As Nvidia prepares to report its first quarter earnings this week, Charles Schwab Chief Investment Strategist Liz Ann Sonders joins Morning Brief to discuss how the bullish AI sentiment is driving the broader market (^DJI,^GSPC, ^IXIC).

Sonders calls Nvidia a "poster child for the AI boom," adding that it is the best performer within the "Magnificent Seven."

"I think it's important we know the bar is set high, so I think an extrapolation problem could develop, but whether that starts tomorrow is hard to say," Sonders warns. She says there has been "much more dispersion" within the Magnificent Seven. However, she still expects a larger-cap bias to exist within the market.

With the Dow Jones and Nasdaq recently hitting record highs, Sonders points to three sectors that are outperforming ratings: financials, materials, and energy. On the other hand, she says that real estate and consumer discretionary are underperforming while everything else is neutral.

As all eyes are on the Federal Reserve's next interest rate move, Sonders calls the speculation of a rate cut a "parlor game."

"Data dependency means that it's going to depend on the data. I think 'patience' is the word of the day," she says.

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This post was written by Melanie Riehl