The S&P 500 Index at record territory can make investors feel late to the rally. Art Hogan, chief market strategist at B. Riley Wealth, sees a different risk: reacting to the index level by selling technology too early, or by missing opportunities in financials, healthcare, and industrials that lagged during September. Hogan — a stock market vete for more than 30 years — put his case for staying invested in sector rotation, a shift in which groups lead the market, rather than an expectation that every stock will rise together.
Hogan raised his S&P 500 target to 8,000 from 7,800 after the index reached an all-time high above 7,800. (The benchmark closed at 7,811.54 on October 9, 2026.) He based the new target on a $345 estimate for the index’s earnings this year, below the $353 median estimate he cited, and a normal five-year average valuation multiple. For investors, though, the more useful part of his argument is the decision process behind that target: own a broad exposure if timing sector leadership is not the goal, add selectively when strong companies fall for expectation-driven reasons, and become more cautious only if higher interest rates or crude oil prices begin to damage earnings.
Here is how Hogan’s approach separates a normal rotation from a threat to the broader market.
Why a record-high S&P 500 can still have lagging sectors
The index can hide very different experiences beneath the surface. Hogan said technology did much of the work in September, keeping the S&P 500 roughly unchanged even as the average stock fell 16% during the month. He identified financials, healthcare, and industrials as groups that were hit hard enough to enter earnings season with lower expectations than technology.
That matters because stock prices reflect expectations as much as reported results. A company whose shares have had a powerful run may face a harder test after earnings: strong revenue, profit, and earnings guidance can still disappoint investors if the results do not exceed already lofty assumptions. A lagging sector may have an easier hurdle if investors have become too pessimistic about its prospects.
Hogan’s forecast does not depend on technology collapsing. He expects a healthier change in leadership, with sectors outside technology contributing more to market gains. That is a narrower claim than saying every beaten-down sector is a bargain. It is an argument that earnings can reset investors’ expectations differently across the market.
I think that you don’t want to trim just because earnings probably has that bumpy ride for you. I think that the go-forward estimates for technology writ large, not just the AI darlings, all the technology looks very positive.
Art Hogan, when asked whether investors with heavy technology exposure should trim their holdings before the earnings season
Hogan’s answer runs against a common impulse at market highs: Sell a winning position before an event that may produce volatility. His reasoning was that an earnings-related decline in technology could be temporary if longer-term profit expectations remain intact. He said investors trying to anticipate every short-term reaction may miss the recovery that can follow over the next month.
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How Art Hogan would use a technology pullback
For an investor who already has a diversified portfolio and wants to own individual technology stocks, Hogan drew a distinction between abandoning the sector and buying companies at better prices after a pullback. He said Microsoft and Amazon were among the stocks he would consider on weakness. He also named Apple, while acknowledging that the stock might not pull back.
His Amazon case centered on Amazon Web Services. Hogan argued that smaller businesses may use Amazon Web Services to gain access to artificial intelligence capabilities, making the cloud business an important part of Amazon’s longer-term AI opportunity. His Apple view cited the company’s partnerships rather than a costly effort to build its own large language model, as well as demand for the iPhone 18 Pro.
Still, none of those company views turn a price decline into an automatic buy signal. A stock can fall because investors are taking profits after a strong run, but it can also fall because sales, margins, or future earnings guidance have deteriorated. The practical task is to identify whether the earnings report challenges the company’s long-term thesis or merely resets a high near-term expectation.
That distinction is especially important for investors who do not want to trade around every quarterly report. Hogan said he would maintain at least an equal-weight exposure to technology, meaning a portfolio weight roughly in line with the sector’s representation in a benchmark, rather than trying to make an all-or-nothing call before results arrive.
How a barbell approach combines technology with lagging sectors
Hogan’s preferred structure is a barbell approach: pairing exposure to large technology companies with positions in sectors that have been left behind. The aim is to avoid making a portfolio dependent on one market narrative. If technology remains strong, the technology side participates. If earnings shift attention toward lower-priced financials, healthcare companies, or industrial businesses connected to the AI buildout, the other side has room to contribute.
Among financials, Hogan pointed to JPMorgan Chase after a September decline of better than 8%. He described the bank as a buying opportunity and said concerns about AI disrupting financial services had contributed to the pullback. The investor takeaway is not that a monthly decline proves a stock is cheap. It is that a lower price can warrant fresh analysis when the underlying business case has not changed.
In healthcare, Hogan favored Eli Lilly. He cited Phase 3 results for the company’s latest GLP-1 treatment iteration and eight acquisitions this year as reasons he saw a broader business opportunity. Phase 3 is generally the late-stage testing period for an experimental treatment before regulators consider approval. The transcript does not provide details on the studies, acquisitions, or their financial effect, so investors would need to review company disclosures before relying on that thesis.
Hogan also referred to industrial companies adjacent to AI, without naming a specific industrial stock. That limitation matters. “AI-adjacent” can cover very different businesses, from equipment suppliers to power-related companies, and the label alone does not establish earnings strength or an attractive valuation.
