Kevin Mahn, Hennion & Walsh Asset Management president and CIO discusses the day's record market action and the 6-month anniversary of the tariff crash.

Wall Street

The S&P 500 and Nasdaq have both achieved record closing highs, marking a significant recovery since the tariff crash low six months ago. The S&P 500 has risen by 35% in that period, with analysts noting that historical trends suggest continued growth is possible, though volatility may return.

Market experts attribute the optimism to expectations of further Federal Reserve interest rate cuts and substantial investment in AI infrastructure. While current valuations are above historical averages and some caution is advised, opportunities remain in sectors such as AI, aerospace, defense, and smaller-cap biotech. Diversification into municipal bonds and international stocks is also recommended, as these areas may offer additional growth potential.

S&P 500 and Nasdaq both notch record closes

Well, we mentioned it before, but today is the six-month anniversary of the tariff crash low. The S&P 500 is up 35% since then. Our next guest says a return of volatility would not be surprising, but growth opportunities still exist. So let's bring in Hennigan Walsh, Asset Management President and CIO Kevin Mond. Kevin, it's great to have you back here. Thank you, Morgan. On set. I mean, 35% gain in the S&P in six months. Who would have thunk it? Who would have thunk it? But if history serves as a guide, investors have multiple reasons to be optimistic ahead. First, another anniversary. This current bull market is hitting its three-year mark. And going back over the last 50 years, each bull market that hit its three-year milestone continued to move forward from there with an average duration of eight years. Perhaps we got another five years ahead. Second reason involves the Federal Reserve. Going back over the last 40 years, the Federal Reserve has cut interest rates on eight different instances when they paused for six months or more, just as they did in September. Now, in half of those instances, the economy moved into recession. That's not our base case here. In the other half of those instances, the stock market moved higher by about 8% over the next six months and 15% over the next 12 months. So there are reasons to be optimistic ahead. But I wouldn't be surprised to see some more volatility ahead. When that volatility comes, money will come off the sidelines. It will prevent those short-term pullbacks from coming corrections. And I think we melt upward as we close the year of 2025. Why do you think we haven't seen so much volatility as of late? Is it just because we're waiting for our next big catalyst? I believe right now that the market is optimistic that the Fed's going to cut interest rates two more times this year. And the longer the shutdown takes, the more likely that at least we get another rate cut in October because they have no more data to operate upon. Secondly, we continue to hear more and more announcements about this AI infrastructure build-out. Even NVIDIA CEO Jensen Wan has suggested by the end of this decade, we could see $3 to $4 trillion in AI infrastructure investment. We're around $600 billion right now. That's a lot more money being spent ahead. So if you're looking to follow the money, look to lean into AI infrastructure plays and maybe even some aerospace and defense plays. Kevin, what does it mean to you in this market that good news seems to matter so much, especially if it's coming from the mouths of Sam Altman or Jensen Wan, but the bad news doesn't stick to the pen? It's like a Teflon market. I mean, is that a challenging or perhaps troubling signal about the optimism, or is it a sense that the market can power through? Over the short term, I believe it's a sense that the market can power through. Over the long term, I see reasons to be concerned. Look at the current valuations of the S&P 500 right now. They're both trading above their 5 and 10-year averages. We've had over 30 record closes this year, on top of 57 record closes last year. Investors shouldn't consider that type of growth to continue that much longer. But that doesn't mean there aren't growth opportunities underlying these markets. And I think if you continue to follow the money, as I mentioned earlier, you're going to find those pockets of growth opportunities. But now may be the time, John, to diversify and look to some of those undervalued areas of the market. Health care is one of them. But I don't believe it's large cap pharmaceutical that you want to lean into. You want to lean into smaller cap biotech, because M&A activity is going to pick up there as large cap pharma continues to get hit by headwinds of price controls and also patent expirations. That feels dangerous, though, Kevin, in a market where the small caps have not responded the way so many have hoped or expected, where bigger has been better. And even if you look outside of stocks, real estate is in short supply and at valuation highs. Gold is trading above $4,000. The diversification pipelines of the past just don't seem to be available in the same way. And another area to look at for diversification, though, John, is bonds. One area of bonds right now, municipal bonds have underperformed other fixed income asset classes year to date. But that's because so many municipal issuers rushed forward with new issuance because they were fearful that the tax exempt provision of municipal bonds would be taken away in the one big, beautiful bill act. That wasn't the case. And now we're seeing less supply ahead. And I don't care what the asset class or what the security type is. Anytime there's less supply and increasing demand, pricers are going to move higher. So bonds might be a good area to diversify into in addition to international stocks, which continue to outperform U.S. stocks, even though no one pretty much is talking about them.

