Stocks (^DJI, ^IXIC, ^GSPC) are moving along, being pulled higher by the latest round of tech earnings. Akin to the concerns around markets already pricing in interest rate cuts by the Federal Reserve, Wall Street is wondering how long this rally on AI can go on and if it will broaden out.

Apollon Wealth Management CIO Eric Sterner comes onto Yahoo Finance Live to discuss the range of factors the market is taking account for.

"Analysts are really starting to pull back and I think we're just starting to feel the full effect of all these rate hikes," Sterner says. "We know the economy is slowing down, we know consumer spending is slowing down and labor costs are higher. So while I am optimistic on the market I think it's getting a little ahead of itself..."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

JULIE HYMAN: As we look at large tech earnings, we got to look, as I mentioned, at the Dow today, which is seeing more under pressure here. And as fourth quarter earnings are rolling in, our first guest today is not very optimistic about forward guidance this year.

Let's welcome in Eric Sterner of Apollon Wealth Management, CIO. So Eric, we've been talking about that big tech is sort of still pulling the market along, but why are you not as confident about the outlooks we're going to get more broadly from companies?

ERIC STERNER: Yeah, well, thanks for having me on the show. And I think there's a lot to be positive about and optimistic about in the market. But right now, it's just priced for perfection. It's priced for everything to go right between the market jumping ahead from the latest Fed meeting and pricing in six rate cuts to 12% corporate earnings growth.

And we just saw last quarter-- analysts, all the time, they'll downgrade or decrease their earnings per share estimates-- but last quarter, they decreased them by 6.8%, which is more than double the 10-year average of 3.3%. So analysts are really starting to pull back.

And I think we're just starting to feel the full effects of all these rate hikes. We know the economy is slowing down. We consumer spending is slowing down and labor costs are higher. So while I am optimistic on the market, I think it's getting a little ahead of itself. And I'll be anxious to hear some of that forward guidance in this earnings season amongst the S&P 500 companies.

JOSH LIPTON: And Eric, I'm also interested-- we were talking not so long ago about these bets that the rally would broad instead. I don't know if you heard, I was talking to Julie, we're right back to talking about the Magnificent Seven again, Eric. I'm just wondering, does that surprise you? And do you see that changing in the quarters ahead?