Closing Bell - Closing Bell 10/14/26

Episode Date: October 14, 2026

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, Melissa Lee 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.

And welcome to closing by. I am Frank Holland in for Scott Wapner. Stocks under pressure falling sharply as a hotter than expected inflation print sends yields higher, raising some fresh questions about the fence next move. Let's get the scorecard with 60 to go in regulation. A lot of red on this board. The Dow pulling back about 200 points just under a half a percent. The S&P down one and a third percent. The NASDAQ down more than 2 percent. The small caps down more than 2 percent as well. We also want to take a look at treasuries, trading pretty close to multi-decade highs when we're talking about yield. It's still a bit lower than we saw just earlier this month. Right now, you're looking at the 10-year, coming in at 5.19% to 30-year at just over 5.5%. The big story today, the sell-off in AI infrastructure names, some of the biggest winners of the AI boom, now taking some of the biggest hits. Corey plunging double digits, Oracle, Nebius,

and other names tied to the AI buildout. They are also getting hammered. You see Corey pulling back more than 15%. And it's spilling into the chips and the memory stocks. All of them are lower. You're going to see a lot of rental. board as well. Taking a look, AMD pulling back 6% S.K. Hinex down about 6% as well. One notable bright spot in big tech today, that is shares of Apple bucking the broader

sell-off in the green, as you can see, up over a half a percent, and within striking distance of record highs and nearing the $5 trillion market cap milestone. And that takes us to the talk of the tape. Is this just all a reset of sorts, one of the market's hottest trades, or are borrowing costs rising exposing some new risk in the AI boom? That's where we're We begin with our own Sima Modi, Sima. Well, Frank, the sharp drop in Corrieff shares prompting CEO Mike Intritor to send a memo to employees today where he attempts to calm concerns around its financing measures. We reviewed that memo.

He writes that there will be a period of time when the market misunderstands and acts irrationally. He adds that he's confident in Corrieff backlog, which he says more than supports all of its debt obligations. He then goes to say that not all companies are following the same playbook, with some raising enormous amounts of capital, he says, without execution. It's worth noting companies that buy GPUs and lease them out. Like Corweave, as well as Nebius and Oracle, are trading substantially lower

right now. As are other companies invested in the AI infrastructure buildout, think about the servers, specifically Dell, Super Micro, Hewler-Packard Enterprise, all down, while the chip stocks remain solidly lower, as the sort of entire sector reacts negatively to the spike in bond yields,

which have elevated these new concerns around leverage. Also, just want to flag credit default swaps, Frank, for some of these AI stakeholders rising a new high for Oracle's five-year, indicating that investors on the credit size are hedging their risk, Frank. C.M.M. Modi, thank you very much. We now want to bring in Yorkville Ives, Dan and Ives to talk more about some of the pressure that we're seeing in technology today. Dan, always good to see you. Great to see you, Frank. Thanks. All right, you just came out with the notes saying there's some jitters about the AI build-out.

I mean, we're certainly seeing in names like Corweave and also Oracle, a name that you cover. break it down. Is this just about higher yields? Because the yields aren't as high as they were just a few weeks ago. Why today are we seeing this kind of pressure? Yeah, I mean, clearly, Corey Wee being sort of the poster chaff, what we're seeing in terms of nervousness. But, Frank, I think it just comes down to the worries like, our yields, is that going to constrict the data center build out? Are you seeing cracks in the armor? And I can tell you, I'm here in Korea from a memory perspective, it's accelerating. I mean, significantly, where I don't even think we have equal weight. demand the supply till late 2008, early 2029.

So I just think this is a white knuckle moment market, way overreacting. And I think we're going to get through earnings season. And that's going to be the calming force because we're going to see from the hyperscalors and ultimately the chip players. And the demand you just cannot ultimately deny. All right. So spell this one out for us, Dan. You're saying the hypers are going to kind of answer some of the questions that people have about the AI buildout.

What are you expecting from these reports? Is it simply just beats on cloud? Yeah, Frank, I think it's a, we put this as pieces of a puzzle. If memory stocks and what we're seeing from a chip perspective, demand 13 to 1. Hyper-scalers, we think we've seen a 30 to 40% acceleration sequentially in terms of deals. And as that comes out, especially Microsoft, you look at Amazon, Google, that's just another piece of the puzzle that then will be answered further with the Pallenteer, the Snowflake, the use cases. Because it just goes to our point. we're less than 5% through in terms of companies going down the AI strategic path.

