Closing Bell - Closing Bell 10/10/25

Episode Date: October 10, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Brian, thanks so much. Welcome to closing bell. I'm Scott Wobner live from Post 9 right here at the New York Stock Exchange. This maker breakout begins with trade tensions. The president threatening China with more tariffs. You know by now what stocks are doing. They are unsettled. They've remained that way for much of the afternoon. There's your picture now. It is the NASDAQ. Clearly the worst here down two and two thirds percent. S&P is off by 2% as well. It's being driven lower by chip stocks. We're going to have much more. on all of that coming up. But NVIDIA and AMD, Mike Bron, Broadcom, just to name a handful in that group. There's AMD down about 6%. Most of the mega caps are down as well as we come on the air here with one hour to go. We're keeping an eye on the stocks

of business development companies as well, or BDCs. Very much in the news lately. Some high-profile bankruptcies in the private loan market have weighed on shares of several names. We'll have a special report coming up everything you need to know.

know about this much talked about group. It does take us to our talk of the tape, those suddenly escalating China tensions. Let's get to our Amon Javers with the very latest from Washington. It was reporting, Amon, that you did earlier, a social media post from the president that's so unsettled this market. Yeah, that's right, Scott. And what's ironic about this situation we're in this afternoon is really all we have to go on now is that social media post. No confirmation from the White House or from any government agency about any specific actions that the U.S. government is taking in response. But here's that post, if we can pull it up, that the president made earlier, a very lengthy post, but a key part is, dependent on what

China says about the hostile order that they have put out, I will be forced as president of the United States of America to financially counter their move for every element that they have been able to monopolize. We have, too. So the president's saying that China is very hostile, saying he's prepared to use elements that the U.S. has a monopoly on to respond to the Chinese efforts on rare earths, also threatening massive tariffs on China and threatening to cancel that summit that he had with Xi Jinping. He says one of the policies that we are calculating at this moment is a massive increase of tariffs on the Chinese products coming into the United States of America.

There are many other countermeasures that are likewise under serious consideration. But Scott, as I said at the outset, all we have is this social media post so far. No specifics in terms of what those countermeasures are. the president is talking about that the U.S. has a monopoly on, that he might put restrictions on export to China. No confirmation that the president has, in fact, canceled that expected summit with Xi Jinping. Basically, that social media post rattled the markets, and that's all we got to go on. Yeah, Amen, thanks for the update. Amon Javvers from our bureau in Washington, I showed you some of those chip names right in the open of our program today. AMD's down near

6% as we speak. Microns down near 5. Broadcom under pressure as well, right in the storm clearly of these tensions with China. To begin with, Mackenzie Sagalos joins us now with more. Hey, Mac. Hey, Scott. The chip stocks are getting slammed is that U.S.-China trade fight flares up yet again. The Vanek's semiconductor ETF down more than 4% this session. And you said at AMD and Qualcomm both off by about 6%. Invidia is also trading lower. Qualcomm is taking the biggest hit After Beijing's top regulator opened an antitrust probe into its 2024 acquisition of auto talks, that's an Israeli firm that makes vehicle-to-vehicle communication chips, the company has a lot at stake in China.

Almost half its revenue comes from Chinese customers. Qualcomm has warned in SEC filings that worsening trade friction could drive those partners to build their own chips or turn to local competitors, a trend that is already gaining momentum under Beijing's push for chip independence under its made-in-China 2025 campaign. And this investigation adds to a broader crackdown on American tech names. Last month, China accused NVIDIA of antitrust violations tied to a 2020 deal and reportedly curbed AI chip purchases from U.S. suppliers.

And with President Trump now threatening countermeasures over Beijing's rare earth export bans, those are critical to defense in semiconductor manufacturing. The sell-off, it is only deepening, Scott. All right, McKenzie, thank you for the update there. We'll watch all of those stocks over this final stretch. Let's now bring in CNBC contributors, Trivary, it's Adam Parker, Payne Capital's Courtney Garcia. It's good to have you both. I mean, we are due for something, right?

I mean, the S&P had literally gone 33 trading sessions without a 1% move in either direction. So something like this was bound to happen sooner or later. This is just all that's old is new again because we hadn't talked about tariffs in a while, and here we are. Yeah, I mean, I guess I got an email from a buddy today saying I didn't even know the stock market was allowed to go down. You know, I thought it was, you know, kind of half-kitting. And we were together on the election night, about 10 yards over there, talking about tariffs in China, and here we are again. I mean, I think the consensus view is that this two will pass,

that, you know, things were overbought, we've had a big move. You know, you get a little bit of scare. You're going to get a sell-off. But people still think earnings season is going to be pretty solid, and they can still look to, you know, growth and margin expansion. So I don't think people are worried this is, you know, the beginning of the end. I just think it's a new jerk response to, hey, there's risks out there and we got to pay attention and we got to balance the portfolio a little bit.