President Trump announced the “first phase” of a deal between Israel and Hamas to end the two-year Gaza war. Under the plan, all hostages are expected to be released soon, and Israel will pull troops back to an agreed line, marking initial steps toward a lasting peace.

Sharm El-Sheikh

What we know about first phase of Israel-Hamas deal

The ongoing U.S. government shutdown has led to major delays and staffing shortages at airports, raising safety concerns. The flight attendants’ union says reduced oversight and overworked crews are putting additional strain on the aviation system.

Washington

Aviation less safe during any government shutdown, union warns

Earlier this week, Transportation Secretary Sean Duffy said one of the reasons for staffing shortages at airports is that a growing number of air traffic controllers have been calling in sick. Those controllers don't know when they'll get their next paycheck amid the government shutdown.

Los Angeles International Airport

Why the government shutdown is playing into travel delays

President Trump says Israel and Hamas have reached an agreement for Hamas to release all remaining hostages and for Israel to withdraw its forces to an "agreed upon line."

Middle East Conflict

Israel and Hamas reach deal to release all hostages, Trump says

President Trump says he might travel to the Middle East as soon as this weekend as Israel and Hamas continue indirect negotiations to end the war in Gaza. CBS News senior White House and political correspondent Ed O'Keefe has the details.

Cairo

Trump 'may' go to Egypt or Gaza amid Israel-Hamas peace

A 29-year-old Florida man has been arrested on suspicion of arson in connection with the deadly Palisades Fire that scorched parts of Los Angeles earlier this year, officials said Wednesday.

Los Angeles

Man arrested for allegedly starting Palisades Fire in California

Former FBI Director James Comey pleaded not guilty to two counts in federal court on Wednesday (October 8) after being indicted by the U.S. Department of Justice in September.

Alexandria

James Comey pleads not guilty to charges brought by Trump's DOJ

Some air traffic control staffing issues and bad weather are affecting flight delays as the government shutdown enters its eighth day. CBS News senior transportation correspondent Kris Van Cleave has more details.

Government shutdown, staffing issues lead to flight delays

Hamas’ lead negotiator says the group needs guarantees of a lasting peace as indirect talks with Israel to reach an agreement over the implementation of the first phase of Trump’s peace plan for Gaza enter the third day.

Hamas says it is ready to reach Gaza deal but needs 'real' guarantees

Sebastien Lecornu to hold two days of talks to try to shore up cross-party support for his collapsed government.

Paris

Outgoing French PM launches last bid to quell political crisis

Israel is pressing forward with its attacks across the Gaza Strip. 
Its forces have targeted displaced families in Khan Younis, killing a mother and her children. Several Palestinians have also been killed in a strike on Al Shati refugee camp, in Gaza City.

Jerusalem

Israeli strikes intensify in Gaza despite ceasefire talks

Palestinian solidarity demonstrators have marched through Mexico and Chile’s capitals, demanding their governments sever diplomatic ties with Israel. The protests mark the second anniversary of Israel's war on Gaza.

Mexico City

Palestinian solidarity protests sweep Latin America

National Guard troops are preparing to be deployed to Chicago. Members of the Texas National Guard arrived just outside the city on Tuesday. The move is being criticized as an abuse of presidential authority.

Chicago

National Guard troops preparing to deploy in Chicago

U.S. President Donald Trump welcomed Canadian Prime Minister Mark Carney to the White House, where he promised to treat Canada fairly in trade talks, but was less committed to a continental trade deal that also includes Mexico.

Global Tariffs

Trump promises trade fairness for Canada during Carney's visit

From Tel Aviv to the Nova Music Festival site, Israelis gathered to remember those who were killed in the October 2023 Hamas attack.