And I get the nervous and yields and what we've seen with core weave and what the debt market's telling you, we assume 5, 10% of the data center don't get built. You then still have 1,000 data centers getting built. And that cap-backs wave, I think that's really going to be the driving force and why you continue to be super bullish here on these names. All right, I want to talk about the Mac 7, specifically Apple, very close to an all-time high $5 trillion market cap.

That's certainly a bright spot in this market. How critical are the Mag 7 to maintaining this bull market that we just celebrated a four-year anniversary for? Their hearts and lungs. I mean, I think big tech ultimately is flexing the muscles again. Not just on hyper-scarable, we see from Nvidia and others. But when it comes to Apple, it's a good example. I think we've seen with meta as well, the golden installments. And they can be lead to the AI party, but they are going to be a toll collector

in the consumer AI revolution. And I think that's really what Ternus is going after. And I think investors are recognizing, I think when you look at META and Apple in particular, you can't count them out because the install basis is at the epicenter, just like what Meadow is doing with Mews. And I think these are both names

that are going to significantly outperform of the next six, 12 months. So you're talking a lot about the sentiment right now. You believe, at least, the fundamentals are very different than the sentiment, at least today. You know, sometimes you see a knee-jerk reaction in the markets after a hotter than expected print that leads people to believe that the Fed might hike once, maybe twice.

But I also want to go back to some of the action in the market. If you look at ASML, they put out guidance. They have orders all the way through 2030, and you didn't see a positive response there. Also, we're going to have a guest coming up later. He believes some of the action in memory stocks is tied to short selling. So there are people in the market that don't have confidence in chips. And I think chips are kind of a leading indicator. So, I mean, if you disagree, please tell me.

But why do you think so many people are betting against chips and this critical part this AI buildout right now? Yeah, good, great points, Frank. And I think so many have been skeptical in this AI revolution build out the last three years. Now, that's maybe accelerating here, but it comes down to, we're here in Korea. I see it front and center what the memory players are seeing. Demand is accelerating a point that you never even could really arms around relative to demand.

But it needs to be ultimately earnings and demand. As that comes through, you can't deny that. And I think a lot of these stocks are disconnected in a way where the fundamentals are accelerating and the multiples are ultimately retracting. I think they're trading like cyclicality. Investors are sneak-bitten. But that creates the opportunities from memory, from SK and others, the chip, Nvidia, and what we're seeing on the hyperscalories.

These are buying opportunities, not the time to wave the white flag. You know, Dan, it's so funny you mentioned that. So you're in Korea, huge retail investor culture there. Here in the U.S., it feels like the retail investors cooled off a bit. Is this a dip that you think retail can buy and maybe potentially change from the momentum in the market that we've been seeing? I think this is going to, these are the moments. These white-knuckle moments is where you buy the winners and you buy the stocks. I could go back to the fictional SaaS apocalypse, the circular financing concerns,

and then you look what's happening in software and such. That's the opportunity right now for memory chips and what we're seeing, even when you look, we've nebias and others. We will sit here two months from now, three months from now going to year and looking, this was an opportunity, not the time to panic. Dan Ives, best dressed man in Korea. Great to see you, as always. Thank you very much. I want to bring in the panel.

Paying Capitals, Courtney Garcia, Truis, Keith Lerner, and Requisite Capitals, Bryn-Talkington. Courtney, Bryn and Bryn, excuse me, our CNBC contributors. It's really good to see all of you. Courtney, you're right here with me at Post 9. I'm going to start with you. So much to talk about rates, technology, everything else.

So markets moving kind of lower today because of that hotter than expected CPI, odds of a Fed hike raising pretty significantly. according to the CME Fedwatch tool. See, Lisa's going to be on in a minute to break all that down. I want to get to your thesis. You're saying this is the moment to diversify in the small caps and midcaps. Aren't they more rate sensitive? Why now? I think anything that's more rate sensitive is clearly the opportunity to be had here. So we're looking at bonds where you can finally lock into better yields here. Small caps are going to be hit much harder because they have a much more debt on their balance sheets and they're affected by the short-term rates that are changing.

