Apollo CEO warns there’s now a 35% chance of a major market shock amid AI-driven upheaval. How to stay afloat

Apollo CEO warns there’s now a 35% chance of a major market shock amid AI-driven upheaval. How to stay afloat Thomas Kent Sun, May 10, 2026 at 12:30 AM GMT+7 8 min read APO Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. Apollo Global Management CEO Marc Rowan warned that Wall Street may be underestimating the risk of a major "out of the box" economic shock, suggesting a 30% to 35% probability of a significant disruption despite current market highs (1). "Everything we see in front of us is actually quite strong," Rowan said. But there is "a much greater chance, in our opinion, of out-of-sideline results." Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s how to fix it ASAP The IRS usually taxes gold as a collectible — but this little-known strategy lets you hold physical bullion tax-free. Get your free guide from Priority Gold Speaking after Apollo surpassed $1 trillion in assets, Rowan pointed to a combination of inflationary policies, like geopolitical instability and AI-driven labor market shifts. In response, the firm is positioning defensively by upgrading credit quality and building cash reserves, while Rowan further cautioned against aggressive practices and "contagion" risks within the insurance industry. A contagion risk refers to the cumulative effect of shocks and financial crises from one country, market, or institution to the next (2). They spread, like an illness, due to growing interconnectivity between financial systems. The end result, according to Rowan? Direct intervention from a doctor, which in this case would be regulators and banks. Apollo isn't some niche hedge fund making speculative bets on the sidelines of the economy — it oversees roughly $1 trillion in assets and sits at the epicenter of interconnectivity between private credit, insurance and retirement investing (3). Rowan said Apollo is already positioning more defensively. The firm has upgraded the credit quality of its fixed-income portfolio, reduced exposure to riskier sectors like software and built up roughly $40 billion in cash inside its insurance operations. "It means we're investing with an eye toward protecting our capital and making sure that we are here to ride through cycles if there are corrections, which we quite frankly expect," Rowan said. Rowan suggested many current economic policies could keep price pressures elevated even if inflation data appears relatively stable today. "Almost everything we're doing, whether intentional or not, has the potential to be inflationary," Rowan said, referring to policies including tariffs and immigration restrictions. "Restricting the supply of goods, restricting the supply of labor and the free movement of goods and labor — maybe for good and valid reasons that need to be done — are all inflationary in the short term, even if we are not seeing signs of it," he added. Read More: Robert Kiyosaki warned of a 'Greater Depression' — with millions of Americans going poor. Was he right? At the same time, Rowan believes artificial intelligence could dramatically reshape the labor market in ways many investors still are not fully accounting for. "Almost every job will be enhanced or replaced," Rowan said. "We're going to see a complete flip — blue-collar ascendancy and white-collar stress." The rise of blue-collar jobs and the fall of white-collar jobs due to AI has been hotly discussed in the media. Even learning institutions like Pearson have weighed in on the subject, going as far as to say that anywhere between 30% to 46% of hours spent on white-collar work could be done by generative AI (4). For ordinary investors, the broader takeaway may not be to abandon markets altogether, but rather to think more carefully about diversification and downside protection amid elevated uncertainty. HSBC Private Bank and Premier Wealth experts surveyed 10,000 "affluent individuals" across a dozen markets and found that the most successful investors prioritized security by building more diversified portfolios (5). "Build shock absorbers, not sandbags," Willem Sels, the Global Chief Investment Officer of HSBC, wrote in the survey report. "Combine bonds, gold, infrastructure, real estate and hedge strategies so at least one protector is working in every market scenario." That way, when there's volatility somewhere in the market, you might not feel the contagions quite as badly in your portfolio. Gold serves as a critical hedge against uncertainty by providing a shield against currency devaluation, inflation and other systemic financial risks. Unlike fiat currency, gold can't be printed at will and tends to preserve its value in a market downturn. In other words, it's a way to manage market risks (6). One powerful strategy offering sign

Apollo CEO warns there’s now a 35% chance of a major market shock amid AI-driven upheaval. How to stay afloat

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