Some people have been, you know, waiting in quotes for a sell-off. It's been uncomfortable for some to think about putting new money to work in the market when valuations are rich relative to history. But now they'll look for any excuse to maybe get in and follow what some suggest is going to to be a chase between now and the end of the year? Oh, absolutely, because we've talked a lot about the amount of cash that's on the sidelines right now. There's almost $7.4 trillion that's sitting in money markets. But that's not all just retail investors. A lot of that is institutional money, and they have been sitting with too much cash in their portfolios,

because a lot of that happened after Q1 and Q2 with all the uncertainty and tariffs. But now you're playing catch-up, because really you've got investors that you have to report to. And if you have too much in cash, when the markets are going straight up, it's not going to look good. So they have been praying for some sort of pullback like we're seeing today. And not that this is that major of a pullback, but I think as you see, these, you're going to start to see a lot of that cash going back into the market. So I don't see this as any more than a short-term dip. You're probably going to see Biden on. The inference, of course, is that dips will be bought. Because the overall environment, as you just said, it comes down to earnings expectations

are still pretty positive, to say the least. You've got a Fed that's cutting interest rates. the AI trade is so dramatic and what it's going to do for the economy and everything else, right? That overshadows any bit of negativity, doesn't it? I guess if you're trying to beat the S&P 500, long only, you're managing money, one of the things you're most worried about right now, and you see it again today, is your AI semis trade is super correlated to your electrification industrial's trade, that's super correlated to power infrastructure, and frankly, it's correlated to the alternate asset manager.

I noticed you showed those selling off too. And so you're worried that you just, have one giant bet on, and it's all AI and the related contagion. Isn't that sort of true? Right. And so the most clicked on chart we had at Trivari last week was the screen we put out stocks point two or less correlated to the AI semis basket that are still up 10% this year that have fundamentals look like they're improving from the analysts.

So there's a lot of distributors, McKesson and Cardinals and Cora. There's O'Reilly and AutoZone. There's some metals. There's things that probably aren't the exact same trade that people are looking to just balance a little bit out. Some of those are actually in the green before I walked on here, so I don't know we're at the current second. So you see maybe you've got to do risk management portfolio a little bit away from the AI-only trade,

and I guess that's coming up a lot of my meetings. Okay, I think you make a great point. A lot of people like to say, you know, you look at the AI stocks, the mega-caps. Let's take like the mega-caps and the oracles, and you could throw Dell, you could throw others in that and say, you see, it's all about tech and, AI and the AI thing is carrying the whole thing. And then people say, no, that's not true. Look at industrials.

They're record highs at a group. And then you look deep under the surface of industrials and say, okay, that industrial is about data center, AI and the build down. That one is two and that is two. And then this other group, like, look at that other group. The market's really broader than just. You're financing that. The mega caps.

And look at the banks. I mean, you get where I'm going with that. But the reality is how Adam summed it all up. it's one trade. It's just a big trade. So there's the minute that one trade falters, so to speak, then you have an issue, don't you? Well, I think it also depends on the valuations, right? Because I think some of the AI trades are the most obvious, like first beneficiaries of AI. So those are like in videos, for example, that everybody's already been throwing money into. But yes, I think eventually every company is going to be an AI company. I mean, just as much as every company uses the internet right now.

And at some point that is going to happen. But there's a lot of companies that are much cheaper value. and have not has as big of a run-up. So I still don't think that if the AI trade turns, it's going to affect everything as broadly speaking. I kind of disagree with that a little bit for now. I think ultimately she's going to be right. But for now, I only disagree because what I look is expensive companies missing are actually going down the same amount as cheap companies that are missing.

It's the missing that matter. So what I'm talking to PMs now, I'm like, I had a guy who's like, I'm having my worst year ever. This is one of my closest friends who's like a genius. And he's like, well, my long, it only is down. it missed by 2% and it's down 40. I'm like, well, just don't stuff that doesn't miss. Like, we're in that tape right now.

We're missing matters, not as much the valuation. Of course, she's right in the medium to long term. I'm just saying at the current moment, we'll see what happens with the bigger earnings season starting in the next two weeks. So we're a little bit, we'll see you up with the reactions are. Next week. But in the last few weeks, which are the off-quarter ones,

the guys that are cheap missing are still going down. Like, it's a weird one. And you saw Levi, Strauss, Strauss, and people didn't like the guidance. So it's a little bit weird now. I don't think valuation matters as much as just, believable margin expansion and not missing. I just think the... But for now.