So I actually agree with everything Dan is saying here. I don't think the AI trade is over. But when you look at today, Today, AI is getting it harder, but if you look over the last month, it's those interest rate sensitive areas that are clearly the opportunity. So I actually think, as we look forward, yes, we could see rates going up from here. Today is a good example of that. But I would actually argue a majority of this rate hike that's happened.

We've had quite a move in the last month. I think more of that is priced in than not at this point, which is why you want to start to look at those opportunities. Well, you're saying the moving yields has already been, the hikes already been priced in by the moving yields. I would say the increase we've had in rates. Okay. I would say a majority of the hike has happened, right?

So it could still go higher, but I think it's not going to exponentially go higher from where it's already gone. All right. I'm saying that correctly. Yeah, I think everybody understands. Keith, I want to come over to you. Despite today's action, you remain overweight tech. But I do have to ask you about the action in the SOXX, the I-Share semiconductor ETF, the I share semiconductor ETF on pace for seven days of losses. I think, and I think a lot of other people agree that chips can kind of be a leading indicator where the AI trade is going.

Is that concerning to you at all? Yeah, well, for us great to be. be with you. I mean, it is somewhat concerning or that the weakness in semiconductors, but we also have to remember they went parabolic earlier this year. In the second quarter alone, they were up 80%. That was the strongest quarterly game

we've seen in history, and they're still in this kind of wide, sideways band. We think there's more of relative value in the MAG7, which made a new relative high yesterday. The other thing I would point out, Frank, we wrote about this quite a bit over the last few years. The market continues to have this love-hate relationship with tech.

And as an example, month there were only two sectors up in the market, tech and communications services. This month, there are only two sectors that are down. One is tech and one is industrial. So the love-the-hate relationship continues, but if you're born out and look since the start of this poor market, tech has outperformed. And I think in some ways, what you're probably seeing with tech right now is it's catching up to the rest of the market.

The rest of the market has been weak. Now it's bringing down the leader. I think ultimately, you know, this rotation likely has a little bit longer to go. but ultimately money comes back to tech because the key theme of this bull market still is AI and tech in our view. Brin, I want to come over to you right now. So you're saying defensive. Defensive trades look pretty positive right now. I think a lot of people agree with you.

I'm looking at health care up almost 2.5% right now. Also looking at staples and utilities for the month up about 7, 6% respectively. But you also say it's seasonality. So is this a seasonal trade? What changes the seasonality in that defensive position that you're seeing a lot of positivity in? Well, I mean, when I say seasonality, I'm talking about the seasonality of the midterms, and really going back to 1962 between the August highs and the midterms lows, the average peak to trough for the S&P is round negative 8 to 12%.

So this midterm type of downturn to me is normal that we've seen it really since 1962. I think today you see Apple, we'll talk about consumer staples, a Walmart, of course, Health Care, Lilly, United Healthcare. are going to be up and be those more defensive, you know, defensive securities and stocks. But I really think within tech, Frank, this goes back to where Dan is right now is in South Korea because the Cospy's been weak since last week. I think the Cospy's down and the memory names are down about 12% over the past five or six days. You now have the Cospy under the 200-day moving average, which is very heavily memory-constrained.

And we continue to see this spillover when the Cospy and the memory names, in South Korea sell off, our names start to sell off, and then couple that with rates, inflation, and midterms. And we're just in this type of market right here. But I do think this is going to be an opportunity to add to those names, because as you and Dan were talking about the hyperscalers, the cloud growth, which is huge parts of Google, Microsoft, and Azure, those are looking to be growing at 55 to 56 percent over the next two quarters. Those are big, big. numbers that we're going to continue to see. And so I do think that's going to be a really stabilizing factor within tech, specifically within the hypers cloud growth.

