now than it was then. So it’s very hard to pick when’s the peak.
And then if you cash out of the market, let’s say you take all of your money out of the stock market, then you have all cash and you have to figure out when to put it back in. That’s buying the dip. But let’s say stock market values should fall. You have to figure out when the bottom is, and that’s again, very, very hard to figure out. In The great Recession, the bottom didn’t come, I believe, until 2009. That was many months into the Great Recession. So if you’d put your money back in the stock market anytime in 2008 on any day in that year, you would’ve missed the bottom. So those are the two decisions you have to make when you’re trying to time the market, and it’s just very tricky to do.
Dana Taylor:
Anyone fortunate enough to have a 401k may be worried about those investments, but one financial planner you spoke with sees a potential opportunity should the market go down, what do they share with you?
Daniel de Visé:
Yeah, the reason I wrote this recent article was to raise the question of should you put some money in cash. If you have a 401k account, you’re a regular retirement saver like you and me, should you take 5% of that money or 10% and just have it in cash? That way, heaven forbid, if the market should tank, you have some cash and that won’t go down in value. It’s the same thing if you have it in a money market account or a high yield saver, that is a cash equivalent. So yeah, a couple of the people I interviewed said, yeah, if you have some money in cash, then first of all, your accounts won’t go down quite so much if there’s a crash or contraction. And then when the stock prices are down, you can buy stocks at a discount. That’s what you’re supposed to do.
You’re supposed to buy low, right? If the market goes down by 10% or 20%, you’ve got all these deals out there, stocks that are bargain priced, and then you can take that cash and you can buy stocks. Another thing you can do, even if you don’t have cash lying around, which many of us don’t, if the market should go down by 10 or 20%, it would be a wonderful time to increase your 401k contribution. Let’s say you’re contributing 8% of your paycheck into a 401k. If the market goes down, I would argue by all means, bump up your contribution to 10% or 12%, and then you’re buying more shares of discounted stock every single paycheck, and that’s an incredibly powerful tool for building eventual fortunes because the stocks will eventually recover, and when they do, you’ll have more shares because you bought them cheap.
Dana Taylor:
All right, Daniel, what could or should be done right now to stave off a financial crisis?
Daniel de Visé:
I’m not an economist. I think economists would argue that the tariff policy decisions of this year have been a little bit chaotic. Literally, business owners I’ve interviewed don’t know for sure what the tariff rate maybe is right now or what it’s going to be a month from now. So I guess if tariff policy were a little calmer, I suppose that would be better for the economy and for the prospects of a financial crisis.
The other thing is interest rates, right? If the Federal Reserve lowers interest rates, which they’re apparently planning to do, that sort of heats up the economy and encourages more spending. But if they do too much of that, if people start spending crazy because interest rates are way down, buying houses, taking out loans, that could cause a financial crisis. So that’s the other thing is Jerome Powell and the Fed have to be very careful about how much they lower interest rates, because yeah, they want to stimulate the economy, but you don’t want to overheat the economy either. So I guess those are the two macro things.
Dana Taylor:
Daniel, it’s great to talk to you, even if it is somewhat alarming. Thank you so much for being on The Excerpt.
Daniel de Visé:
It’s my pleasure.
Dana Taylor:
Thanks to our senior producer Kaely Monahan for production assistance. Our executive producer is Laura Beatty. Let us know what you think of this episode by sending a note to podcasts@usatoday.com. Thanks for listening. I’m Dana Taylor. I’ll be back tomorrow morning with another episode of USA TODAY’s The Excerpt.