Yeah, yeah. We need to look at the concentration question differently than maybe we've been discussing it in the past and being more specific and saying when we talk about concentration in the market, we're not talking about solely the mega cap trade. We're talking about the AI trade. Broadly speaking, but so many different stocks have made their way into that conversation. And that's why some people are uneasy with, you know, if there is any level of slip-up that the market itself is going to have a problem,

because not enough things outside of AI are working all that well. Is that factual? I think it. Like discretionary, like discretionary. Some of the other cyclicals, for example, restaurant-type stocks. There are a lot of places you could say, well, things are so great. Why isn't that working so well until you realize that the AI trade has spread its tentacles all over the place, and it's taken a large share of where this market's gone.

I think what you're seeing today more so, though, is you're seeing risk taken off the table. Like, you just quoted, which is true, that we've had 33 days without a 1% move in the market, so you are going to see profit taking across the board. And I think some of that is happening, so it's going to take across the markets across the board, especially when you have a lot of investors who are in ETFs and mutual funds, that will bring down a lot of companies at once. So yes, I think that's true, but I don't think it negates that you want to be well diversified. like international has actually been holding up well,

been doing much better than all these things we've been talking about all year. Gold's been doing really well, which is inter-correlated to AI. So I think you absolutely still want to own all these things. I don't think this is a wrong thought process, but I think you still want to, it's more of a reason to broaden out than anything else.

Yeah. Well, go ahead. You were going to, I want to get like a little deeper on, you know, you mentioned parts of credit that people are watching closely. I want to go there. You guys stay with me because I'm going to come back to you in a minute. There is an area of concern around,

one area of credit specifically. It's been weighing on shares of several names around the alternative space. Leslie Picker is here with more. Les, tell us more about what you think is happening here. Yeah, the biggest alternatives firms today has got down at least four percent. And a host of the biggest business development companies that a lot of them own have gotten whipsawed in recent weeks roiled over those credit concerns after two auto-related bankruptcies. A BDC is a publicly traded vehicle that finances medium-sized, often private companies. According to Pitchbook, several BDCs had positions in the faltering auto parts company first brands, including Goldman Sachs, private credit corporation, prospect capital corporation, Palmer Square Capital

BDC. In the case of first brands, 14 BDCs had exposure, totaling 229 million, but that was just equivalent to about 4.1% of the company's outstanding term loan balance, according to to ratings agency KBRA. The largest individual exposure accounted for only 1.2% of that vehicle's total investment value. KBRA found that none of the company's $6 billion in broadly syndicated loans were originated by any private credit direct lending platforms. It was the company's use of an opaque off-balance sheet financing with more than $2 billion in obligations that's really under scrutiny right now. But these 30 unsecured creditors are banks and hedge funds and other companies, not private credit, not really these

BDCs, or at least the direct lending we typically talk about, Scott. Yeah, it's definitely something to continue to keep an eye on. You also mentioned speaking of the banks. I mean, we are getting earnings starting next week. What do you think we should be thinking about leading into that? Yeah, so it's pretty remarkable timing here because the first brands and tricolor of bankruptcies, they're also putting a spotlight on credit quality ahead of those bank earnings next week. And as the shutdown continues and the market looks for alternative means to fill the void, without government data, bank earnings should provide some fresh clues about what is exactly going on in the economy. So yes, the third quarter numbers are

backward looking, but there are plenty of metrics that can provide trends about the future. Guidance, of course, particularly on net interest income. That's the profitability metric for loanmaking. That'll be a key indicator of corporate demand, consumer demand, investment banking pipelines, also a barometer of corporate confidence, and the amount that banks are setting aside for bad loans, especially given the current environment, would show how they feel about their own books right now, how they feel about credit quality. It hasn't impacted the perception of the big six universal banks in the same way it has those alternative stocks. J.P. Morgan, Goldman-Sax, Morgan, Morgan, Stanley, Wells Fargo, they were trading right around their all-time highs before

today's sell-off. You can see right across the board there, Scott. All right, Leslie, thank you. It's a really good setup for us on both accounts. Let's add CNBC contributor, Bryn-Talkington, of requisite capital to the conversation in which Adam and Courtney, of course, are still a part of. Bryn, it's good to have you. Give me your thoughts as you look ahead to next week, how you're thinking about those issues in an area of credit that's gotten a lot of focus, what bank earnings might do and where it could take this market.

So the market gets it wrong all the time. And I think on the BDCs that you have a space where they're doing so many diversified loans. The BDCs don't have a ton of volume in terms of the publicly traded stocks. And so I think you have hedge funds piling on. And then you have this narrative that we've spent, you know, the past couple of days or even a week talking about. But when it comes down to it, like what's actually happening with Tricolor, it was J.P. Morgan, 5th, 3rd, and Barclays. And with first brands, it was some international. There were some international private credit firms.

