How can you protect your 401(k) from market risks?

Plus: The world's biggest bank is trying to go full-on AI

Author

Cheddar's Big Business This Week
October 02, 2025

Just because the stock market keeps going up, you might feel it’s a good idea to protect your 401(k) and other market investments on the very slim chance that it might not continue to do so forever. Editor Peter Green sat down with Tony Roth, Chief Investment Officer at Wilmington Trust Investment Advisors. He has $90 billion under management, so how does he sleep soundly at night?

How does an individual investor with a 401 (k) protect themselves from market risk? 

In the face of uncertainty, you have to remember that the market generally will take into account all available information in most cases better than any one individual investor can. And what you're seeing is a market that's saying that, notwithstanding all the uncertainty, which is real, there is still enough tailwind that the markets continue to rise and that those companies that are doing well continue to rise. It's important to stay invested because, as we've seen, for an investor who decided that they were going to run for the hills, the market's up 15% this year in the U.S., 25% outside of the U.S., and even higher in the emerging world.

Unless you can see the whites of the eyes of the recession coming or some other calamitous outcome, I think it's important to stay invested. And right now we're not seeing the whites of the eyes. We're seeing conjecture around a lot of things that are different, that are concerning, but we're not seeing a train wreck in front of our eyes.

So what does the market look like in the short- and medium-term?

In the very short term, the catalysts are probably to the upside. The next catalyst for markets is probably going to be the earnings season coming up. The narrative that we're hearing from companies is that consumers are continuing to spend, and companies are continuing to spend on infrastructure and AI. So I would be looking for another strong earnings season. It kicks off with financials, and financials are benefiting from the expectations of rates coming down and increased M&A activity. Higher volatility in markets is good for financials, too.

And in the long term?

Longer term, it's a little harder to say because the economic experimentation of the current moment is largely unprecedented, and nobody knows how it’s going to turn out. There's probably two or three key things: One is the tariffs. Two is the shrinking of the labor force: We're shrinking the labor force by cutting off immigration, both legal and illegal. Three is we're systematically running the government with a much higher budget deficit than we ever have before, and that can't go on forever. So those are all what I would call economic experiments.

All of them stand to potentially harm the economy at some point. It's just hard to know how resilient the economy can be until those crows come home to roost, as it were. 

How might they harm the economy?

Tariffs are a tax on the consumer, and taxes on consumers are generally not good for the economy. It slows the economy down. The second concern is the lack of labor supply. Certainly, it will be inflationary, but one of the biggest outstanding questions is can AI create enough incremental productivity to make up for the shrinking of the labor force? Historically, immigration has been a real driver of economic growth, both in terms of labor supply and consumption.

The third part is simply the ability to run the government at such a large budget deficit, 6% of GDP. When you end up having to stimulate the economy, then you find yourself in a problem because you get to a point where the bond market starts to sell off and it pushes rates up and it's the exact opposite thing that you want. You need to actually increase fiscal spending.

When could any possible hurt come?

Those are policy experiments that I don't see coming home to roost in 2025. Right now, the market is responding to the rate outlook and the short end of the curve, the Fed cutting rates, the strength of the AI trade, with CapEx continuing to be quite strong. And the consumer seems to continue to be pretty good, notwithstanding the fact that the jobs market has this cloud over it. So the market's definitely looking at the glass half full versus the glass half empty, but that's not unusual. The markets generally will do so, if given the opportunity to put a constructive gloss on the future. Until one of those three policy risks that we talked about manifests itself in some nasty way.

So how might investors protect themselves against that?

I don't think the AI trade is over. I think you're going to see NVIDIA $NVDA, Amazon $AMZN, Google $GOOG, Microsoft $MSFT, Facebook $META, those five stocks are going to continue to perform well, and they're going to be trailed by Apple $AAPL, and I think that Tesla $TSLA will probably do the worst. And then if things look better next year for the broader economy, you'll get a rotation into other kinds of stocks. You'll see financials do well.

This interview has been edited and condensed for brevity and clarity.

—Peter S. Green

Poll result: You don’t think the market can just keep going up

Last week we asked BBTW readers, “Can the stock market keep going up and up and up and up?”. Here’s what you answered:

🟩🟩🟩🟩🟩🟩 Sure, but it might also go down and down and down on the way there (80%)

🟨⬜️⬜️⬜️⬜️⬜️ Yes. I'm an unqualified optimist. (20%)

via @beehiiv polls

Big Businesses mentioned this week:

This week, big business!

