Omar Aguilar, Schwab Asset Management CEO & CIO, joins 'Closing Bell Overtime' to talk the day's record market action.

Wall Street

The S&P 500 and Dow Jones Industrial Average closed at record highs, even as the Federal Reserve faces ongoing challenges. Market analyst Omar Aguilar from Schwab Asset Management highlighted that, despite the bullish sentiment, investors should remain cautious due to several emerging risks.

Key concerns include geopolitical tensions, potential instability in credit markets driven by increased capital expenditures and AI spending, and the effects of a recent Supreme Court tariff ruling that could impact both bond and equity markets. Aguilar advised investors to focus on long-term strategies and monitor market volatility closely in light of these developments.

S&P 500 and Dow close at record highs despite Fed turmoil

All right, so folks, as mentioned, there may be turmoil at the Federal Reserve, but that did not stop the S&P 500 from closing at record highs. It's just under 7,000, but even the hottest markets carry risks. So what are some of the big risks out there right now? Joining us now, Omar Aguilar. He is Schwab Asset Management, and he joins us now. Omar, you just heard Pippa talking about the metals and some of the risks to the metals. There are also risks to the stock market. It's a bull market, we know that, but what are some of those risks that your clients should be mindful of right now? Yes, Brian. Yeah, the market started the year strong. There is a lot of reasons why people seem to be cautiously optimistic. That's why we continue to work with our clients, but you're right. There are quite a bit of risks that we gotta be mindful of. I would probably say that starting with geopolitics, you know, that is how we started the year, but geopolitical risks usually tend to have a significant amount of influence on short-term volatility that obviously impacts the way that markets trade, and therefore, our advice to clients is to continue to focus on the long-term and try to reduce the emphasis on the short-term. The second piece has to do with what we think is probably the highest risk this year, which is credit. I think we have all discussed the ability of that incredibly growth of AI spending and capital expenditures for the majority of companies beyond technology is set to expand, but there is a funding need for those CapEx expansions that tends to be going to the private markets, and I think what we believe is while the credit market has been fairly stable, there's gonna be something for us to be watching over the course of the year, and lastly, consumer confidence. In lieu of all the headlines on all these significant challenges we see throughout the year, whether it's inflation news, whether it's political news, whether it's midterm elections, whether it's everything that has to do with the way that we operate in this economy, you know, the consumer confidence usually tends to take a little bit of a breather when there is a lot of uncertainty. That tariff, and I don't wanna put you too far down the political mindset, but I would never wanna do that to anybody, Omar, I get it, but that Supreme Court tariff ruling is a big deal, not just for tariffs, but some would suggest for the markets because that removes hundreds of billions in revenue that the bond market may be counting on. You take those away, the bond market shifts, that impacts the stock market. Are you guys watching that closely? Oh, we're definitely watching the ruling. You know, anything that may happen, you know, this week in terms of the ruling, either way will obviously have impact on markets, and you're right. You know, and depending on the way that this goes, this may have a reverse effect on some of the bond market and equity market where some of those things will have to repay back, some of those things will actually have effects in, but which what we anticipate is regarding of that, there will be volatility in both markets at the end of this week and early into next week.

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Breakdown