UBS got popped on it. And so to me, it's like when you dive into it and Leslie even walked into it, the BDCs had just a tiny amount of exposure. And so I think you just have this somewhat hedge fund pile on on these basket of names. And I think this will pass because ultimately BDCs are going to trade off of the trade off book value. So has book value changed because of tricolor and first brands? And I would say no. And so I just think it's an overreaction on stocks. that don't have a ton of liquidity where hedge funds are piling on and selling them down

you agree with that api the main thing that leslie said not brin before that i think is important is the data points that we get from like monahan at bank of america i think what he said carries a lot of wait in terms when he talks about the credit card business and the banking business i agree with brin i don't think this has a lot of legs in the current tape i'd say they'll pass you know in a few days i think the bigger issues the bank earnings what they say about the health the consumer, Visa MasterCard, 90-the-accredited card delinquencies like that. I think the challenge to all of us right now is we can't proactively think of anything that we're worried about that we want a position for.

I mean, you know, Britain and court run private wealth businesses. Are they going to change the equity exposures massively in anticipation of October earnings? I don't think so. I mean, they can tell you if they are. I think what we're worried about is do we see the big banks tell us the consumer slowing at a rate that makes us afraid that we need to de-risk a ton. And I think the odds are skewed that they won't do that. I think we've seen enough that they won't.

What do you think about this space? Yeah, and I think seeing what the banks are reporting this week is going to be really important, right? Because especially in light of the fact that the government shut down, we aren't getting this data, it is that much more important to hear what the banks are saying. And I think as we go into this, we just, we want to make sure that you are positioned properly. The regional banks, you're actually saying that they have been selling off a little bit more today in anticipation that if you are seeing some sort of, to slow down in the economy, that might hit them harder. But again, I agree with you. I don't think

people are completely changing their positioning right now. I don't think you want to be out of the banks by any means. And as we go into earnings season, it's expected that companies as a whole should have earnings growth of over 6%. And what we've been seeing and typically happens is companies tend to beat those expectations. And if that happens, you can have a really strong earning season, which again, is that much more important with no government data. And that actually could lead to higher markets. I feel like we should probably just do a quick reset for you here. We're about 19 minutes or so past the hour. We do have the Dow, which is down by near 700 points.

It's just down by a little bit more than that, but it's 1.5%. The damage is really showing up elsewhere, as you see. The NASDAQ was a 3% or thereabout loser. S&P's off about 2.1%. Notable in the NASDAQ, too, don't forget, earlier this week, we mentioned we were above 23,000 for the very first time ever. We're closer to 22 than we are 23 now because we have a decline of some 600. 50-so points. It's a two-week low for the NASDAQ. Brin, do you just want to give me then your

thoughts on how these renewed trade tensions today with China are the, you know, the mechanism du jour of causing this upset in the market? I think this is way more than China, the sell-off. I think that we need China. China needs us. This is posturing before a potential end-of-the-month meeting. And so I think that investors, first of all, markets don't tip. typically bought him on a Friday. And so I think maybe Monday we get a washout. I think this will definitely with China and the U.S. be a buy-the-dip. Trump has never said, let's decouple. I don't think I've ever heard him say decouple once. Big shift from the previous four years. And so I think we want to make a deal of some sorts. It's complicated. We're two big economies.

But I think look for Monday. I will say this from the S&P, we broke the 21-day moving average from a momentum perspective. The 50-day moving average is right here at 6,600. So we're slightly, you know, a hair below that. And so I think that does matter from momentum perspective of getting some technical weakness, but we're not even close to the 100-day. But I think closing below that 50-day looks like that's going to happen. I mean, we are going to celebrate this Sunday, the three-year anniversary of the bull market, right? We probably would have led with that on a day like today, heading into the weekend and taking stock, if you will, of where we are and where we go from here. And the obvious news headlines have driven us in this direction. As you look

at the whole market, the bull market itself, do you feel like it's still young? Or are we long in the tooth? I mean, here's the consensus view. First of all, Brynn, I didn't know that. I'm going to go back to the office and grind a little, that the market doesn't bottom on Friday. Thanks for the idea. I'm going to go grind on that on the weekend. So that's always a good, good to learn. learn stuff. You know, I think everyone thinks it's what I call a triple breaking putt. Like they think that we're going to end higher just because earnings season will get some momentum. This is a quick short-term thing. And I agree with Brenda, it's posturing before it will probably be a meeting. And we know that we can't be in a sustained, unsustainable

environment with tariffs and stuff. So I think we get through this, we're higher. But everyone kind of looks at the data 100 years of S&P and says, well, wait a minute. These are going to be three monster years, 20, 23, 4, 5. Maybe we get a little bit of a rotation. We get broadening whatever. But I think they're in that the long, the third part of the putt is we're just going higher because of AI, you know, productivity in 27 and beyond. So I don't think we're going to get a big sell off. I think people want to own high quality stocks exposed. So it's going to be short term. Whether it's Friday or Monday, I'm going to grind on that. But I think we're going higher by the end of next week and the week after the week after because earnings, I think is going

to be decent. Okay. How does the bull market at three look to you? I mean, I agree with I think we have momentum on our side. There's a lot of cash on the sideline. The seasonality, I mean, the fourth quarter tends to be a very good quarter historically speaking, especially after having such a good early year that we've already have. So I think a lot of things are on your side right now. I think these pullbacks are normal. I think you're going to see them bought, so I think you want to stay long here, absolutely. Bryn, lastly to you, I'm looking at your holdings. You don't really have much exposure to the large banks, do you? No, no, I haven't. I haven't. I I play it via Apollo and KKR, which I started buying really around the April tariff tantrum.