Tel Aviv-Yafo

Israelis remember victims two years after Hamas attack

Saudi Arabia's Riyadh Comedy Festival is attracting global stars including Dave Chappelle, Pete Davidson and Kevin Hart, with reports that some are being paid more than $1 million each. The event is part of Crown Prince Mohammed bin Salman's push to rebrand the conservative kingdom through sports and entertainment.

Riyadh

Riyadh Comedy Festival draws top U.S. comedians amid controversy

Three U.S.-based scientists have won the Nobel Prize in physics for their work on quantum mechanics. The physics award is the second 2025 Nobel Prize to be announced this week.

Stockholm

Three U.S.-based scientists win Nobel Prize in physics

As the war in Gaza reaches its two-year mark, Israel and Hamas continue negotiations in Egypt. Talks are centered on a proposed ceasefire deal, which includes a partial Israeli withdrawal from Gaza and a hostage-prisoner exchange.

Israel and Hamas resume Gaza ceasefire talks in Egypt

Israel has deported activist Greta Thunberg along with 170 others who were detained after Israeli forces intercepted a flotilla attempting to deliver aid to Gaza last week. Some of those deported in recent days have reported mistreatment, allegations that Israel has denied.

Israel deports Greta Thunberg after Gaza Flotilla interception

Leaders in the U.S. state of Illinois are taking President Donald Trump to court, looking to stop the deployment of hundreds of National Guard troops to the streets of Chicago. The White House argues that soldiers are needed to prevent so-called lawlessness.

Chicago declares 'ICE Free Zones' amid clashes over raids

French President Emmanuel Macron has given Prime Minister Sebastien Lecornu 48 hours to stabilize the government following his sudden resignation. Lecornu stepped down hours after naming his cabinet, amid criticism and growing political instability in a parliament without a clear majority.

Macron gives Lecornu two days to salvage government after resignation

Microchip maker AMD got a huge boost in the race to supply the artificial intelligence revolution. OpenAI, the company behind major AI platform ChatGPT, announced a deal for AMD to provide the AI startup with its high-performance processing chips starting next year.

Santa Clara

Rise of AI

AI chipmaker AMD strikes major deal with OpenAI

It's a race against time to save the remaining 200 or so stranded climbers on Mount Everest after a massive storm dumped at least three feet of snow over the weekend.

Gorakshep

About 200 Mount Everest climbers still stranded

Clashes broke out at ICE facilities in Chicago and Portland after President Trump ordered National Guard troops into both cities. The move has intensified tensions between federal authorities and local officials amid ongoing protests.

Clashes erupt as Trump deploys National Guard

Former NFL quarterback and Fox Sports analyst Mark Sanchez was charged with felony battery involving serious bodily injury, and could face up to six years in jail, according to Marion County Prosecutor Ryan Mears.

Indianapolis

Mark Sanchez charged with felony, could face up to 6 years in jail

Illinois Gov. JB Pritzker and Chicago Mayor Brandon Johnson announced on Monday a lawsuit against the Trump administration over plans to deploy the National Guard to Chicago.

Illinois, Chicago sue Trump over National Guard deployment

A selloff in French markets gathered pace after French media reports that Prime Minister Sebastien Lecornu has resigned. French stocks fell sharply, government bond yields were up 8 basis points and the euro was last down 0.65% at $1.1667.

French markets tumble after PM Lecornu resigns

Former NFL quarterback Mark Sanchez has been charged with battery, intoxication, and unlawful entry after allegedly attacking a 69-year-old truck driver in Indianapolis. The driver stabbed Sanchez in self-defense, believing his life was in danger. Sanchez is currently hospitalised.

Ex-NFL star Mark Sanchez faces criminal charges in alleged assault

U.S. President Donald Trump's battle with Democratic-led cities is heating up after 200 California National Guard troops have been reassigned to Oregon, despite a judge blocking the deployment to Portland.

Portland

Trump sends National Guard to Oregon despite court block

Israeli planes and tanks pounded areas across the Gaza Strip overnight and on Sunday, destroying several residential buildings, witnesses said, as Palestinians hoped a U.S. plan to end the war would soon ease their suffering.

Breakdown