Why broad S&P 500 exposure can reduce sector-timing pressure
Investors who do not want to choose among sectors can express a view through the S&P 500 itself, Hogan said. He cited the index trading at 19.3 times expected earnings over the next 12 months. A multiple is the price investors pay relative to a company’s or index’s earnings, while a higher multiple generally means investors are paying more for each dollar of expected profit.
Hogan’s argument for the index was tied to the rotation pattern. In his account, technology fell out of favor in the first quarter, returned in the second quarter, and leadership broadened again during the summer. The S&P 500 remained comparatively stable because weakness in one group was often offset by strength elsewhere.
A broad index fund does not eliminate concentration risk. Hogan said the S&P 500 had about 38% exposure to technology and artificial intelligence. Investors using the index as a simple solution should understand that substantial technology weight, especially if they also own individual positions in Microsoft, Amazon, Apple, Nvidia, or other large technology companies. Combining an index fund with several of its biggest holdings can create more concentration than a portfolio appears to have.
Which earnings and interest-rate signals could change the outlook
Hogan’s bullish view has conditions. The market risk he emphasized was not simply a high oil price or a high 10-year Treasury yield in isolation. His concern was that persistently higher energy costs and borrowing costs could slow economic growth enough to damage earnings growth.
He said a possible warning would emerge if companies beat third-quarter estimates but then reduced fourth-quarter earnings guidance across the S&P 500. Hogan described that as potentially the first decline in guidance in five quarters. In his framework, that would signal that earnings estimates were no longer rising at the pace investors had become accustomed to.
It stops it when it slows economic growth down enough to stop the earnings growth that we’re seeing.
Art Hogan, when asked whether higher oil prices and geopolitical risks could halt the bull market
Hogan’s threshold clarifies the difference between a market headwind and a broken investment case. Higher yields can pressure stock valuations because future profits are discounted at a higher rate, and they can increase borrowing costs for households and businesses. The broader rally becomes more vulnerable when those forces lead to weaker spending, slower growth, and lower earnings expectations.
Hogan said he would become more defensive if fourth-quarter earnings guidance broadly weakened. His version of defensive investing was not moving entirely to cash. He would reduce exposure to interest-rate-sensitive assets, including small caps, consumer staples, and utilities, while considering an alternative asset such as gold.
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Why small caps need lower yields before a stronger rebound
Hogan was more cautious on small caps than on large-company financials and technology. Small caps are shares of publicly traded companies with small market capitalization. He said they tend to borrow more than large-cap companies and are therefore more interest-rate sensitive, meaning their finances and valuations can be more affected when borrowing costs rise.
He also noted that about half of the roughly 1,950 companies in the Russell 2000 Index were unprofitable. That composition can make the group more vulnerable when rates rise because companies without current profits often depend more on outside funding. Hogan said he would wait for yields to begin falling before becoming more constructive on small caps.
He described a possible catalyst as a pullback in the 10-year yield from a 5.5% peak toward 5.25%. While that is a market observation, it is not a universal trigger to invest. A decline in yields can occur if inflation eases, or if there are concerning factors, such as weakening economic growth. Investors considering small caps should look at the reason yields are moving, as well as the direction.
How gold and Bitcoin fit into a defensive portfolio
Hogan favored gold as an alternative investment if the market’s earnings outlook weakened. He cited continuing central-bank demand, demand from older investors seeking an alternative to real estate or cryptocurrencies, and easier access through SPDR Gold Shares. He said gold had bounced from its 200-day moving average — a technical indicator that averages the prior 200 trading days of prices.
His view on Bitcoin was more limited. Hogan said the asset had made a large move from a $65,000 low back to above $80,000, but he did not claim confidence in a fundamental valuation framework. (Bitcoin was trading above $83,000 recently.) He characterized Bitcoin as highly volatile and outside his area of expertise. That restraint is useful: A technical chart setup can describe price behavior, but it doesn’t substitute for a clear understanding of an asset’s risks.
The takeaway for S&P 500 investors at new highs
Hogan’s central message is that the S&P 500 at a record high doesn’t, by itself, require profit-taking or a move to cash. For long-term, buy-and-hold investors, broad S&P 500 exposure may be the simplest way to stay invested through changing sector leadership. That approach still calls for checking whether individual holdings have created an unintended technology-heavy portfolio.
For long-term, buy-and-hold investors who prefer individual stocks, Hogan’s barbell approach offers a more active framework: Maintain technology exposure, consider strong companies after expectation-driven pullbacks, and look for earnings-supported opportunities among financials, healthcare, and industrials. The trade-off is that stock selection requires more work and creates more company-specific risk than an index fund.
The signal that would justify a more defensive posture, in Hogan’s view, is a weakening in earnings guidance alongside rates that would be high enough to slow economic growth. Until that evidence appears, his decision procedure favors staying invested rather than trying to predict each sector’s next turn. Investors should match that approach to their own time horizon, diversification, and tolerance for losses before changing a portfolio.
Hogan’s target of 8,000 on the S&P 500 is a forecast, not a guarantee. The more durable lesson from his playbook is to watch the connection between rates, growth, and earnings, while recognizing that a market index can remain resilient even as leadership changes beneath it.
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