And so I'll continue to add to those. I would rather own those. I think they have a lot of flexibility, especially right now with the negativity. I may be adding to them on Monday, Adam, if we do find a bottom. I disagree. I think it's interesting. I mean, you only have 38 minutes to add them now. So, yeah.

Well, I mean, those stocks, it's interesting that you've chosen to express your view of financials through the prism of some of the alts and PE, yeah, PE stocks, the ones that have really been in the eye of the storm. The KKR is down near 15% over a month. Apollo down just about 11%, Bryn. Yeah, this is when you want to buy them. And so instead of buying small caps, think about Apollo and KKR, they buy businesses, and they want to buy them for X and sell them for X plus. And so they're very economically sensitive. And so as rates are coming down that's very positive. On top of that, I think with the deregulation that will hopefully get next year, that benefits not only, I think, the regional banks, but also these managers,

but from an economic perspective, if you look at the regional banks, we're worried about the lower-in consumer. I think we have like an economic scare right now, and these companies will sell off on that. I just think GDP is going to continue to be strong next year. And so this is why I would rather add to these names on weakness, sell them on strength. And so this is where, you know, these set up to be potentially good ads, ads for me next week. Last quick point is that you want to make one. I want Diamond to say something negative about the market

because that makes it go up. I want Monahan to say something positive because that makes it go up. That's what you're looking for. You don't want Jamie to get bullish because he's been bearish for two years while his stock and the market is ripped. So let's make sure he stays negative.

All right. We'll leave it there. Adam, thanks. Court thanks. Bryn, we'll see you soon. Bryn talking there. We're just getting started here. Coming up next, Mohamed El Erie.

And he joins us. We'll get his take on the sell-off. these trade tensions with China, some of the Fed commentary over the last few days. It's been very interesting. And now we're down allegedly to the final five of who could be the next chair of the Fed. We'll ask him about everything next. Well, it's an ugly day for the NASDAQ. you know that by now. We're looking at a 3% decline. We're right there. I mean, the Dow's down

750, but the NASDAQ has certainly sold off harder. Big declines in chip stocks today and some of the mega caps, too. It's all about those trade tensions with China renewing themselves today based on a presidential social media post. So we'll continue to follow that. We'll bring in Muhammad Al-Aryan now. He's Alihan's chief economic advisor. It's good to have you. Thanks for joining us as we try and take our viewers through these last 30 minutes or so of this sell-off today. What do you think about it? Thanks, Scott. I'm not surprised at all. I'm not surprised to what's happening in equities, what's happening in the bond market, what's happening to gold, what's happening with Chinese

ETF, because we've had two bits of news today that challenge something that was deeply rooted in the marketplace, which is that growth is sound, inflation is stable, the Fed is going to continue cutting and policy volatility, the worst of it is behind us. So it doesn't surprise me. The social media posts by President Trump is that phrase massive increase in tariffs. And don't forget, we're talking not just about direct tariffs, but also secondary tariffs. So there is quite a big, a bit score. And this comes at a time when the market assumed that things were fine, and by November,

we would have a friendly announcement. And then the second one that's flying under the radar screen, but it matters. The second announcement is the layoffs are started, which questions the notion that this is just a regular shutdown, where once we reopen, everything will be fine and the markets would just look through it. So it's two bits of news, a big bit of news and a secondary bit of news that is causing us to question what has been very friendly assumptions about the environment in which this stock market has gone. from record to record. So you really think that maybe this is the first showing itself of the shutdown, which the market had all but ignored up until today, if in fact it is, as you suggest, thinking about the layoffs that were announced via social media posts from the head of OMB, as well

as this escalation with China? I do, because the market had seen this movie before, the shutdown movie. We thought we knew how it ends. It ends by people getting paid for what they've missed and no layoffs. And now suddenly there was a higher probability. It's not overwhelming, but there's a higher probability of permanent layoffs. Now you're dealing with the bit of the economy, the K-ship economy that's already vulnerable. So this is another development that is pulling the rug from a working assumption.

that was actually a very comforting working assumption that this is the same movie, we've seen it, we know exactly what happens. No, but you talked about these assumptions earlier where you almost suggest that the notion that growth is sound, that's the word you used, and that the Fed is going to cut more, aren't based in reality.

