EXTREME Market Update: How to invest now 2026? (S&P 500 All Time High!)
Summary
Nolan opens by emphasizing his consistent strategy of dollar-cost averaging into S&P 500 ETFs, regardless of market highs or lows, based on extensive research and the historical frequency of new all-time highs. He notes the S&P 500 recently surpassed 7,200, driven by strong Q1 GDP (2%) fueled by AI-driven business investment, indicating the market is prioritizing earnings over macro risks. However, Nolan expresses "cautious optimism" and warns viewers to be careful and not to "FOMO in."
He highlights several significant macro factors: a hawkish-leaning Federal Reserve holding rates at 3.5-3.75% with essentially zero cuts priced in for 2026; a looming "oil shock" due to the Iran situation and a potential blockade of the Strait of Hormuz, driving gas prices up significantly; and concerns about OpenAI's missed revenue and user growth targets, which put the broader AI investment landscape on "shaky ground" for hyperscaler CapEx. Nolan believes these three factors represent a "violently fragile" setup if any turn for the worse.
Despite these headwinds, he discusses several key earnings reports:
Nolan concludes by reiterating his plan to continue dollar-cost averaging into broad ETFs. While individual stocks are currently volatile, he would consider buying "if they do drop far enough," specifically naming Microsoft and Amazon, as well as energy and quantum computing stocks. He advises viewers to "keep investing simplified" with broad, solid ETFs for now.
Mentioned Stocks
Reasoning: Amazon reported exceptional results, blowing revenue and earnings per share out of the water. AWS revenue was up 28% year-over-year, marking its fastest growth in over three years, and operating margin hit an all-time high of 13.1%. Nolan described it as the 'cleanest beat of the four hyperscalers' and 'set up best near-term among the group.' While Nolan would personally consider buying if the stock drops far enough, his strong positive analysis suggests a recommendation.
Reasoning: Meta beat on revenue (up 33% year-over-year) and earnings per share, with ad impressions up 19%. However, the company raised CapEx by about $145 billion, causing the stock to fall as much as 10%. This was highlighted as the 'cleanest example of the market punishing AI CAPEX without a clear monetization payoff,' with near-term sentiment dependent on whether ad revenue growth justifies the spend.
Reasoning: Microsoft's revenue grew 18% year-over-year, earnings per share were higher than expected, Azure grew 40%, and the AI business surpassed a $37 billion annual run rate. While the overall report was strong, CapEx is soaring, putting pressure on margins (narrowest since 2022). This CapEx pressure is seen as the 'swing factor' for the stock's near-term performance. Nolan would consider buying Microsoft if it drops far enough, indicating he is not recommending a buy at current levels.
Reasoning: Alphabet beat on revenue and earnings per share by a lot, with Google Cloud topping $20 billion (growing 63% year-over-year) and Search revenue accelerating. The company raised 2026 CapEx, and the strong cloud performance led to shares rising significantly, indicating the market's willingness to fund spending as long as cloud growth accelerates. Nolan categorized it as a company whose cloud revenue is accelerating fast enough to justify the spend.
Reasoning: Apple beat on overall revenue and earnings per share, with revenue climbing 17% year-over-year. However, iPhone revenue missed estimates. Nolan highlighted the upcoming Tim Cook to John Turnus CEO transition and the uncertainty of its AI roadmap as significant near-term variables, suggesting a mixed outlook.
Reasoning: Netflix reported a big revenue and net income beat. Although earnings were boosted by a one-time $2.8 billion termination fee, operating income still rose 18% with margins holding at 32% when adjusted. Nolan highlighted that consumer subscriptions and ad spend are still growing, indicating strong underlying business performance.
Reasoning: Caterpillar had a big earnings per share and revenue beat, with year-over-year EPS increasing. The construction segment revenue jumped 38% and the power and energy segment was up 22%, both driven by strong North American demand. Critically, Cat's power and energy segment saw brisk sales as electricity-hungry data centers heavily invest in power generation for AI, demonstrating that the AI infrastructure boom is real and spreading beyond tech.
Reasoning: JP Morgan reported a big earnings per share and revenue beat, with net income increasing. CEO Jamie Dimon noted the US economy's resilience, healthy consumers and businesses, supported by AI-driven capital investment. This was a very strong investment banking and trading print, confirming that capital markets activity is genuinely picking up, which is bullish for the financial sector.