Andy Wang, Managing Partner at Runnymede Capital Management, joined host Alex Coffey on Schwab Network’s Trading 360 on October 10, 2025, to discuss the key drivers that could determine whether the bull market continues or stalls as earnings season kicks off.

Watching Profit Margins Amid Inflation and Tariffs

Wang pointed to profit margins as a critical indicator in the weeks ahead.

“Profit margins are the shock absorbers of corporate America,” Wang said. “People are worried about potential potholes, but right now, companies are still riding with premium suspension.”

Despite rising tariffs and input costs, net profit margins for the S&P 500 remain near record highs, around 12%. That resilience, Wang noted, reflects how companies have adapted through supply-chain shifts, strategic price increases, and efficiency gains.

“Companies have been smart about protecting those margins,” he added. “In the coming weeks, I’ll be watching whether that discipline holds up.”

AI Spending Wave Continues to Surge

The conversation turned to artificial intelligence, where Wang described corporate investment as more than a trend.

“The artificial intelligence spending wave—it’s more like a tsunami,” he said.

According to industry and analyst estimates, the hyperscalers, large cloud and data center operators, are expected to boost capital expenditures by roughly 75% this quarter compared to last year. That massive increase underscores Wall Street’s ongoing enthusiasm for AI-driven growth.

But Wang cautioned that the market’s mood could shift at some point.

“The big question is: how long does Wall Street keep cheering the spending before it starts asking, ‘Where’s the profit?’ For now, that reckoning isn’t coming. The music’s still playing, and everyone’s still dancing.”

Upcoming earnings from Taiwan Semiconductor and Nvidia will serve as key checkpoints for gauging whether the AI boom still has legs.

The Week Ahead: Catalysts for Investors

As the first major week of earnings reports unfolds, big banks will provide the opening clues about the economy’s health.

Whether companies can maintain profit margins amid higher costs, and whether AI investments continue to pay off may set the tone for the rest of 2025.