I mean, growth is sound. The economy is sound. I mean, we're, according to Atlanta Fed, 3-8, and we know the Fed's going to cut more, Mohamed, don't we? So first, I think the economy is sound. I want to argue this is distributional effects, but you don't want to push the lower segments of the population too far. Why is it sound?

Because of AI. AI has a significant direct and indirect effect on growth. The direct effect is all the investment in the enablers. The indirect effect is through the wealth. the fact that people feel wealthier and may spend more. So this AI engine will continue. What is more in doubt is the consumption side, which normally has been a big driver, and particularly the consumption by lower income household.

But this is a sound economy. Don't get me wrong. It's certainly better than anywhere else that I look at, and that includes Europe and China. Let me ask you about the so-called Final Five, which we believe is left out of a larger pool of potential successors for Chair Powell. It's said to be Bowman, Waller, Reader, Warsh, Hassett. We'll show you a wall here that we've created to capture that as this process appears to be winding itself closer to the finish line. What do you make of that group, if that is, in fact, the last five before we find out an actual name? They are a very solid five. All of them have experience.

All of them have an amount of economic training that is significant. You know, I'm comfortable with the five. I have preferences among the five, but any of the five would be a very credible replacement for Chair Powell. I mean, do tell, right? You don't shy away from expressing your opinions. Who do you think would be best? So I think of the five, three dominate, two that I know personally, a third person that I got to know through his many speeches. So the two that I know personally are Rick Reeder and Kevin Walsh.

They're both incredibly capable individuals and would make a very good Fed share. Chris Waller has really stepped up in recent years and has been much more open about how he's thinking and he would also make a really credible Fed share. The other two, I simply know less about their views on monetary policy than I do the first three. Which one do you think would be best for the markets that investors would say, ah, okay, that this speaks our language, so to speak.

The two that know the market's best, and that is Rick Reeder and Kevin Walsh. They are familiar with market developments. They're interested. They have a really good feel for technicals, something that the current Fed board lacks. You don't have a really good sense for market technicals, which is really important.

So those two are known commodities that have a significant amount of market and economic expertise. Muhammad, we'll see you soon. Thank you. Appreciate it. As always, Mohamed Alarion. Thanks, Scott.

All right. Be well. Up next, 314's Warren Pyes. He talks about this selloff today. The Dow down almost 770 points. Nasdaq's down 3%. We're back after this. Well, we're 800 down on the Dow with about 20 minutes to go. It's 820 or so. Every sector within the S&P but Staples is red today. Technology, obviously, is the worst, down 3.5%. But declines in discretionary stocks and energy, cyclical areas of the market are certainly getting hit. Industrials are down some 2%.

as we track these final moments of this trade for this week. Warren Pyes is 314 research as co-founder. He joins us now. I'm looking at 3.3% down on the NASDAQ. Is that what catches your eye the most? Yeah, thanks for having me. It does. I mean, that's where the leadership's been,

so it's not surprising to see that's what's giving the most back. It's a little bit of a stressful day, I guess, but when I zoom out and look at the market and where we've come from, We've gone now 119 trading days in a row without a 3% pullback on the S&P 500, and that's the seventh longest streak without that kind of a pullback historically, going all the way back to the 1950s. And when you look at those streaks, we've returned like 28% before today.

And that's the most, that's the strongest performance we've seen within any of those streaks. So when I think about it, this is just I think a needed correction and a needed pullback, something we've been waiting for, sentiments been extreme, talks of bubbles, talks of doubling between now and March of next year, and analogs to 1999. This is healthy. We're in this window where you'd expect it in October, and that's how we're approaching it as of now is a healthy pullback. But I mean, sometimes you look at these things and it sounds like this is what you're suggesting is we are overbought, we were due for a pullback, and now we're getting it. And sometimes you can't point to an actual catalyst that would send you into that sort of

atmosphere in the market, whereas the difference today is we have a serious catalyst. And it's a renewal of tensions between the United States and China. We're talking about the possibility of more tariffs, not less. The market had sort of been anesthetized to the whole issue because we haven't really talked about it all that much. And it figured this two shall pass and we'll get on to talking about rate cuts and positive earnings. But now we have a serious concern to think about depending on what the president does and if he does it. Yeah, I mean, it's a concern. I've been a little bit in recent weeks talking to clients and saying, you know, we were so concerned about tariffs and tariffs are a real drag. And we, you know, we didn't have a full taco.