The usual suspects

  • CarTalk: EVs are up! As car buyers rush to get their federal $7,500 EV credit before the Trump Administration axes it at the end of the month, both GM $GM ( ▼ 3.15% ) and Ford $F ( ▼ 0.37% ) saw sales jump about 8% compared with the third quarter of 2024, with EV sales doubling for GM, and climbing 30% for Ford. Ford CEO Jim Farley said he wouldn’t be surprised if EV sales plummeted from a 10-12% share of all new car sales this year to under 5% when the incentives end. On Thursday, even sales-troubled Tesla $TSLA ( ▼ 5.12% ) saw its EV sales reach a new high of 497,099, though its shares were down by 5% in midday trading on Thursday.

  • Chase’s Banker Bots: JPMorganChase $JPM ( ▼ 0.98% ) , the world’s largest bank by market cap, is trying to go full-on AI. Already, the bank’s AI bots can build a venture capital pitch deck in 30 seconds. The goal is to have AI pilots for everything the bank does. That would eliminate a lot of jobs and boost profits. Yet most corporates have seen “zero” return from a collective $30 - $40 billion investment in AI, according to a July report from MIT. If JPMorgan can be the first bank to fully use AI, it will make some serious margins before the rest of the finance world catches up, but as Derek Waldron, JPMorgan chief analytics officer told CNBC, even with an IT budget of $18 billion a year, “There is a value gap between what the technology is capable of and the ability to fully capture that within an enterprise." 

  • Spirited reply: Spirit Airlines $FLYYQ ( ▼ 7.9% ) has a friend in its creditors, who are offering it $475 million in financing to stay in the sky for now. And it’s got a $150 credit line from aircraft leasing firm AerCap $AER ( ▲ 1.03% ) . Spirit last month filed for its second Chapter 11 bankruptcy in less than a year and is racing to cut costs, furloughing a third of its flight attendants, trying to squeeze $100 million from its pilot union, and cutting routes to try to return to profitability. 

  • The rental fix is in: Real estate rental-listing sites Redfin and Zillow $Z ( ▲ 1.99% ) got hit with lawsuits from the Feds and five state attorneys general, alleging they colluded to stop competition in the online housing rental ad market. In February 2025, Zillow paid Redfin and its parent Rocket Companies $RKT $100 million to shut down its advertising business for rentals in buildings with 25 or more apartments and transfer its clients to Zillow. The AGs argue that the deal is driving up the cost of rental listings, and noted that Zillow, Redfin, and CoStar’s $CSGP ( ▲ 0.41% )  Apartments.com control 85% of the rental ad market. 

  • Boeing’s new baby: More than 60 years after launching the 737, Boeing $BA ( ▲ 1.04% ) is now in early-stage development of a successor to the world’s most widely used passenger jet. More than 12,000 of the two-aisle 737s have been delivered since the first was assembled in 1967, but Boeing’s been losing business to Airbus $EADSY ( ▲ 1.27% ) without a narrower single-aisle plane that can be profitably flown on less frequented routes. Rolls-Royce is designing the engines, the Wall Street Journal reported. 

  • Coffee calamity: Starbucks $SBUX ( ▲ 3.26% ) is laying off another 900 corporate employees and closing close to 200 coffee shops it says can’t be made more inviting or aren’t making money. This comes after six consecutive quarters of declining same-store sales and is part of a larger trend of large corporations slashing jobs. Job openings fell to 7.2 million in July from a post-pandemic peak of 12.1 million in March 2022. Here’s what that looks like:

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The short stack

  • Fly-bye: Play time is over. Low-cost airline Play, based in Iceland, has stopped flying after weeks of poor ticket sales and a failed shift from trans-Atlantic flights to Southern European sun spots. Some 400 jobs have been lost, and passengers who hadn’t made it home got some tough love: “We kindly advise you to check flights with other airlines. Some carriers may offer special ‘rescue fares’ considering the circumstances,” Play said in a statement.

  • Charlie’s Ankle: Charlie Javice, the woman who defrauded JPMorganChase $JPM ( ▼ 0.98% ) of $175 million when she sold the bank her student financial aid startup in 2021, is trading in her ankle bracelet for 85 months in the federal pen. Javice’s company, Frank, was meant to help students fill out financial aid forms, and Chase saw it as a way to wrangle potentially wealthy future customers. But Javice feared her customer base was too thin and invented millions of fake customers to pad her rolls.