All right, so we spent a lot of time talking about some of the weakness in South Korea. Outside of South Korea, Courtney, you actually like international equities. There's certain countries where you're seeing opportunities, certain sectors outside the U.S. Yeah, we diversify broadly into international equities. So we have both developed markets and your emerging markets. I think both of those continue to look attractive here. And And those tend to be a lot less focused on your AI trade, which I do think is good from a diversification standpoint in your emerging markets. Those are going to be much more directly correlated to commodities, which as you're seeing this

AI buildouts happening, you're going to need all those commodities and materials and that is going to continue to drive your emerging markets higher. So it is absolutely a piece of the portfolio and it's another thing you definitely want to take advantage of here. And I think too we're just looking at the fact that markets are down today because rates are higher and so we're seeing that repricing that's happening, but you're still getting a lot of good data that's showing that the economy is still on good footing. So if this is purely just a repricing from interest rates higher, not flashing a recession,

and I would argue that's happening, especially when you look at the bank earnings. I would think that's more of a reason to look for opportunities here, globally speaking, to your point. We'll talk a bit more about the bank earnings coming up in just a second. Leslie Picker's going to be coming up. Everybody, stay with me. I want to get to our senior economics reporter, Steve Leesman, for more on today's inflation read and what it could all mean for the Fed. Yeah, and a little breaking news, Frank.

We're just getting some information about an interview that Chicago Fair President Austin Goolsby gave to Yahoo Finance. He called the CPI number this morning discouraging, says the economy has worked to do on the inflation side, and he cited specifically service inflation as a concern. Now, that hot CPI core number this morning caused a rethink on the street for the outlook for the Fed in October, specifically that rethink yields to is a higher probability of a rate hike. Take a look. October now at 33, was at 22 percent, had been higher today, December now at 92, up from 90 percent. So darn sure, or pretty confident, or hike at least one by December.

John Kershner from Janice Henderson writing in this reaction to this morning's much higher than expected CPI report reminds me of the oft-quoted adage from Mike Tyson. Everybody has a plan until they get punched in the face. We're wondering if the Fed, and especially Chair Warsh, is feeling the same this morning. Here's the numbers that they're talking about the punch in the face, not the headline number, which came in as expected at 06, yielding that 3.7 year-over-year. It was the core number up a 10th higher than expected.

0.3% yielding a somewhat higher year-over-year number at 2-6, going the wrong way now. That's the key. How do we go the wrong way? Well, because of energy, 9.3%. That's a monthly gain, ladies and gentlemen. That's the big rise in diesel and gasoline. Airline fares, that's where energy bleeds into the core. Used cars up as well.

Hospital services from 0 to 07 and shelter. That had been helping a lot. It's responsible for a big chunk of the core surprise this morning. year surging in the wake of that number, but then along with a 10-year, but broadly unchanged on the day. Not exactly sure why that is, but it did come back down to where it was. A note, Frank, that it could have been worse. The actual core increase, 0.335. That means it was this close to rounding up to a 0.4% increase. Tomorrow's PPI, that's going to be key. A hot report could make it really tough for the doves to justify an October pause. And Frank, I'm sorry about that punch in

the face metaphor there from Mike Tyson. I don't know why you're sorry about that. By the way, second Mike Tyson reference here at post nine today. So it seems to be a bit of a Mike Tyson theme. By the way, I don't want to get punched in the face by Mike Tyson or anybody else. Steve Leesman, thank you for illuminating the CPI report. Always good to see you. All right, coming back to the panel, Brynn, I want to come over to you.

What are the implications for the market of at least one more Fed hike? As Steve just mentioned, if PPI comes in hot tomorrow, it seems like it's going to happen in the meeting coming up later this month. I think it's important to point out that the two years settled a bit. I don't think we're going to get a hike before the midterms. Just we have a meeting in December. So if we get one, I think the higher probability would be in December versus right before a very, very, we'll say, contentious midterm election. And so to me, maybe it's December, which actually would give the Fed multiple more readings

to see. But I think that Gouldsby's commentary of discouraging his verbiage was very important, right? It is discouraging. I do think we need to like watch out. for oil and diesel, et cetera, because those can move down as quickly as they move back up, but that's a big if. So I think this is another reason why markets are just in this, like, washing machine going back and forth. And so with all things else being considered, the markets are going to go down on this type of news.

Yeah, certainly a lot of ifs when it comes to the energy market. Keith, I want to come over to you and back to your call of being overweight tech. If we do get a fed hike and or hawkish tone in the press conference afterwards, does that change your view on tech just due to the cost of the AI build out increasing with rates going up? No, I think actually it reinforces, especially the mega-cap tech, because even if rates go up on the margin, the secular growth will likely continue to overwhelm it. I think it's, you know, the less quality players is where you have a concern.