from the first round of tariffs, really. And so we've expected somewhat of a fiscal drag. Our recommendation for clients is to keep a full equity position and then have an overweight bond position and, in fact, have skewed towards a little bit of duration. And you can see it on a day like this because I think that if we're going to have another flare-up in these tariff negotiations or some kind of trade war, I think that bonds will end up being the place that you want to be because it's going to manifest itself as a growth scare. So that's been the way we're playing. And I mean, I think we've gone through this. And ultimately, we've already tested the limits of what Trump can tolerate. And I don't think Trump, I think the Taco Trade is still with

us. Yes, there could be a little bit of danger in saying that. But if we get a little bit more weakness in this October period, I think you'll see a capitulation on his part. And ultimately, this will get back to where we were, you know, a few weeks ago and it's just going to be a nice sediment reset. That's how I interpret it. Okay. I mean, how are you feeling, though, about risk around the AI trade, which I thought Adam Parker put very well, we have to be really clear. We're not just talking about the mega caps. This trade has metastasized, so to speak, to, you know, utilities, a usually boring area of the market that you go to when a safety trade is on, or like a yield proxy. Now we're treating them as the new growth stocks because of AI. And then

you'd say, well, industrial stocks are at record highs. Why? Because of the larger ones that are leveraged more heavily to the AI trade too. So that just brings the risk factor up, doesn't it? when you have so many different stocks under the umbrella of a single trade? Yeah, I mean, the economy is very dependent on AI. I think everybody knows that at this point in time. And what we do at 314, I mean, I work with Fernando, my partner, and he is deep in the AI world. And so we're constantly monitoring things like chip demand, you know, and chip pricing and

useful life. And from everything we can see, I think that this AI, AI demand and the AI story is still intact. Yes, it's a very, it's created a narrowness to the economic expansion, and it would be much healthier to see this rally broaden out. We've all anticipated a broadening, and it hasn't really come. I think we will need a broadening if we're going to get up to $7,000, some of these more high level targets that you're seeing people throw out. Our target for a year end is $6,800 on the S&P 500. We would much rather see a pullback where we can get more long into the end of the year here in October. But yeah, you're going to need, you're going to need AI to do that, and then you're

going to need some participation in the rest of the economy. That's where I think the rate cut story comes in, ultimately, is that if we have rates restricting the rest of the economy, and the hope is that this cut cycle will loosen up some of those other areas. But I don't see anything too real. I know everyone's nervous about the 99 analog, but I'm not there yet. I don't think that the AI trade has, I don't think it's like seventh inning on it or eighth inning on it. I think we're still in the middle-in-eas. Let's finish on gold, if we could, because we were just below 4K earlier. Like halftime, I checked it.

We're at 39-99 or something like that. And we've had a bid back, as there it is. You could see the intraday go right back up to 4,032. We, of course, got over 4,000 for the very first time this week, and there are a lot of forecasts out there that we're going much higher from here. I'm wondering what you make of it, and since you talked about how you're advising your clients in other areas? What do you tell them about this?

So, yeah, you're hearing a debasement everywhere. You know, I don't want to take total credit for that. But we've been talking about a shift to a debasement mindset for some time now, at 314 research. I think that prior, coming out of the GFC, the worry was deflation, protection of principle. And we're seeing a societal shift, investor shift, to a debasement mindset. And that's protecting purchasing power. I think gold is the biggest beneficiary.

We've been on this trade since we saw. the Russia-Ukraine war start, and we've seen global central banks buying gold up. That was the first leg of this trade. Our target for the year was 3,500, and it's blown past it. Our opinion is that this is a new secular bull market, fueled by this debasement mindset. And when you're in a gold secular bull market, gold can do nothing for years on end, decades, and then it can explode higher for eight or 10 years. We're in an explode higher phase, and you don't want to call atop. This is not a top on gold. We will be going higher.

My view is, if you compare it to old secular bear bull markets for gold, $5,000 is probably in the bag over the next couple of years. And I think all roads, a lot of the things we're worried about societally and globally lead back to gold. And it's really interesting to see its strength on a day like this. It just reinforces the bullishness. Yeah, thanks for helping us dig into these markets today. Warren, we'll talk to you soon.

thanks for having me warm pies up next the green arrows in today's sea of red yes there are some things that are working today we'll show you where next our 10 from the bell let's get back now to mackenzie sagalos for the look at the key stocks that she's watching tell us what you see here okay scott let's take a look at the names in the green today despite market pressure shares of pepsico higher and leading the s&p ubs raising its price target on the Frito-Lay and Gatorade owner, pointing to innovation and cost-cutting as reasons for its confidence. And then auto players, AutoZone and O'Reilly are bouncing back, but both are still negative for the week. And shares of AbbVie are higher as Piper Sandler

raised its price target and reiterated an overweight rating. The firm said AbbVie is one of the few among its peers that offers a trifecta of revenue growth, asset durability, and M&A bandwidth. And lately, we're saying strength in biotech overall as well, Scott. All right, Mack, thank you. McKenzie Segal. It's coming up next. We count you down to the bell. The final moments of a pretty rough trading day.