  • Buffett’s Chemical Brother: Warren Buffett’s Berkshire Hathaway $BRK.B ( ▼ 0.37% ) is poised to make its biggest deal in nearly three years, a $10 billion bid for the petrochemical business of Occidental Petroleum $OXY ( ▼ 7.31% ) . Berkshire is already the biggest shareholder in Occidental. Why now? Berkshire’s been sitting out the latest stock market surge with a pile of cash that hit $344 billion in June. Berkshire’s share price is up 10.4% this year. 

  • AI Jumpers: More than 20 top AI researchers have left jobs at big tech firms, including Google $GOOG, Meta $META ( ▲ 1.35% ) A, and OpenAI, to join a startup called Periodic Labs that aims to speed discoveries in physics, chemistry, and other fields, accelerating discoveries in science, not “automating white-collar work,” the New YorkTimes reports.

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Trumplandia

  • Dirty Jobs: Job numbers are not improving. As the government shutdown was expected to block the release of this week’s job numbers, payroll processor ADP said the economy lost 32,000 private sector jobs in September. Updated numbers showed the U.S. losing 3,000 jobs in August, when economists surveyed by the Wall Street Journal had expected an increase of 45,000. The biggest losses came in leisure and hospitality, with 19,000 cuts, while education and healthcare saw 33,000 jobs gained. Meanwhile, President Trump withdrew the nomination of Heritage Foundation economist E.J. Antoni, who he said would restore integrity to “rigged” job numbers released by the Bureau of Labor Statistics.

  • Shutdown at the OK Corral: There’s a good chance that Republicans won’t back off their plan to cut health care, the Democrats' red line, and the government shutdown could drag on. What would that cost? So far, the stock market has shrugged off a closure rising slightly, and gold hit a record of more than $3,900 an ounce. Furloughed workers eventually get paid, but they do stop spending temporarily. A budget office audit found that the 34-day government shutdown in the president’s first term cost the economy only $3 billion. The bigger hit could come if Trump follows through on his threat to fire hundreds of thousands of government workers.

  • The Drug Deal: President Trump announced Tuesday that he’s cut a deal with U.S. pharma giant Pfizer $PFE ( ▼ 0.5% ) to offer its drugs at prices charged in Europe, about 50% what is charged in the U.S. The cut-price drugs will be available from your corner dealer from a website called TrumpRx.com. But Medicaid patients already pay as little as $3 to $5 (or less) for their drugs, so the deal is unlikely to save money for the 90% of Americans with health insurance. "It is an environment where you can pretend to make significant changes that actually don't meaningfully improve the prices that Americans will pay for their drugs," Harvard med school professor Ameet Sarpatwari told NPR.

  • Government holdings: The Trump Administration is converting a $2.6 billion loan to Canada-based Lithium Americas $LAC, into a 5% stake in the firm’s lithium mining project in Nevada.

  • Trump Family Affairs: First son-in-law Jared Kushner's Affinity Partners is closing in on a deal with Saudi Arabia’s Public Investment Fund to take private U.S. video game maker Electronic Arts $EA ( ▼ 0.31% ) , in a $55 billion transaction that would be the largest ever buyout of a publicly traded company. The move is part of a Saudi push into sports and gambling, but online games and gambling hold massive amounts of data about U.S. citizens, and the takeover will likely need U.S. national security approval.

  • YouTube pays Trump: Alphabet $GOOG ( ▲ 0.36% ) subsidiary YouTube agreed to pay Pres. Trump $22 million after he claimed the platform’s decision to block him from posting after the January 6 attack on the Capitol was censorship. Meta $META ( ▲ 1.35% ) paid Trump $25 million, and X paid him $10 million for having taken down his accounts. “If he hadn’t been re-elected, we’d be in court forever,” Trump attorney John Coale told the New York Times. “Then the president gets re-elected and things look a lot better.” In August, several senators wrote to Alphabet CEO Sundar Pichai, warning that a settlement could violate federal anti-bribery laws. 

  • Apprentice Fed Chair Edition: The Supreme Court weighed has said Fed Governor Lisa Cooke can keep her job — for now. Trump said he fired Cooke after she was falsely accused of mortgage fraud, but there appears to be little letup in Trump’s campaign to create a compliant Fed that will slash interest rates and goose the economy ahead of the 2026 midterm elections. “It’s a time to exhale but not breathe easy,” Peter Conti-Brown, an expert on Fed governance at the University of Pennsylvania, told the New York Times.

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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.