And Frank, just maybe a couple of things I think is worth pointing out around the discussion. One, I think it's important that we saw the 10-year Treasury go up to 530 today and come back down to below 520. If you're a bond investor, that's a positive. We just saw, you know, the front of the economy, talking about a potential bond blow up, the IMF talking negative about fiscal deficits. To us, that's more of a contrarian indicator. And we see value now in the 10-year Treasury where it is today.

And then going back to your question about the Fed, when we test this out historically, the market after the first rate hike tends to be pretty choppy over the next one to three months. As you extend your time horizon over the next year, markets tend to rebound as long as you don't go into recession. That is our call. So all in all, we still think this. this bull market, which just Terrant 4 has more to go. The history suggests that, though, it will likely continue to be, you know, somewhat of a bumpy path.

But the good news is we are also now seeing some alternatives beyond just equities, even though we still do like equities. Yeah, I think a lot of people are looking for some good news today, Keith. Courtney, I want to come over to you. We kind of talked around it. Britt mentioned it, Energy. I'm looking at the earnings estimates for Q3 for the energy sector. 123% earnings growth.

Is that a place to go to right now? Yeah. Energy has always been a core part of our portfolio. And this year is a really good example of that. That is outperforming a lot of other sectors right now, which is great. But I think with energy, the question is, do energy prices stay this high? And I think the hope is for consumers that that comes down, because clearly you're seeing that read-through is happening through inflation. But even if it does come down, these energy companies don't need oil prices to stay this high for them to be profitable. So I think this is going to continue, especially to the AI build-out happening. There is not enough energy at this point. there's too much demand compared to the supply, that that is going to continue to be a trade, no matter what's happening with energy prices right now.

So yes, I think you want to continue to own it and have that as part of your portfolio. And look at the XLE up over a half a percent today. Courtney, Keith and Brent, thank you so much. Great to see all three of you. Thank you. All right. Now I'm going to get to some of today's big movers, including the banks under some pressure, as another round of earnings just fails to impress the street.

Our Leslie Picker joins us now with much more. Leslie. Hey, Frank. Yeah, it was a very busy quarter. Bank of America shares, for example, under pressure. after reporting a drop in earnings due in part to a $1.2 billion regulatory penalty over violations of anti-money laundering and sanctions laws, we asked Chair and CEO Brian Moynihan earlier where the breakdown was and how close the firm is to fixing it. We put lots of resources against thousands of extra teammates.

We've lowered the thresholds of reporting that you can see reflected in some of the technical areas. It took us a while to get eye to eye with the regulators about what exactly they wanted our role to be, because we file a lot of SARS. And so the good news is the penalty went through the last quarter. The good news is we've built up the resources and are deep into remediation activities and we'll resolve it like we've done with many issues in the past in this company. As for B of A's third quarter, the Main Street side did outperform while the Wall Street side think investment banking and sales and trading were the weaker spots there,

especially relative to peers. One such peer is Morgan Stanley, which beat on. on both lines this morning, but not by enough to impress investors. The key for the sector, though, is the deal pipeline, something Morgan Stanley's CEO, Ted Pick, told us earlier that he continues to be bullish about due to pent-up demand and a reasonable regulatory environment while noting, quote, that clock may be ticking. Now, if interest rates were to get away from us, and that was on the back of a lack of control over inflationary expectations or real geopolitical noise, that's a real geopolitical noise,

then I would expect volumes to go down. The IPO windows are market sensitive, so they would be more closed or more opportunistic. But that's not the way we're thinking about it right now. We're thinking that the windows are open for the right structure. Investors are discerning. Meantime, shares of Morgan Stanley down nearly 3% Bank of America down 5% Frank. And those comments, too, from Pegg really echoed what David Solomon told Kate Rooney earlier today.