We've got movers today, tech, consumer stocks, and much more will document it all in the market zone, which is next. We are now in the closing bell market zone. PNC's young Yuma here to break down these crucial moments of the trading day. But Steve Kovac has more on the sell-off in big tech today. Courtney Reagan is watching consumer discretionary names for us. Steve, why don't you tell us what we've been telling our viewers this is really bad in tech today. Yeah, it's really bad. And let me pick out a few specific names for you here. Scott, no one with more tariff exposure than Apple. Of course, we've been talking about that much of the year down about three and a half percent as we go into the close. Apple's already expecting about a billion dollar hit to revenue in the September quarter due to tariffs. And that's even after it won some relief from the president after CEO Tim Cook gave him a trophy.

and promise to spend $600 billion within the U.S. over the next four years. Now, that even increased the production in India, which has a lower tariff rate, but Apple is still very dependent on China. So an increase in tariffs there will put more pressure on Apple's margins and perhaps accelerate its supply chain diversification. Now, let's move over to Qualcomm, because that's down more than 7% today, not just because of these tariff concerns, but also China opening an antitrust probe into the chipmaker. Now over to retail Amazon, down nearly 5%. Retail businesses heavily reliant on Chinese imports, of course.

Sellers have been feeling the pressure most of the year. And related to all that retail stuff, digital ads and consumer businesses, Alphabet, it's off about 2%. Meta down nearly 4%. Currently at its lowest level of the day, Scott, it's just worse from there. Okay. Yep. Steve, thank you. Steve Kovac. It's good that Steve mentioned Amazon because obviously, Courtney, it has an outsized role in what consumer discretionary stocks do, not to suggest that there aren't a lot of other names that I know you're watching today.

Yeah, exactly. So Steve hit the Amazon effect. So let's give you some other ones. The consumer discretionary sector writ large is the second weakest of the day here. And this, of course, after President Trump threatens, quote, massive tariffs on China. So the sector down about 3% on the session, best by getting hit really hard, down about 5% now more than 6%. Remember, its vendors use China for a significant amount of consumer electronic manufacturing. Hasbro, the toy maker, also lower by about 5%. It produces toy toys in China. It has been working on lessening its reliance on the nation like many others, but still there is an impact.

Nike, down more than 4% today as well. It manufactures a lot in Southeast Asia. We talk a lot about the Vietnam manufacturing footprint. But China is also a market for its shoppers. It's an international. It sells there. That has been a weak spot. So further pushed down on the shares of Nike today.

Now, the defensive consumer staples group, it is up just ever so slightly, the only sector in the green. I just mentioned it because it also has the name consumer in it. And we know that there is a big difference between a staple name and a discretionary name for the consumer. Scott. All right, Court.

Thank you. That's Courtney Reagan. Young Yuma, as I said, of PNC, is with us. We're going to close either at the lows or certainly near the lows. We're down by, wow, it's hard to even. We haven't seen this in a while. I think that's why it's a little jarring for people. He's down 800 points on the NASDAQ, 3.5%, and down almost 900 on the Dow, young you. These are big numbers.

It is jarring. This is a sea of red out there, but I think it's important amid this pullback and this downturn and to keep two things in mind. One is that President Trump didn't actually call off the meeting. I think there's still some prospect that President Trump and President Xi could actually meet at the end of the month. And secondly, the president only threatened tariffs. They weren't actually announced. So this hasn't been taken all the way.

We do think this is a bumpy path toward negotiations between U.S. and China. But we do think it's a path that will ultimately start to have some progress. Both sides are carving out very tough negotiating positions. but that's the nature of the tension between these two superpowers. Mohamed Alarion suggested that at least some part of what we're seeing today has to do with the government shutdown and the fact that layoffs have now begun. You buy that as well as just one of the other things that's lurking out there, putting some pressure on stocks?

Well, it's in the mix, and there are a host of things, including the labor market and the layoffs with the government shutdown plays into that. But I think broadly what this does is it injects uncertainty into the economy into the markets where before there was an element of complacency. And this also means that businesses that were perhaps thinking about starting to hire again, how they were going to expand. Now I want to take another pause to see how all this is going to play out. So I think it's that uncertainty that is showing up in multiple fronts,

which you could probably ascribe to this big downturn taking place today. Even those who think a sell-off was needed, they suggest it's going to be short-lived because it will be bought. Ten seconds. Give me an answer on that. I think there's a floor under it. The macro picture looks strong, and we're still in the exponential upturn for both AI adoption and innovation. And that's a strong place to be it. All right.

Appreciate you being with us here as we head towards the close. 20 seconds or so away. That's Young Yomop of PNC. So you're going to close awfully close to the lows. That's where the bell is going to ring us. About 3.5.3.5% on the NASDAX. You got on the S&P about 2 and 3 quarters percent. The next hour is going to pick it up, of course, with Morgan and John and Uti.