Goldman Sachs CEO, just about the IPO window being open just at the right price, essentially. Leslie, really great interview with Morgan Stanley's CEO, Ted Picker earlier. Really interesting comments and his thoughts about AI and the generational opportunity there. That's on CNBC.com for anybody wants to watch. Leslie Picker, thank you very much. Great to see you. Thank you, Frank. All right, listen over to Brandon Gomez for a look at some of the other big names moving into the close. Brandon. Hey, Frank. Let's start with a group of stocks. Dell Technologies, Hewlett Packard Enterprise, and NetApp, all sinking today after Barclays downgraded the stocks, equal weight from overweight. Now, the bank warning that enterprise hardware valuations have surged

ahead of meaningful AI-driven demand. Dell leading the pack lowered down almost about 11% now, despite rallying over 300% on the year. Meantime, shares of Italian tech company bending spoons soaring after Berkshire Hathaway announced an additional $330 million investment, bringing its total stake in the company to 4%. Berkshire previously invested 600 million in the parent company of Eventbride in Vimeo when it debuted in July. You can see that. stock up about 40% now. And finishing things off on ASML falling after the Dutch semiconductor equipment manufacturer reported a slight miss on its third quarter net sales. Compared to Wall Street estimates, you can see shares there down about 2%. Frank.

All right, Brandon Gomez. Thank you very much. Good to see you. We're just getting started here on closing bell. Coming up next, Kate Rooney is following the money on one of the most anticipated IPOs of the year. Of course, that's anthropic. We are live from the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back to closing bell. The financials behind the AI boom taking center stage today. Anthropics set to reveal new revenue numbers to potential investors. Kate Rooney is live at the Goldman Sachs Builders and Innovators Conference and joins us with much more on the story. Kate.

Hey there, Frank. So about an hour south of where we are right now in San Francisco, Anthropic, from what we're hearing, is holding an investor day and does plan to disclose its third quarter financials. This meeting is with about 120 institutional investors. in the Bay Area. This is according to two sources, and people familiar with the matter, it does come as the AI giant plows ahead on what could be the largest IPO in history. Anthropics numbers will be closely watched, especially given just how much of the growth of some of these private AI giants right now matters to the broader markets. Open AI. And Anthropic are some of the largest customers of a lot of the chip names out there. Think of Nvidia, also the major cloud providers. I did sit down here with Goldman Sachs CEO,

David Solomon, here's what he said about those potential mega AI IPOs. We don't have a lot of, we've got, show me the large language model, large company that's come to market for an IPO. I guess we're going to learn a bunch over some period of time in the future. Assuming that anthropic and open AI go public will learn a bunch about exactly how public market investors will look at that and value that. And Frank, any perception of weaker revenue projections can royal markets? We saw a bit of this last. week with some confusion around a report detailing Anthropics rival Open AI and its revenue and a change in accounting. That momentarily dragged down some of the biggest semiconductor names and the

broader NASDAQ as well. Anthropic has filed confidentially with the SEC that was earlier this year, but it hasn't made that S1 public. We are awaiting that and the company will reportedly list in November. Frank, we'll let you know if we get those numbers from today, but that's the latest that we're hearing. Kate Rooney, great reporting there. A lot of anticipation for that IPO very obviously. very much. Now we want to bring in CNBC contributor, Big Technologies, Alex Cantorwick. Alex, great to have you here. Good to be here. So you and I were talking before we got on air. You said 518 billion. That's the magic number that everybody's focused on. Why is that number so important? And is it good that Anthropic has these obligations or bad? Because I remember when

CAPX was a great thing. Right. So, I mean, Anthropic, if you'll remember from the leaked numbers, had something in the neighborhood of $4 billion in revenue in 2025. That was accompanied by $518 billion in obligations on compute and infrastructure. infrastructure, 80% of which is reportedly uncancelable. And AI companies, they need to make these big infrastructure bets in order to survive and thrive because the demand for their product has grown so quickly, exponential really, that if they were unable to meet the demand, then there goes the company. People can easily go from an open AI to an anthropic and an anthropic to an open AI.

But that being said, I think the number, even though infrastructure has been seen as good, I do think that number is a little scary. It sort of shows the tenuousness of what we're rushing into, what the market is rushing into, because these AI companies are building a new category. It's unproven technology. It is a belief, really, that it will continue to grow the way that it's been growing, and they'll be able to make good on those obligations. But we'll see.

Okay. I want to sit you up with that because obviously we're waiting for some big news, revenue numbers from Anthropic. Where are we at with them and the sentiment around their company? company and the IPO coming up. I mean, do they have to really beat expectations or there whisper numbers out there that they have to be taught? Just kind of walk me and talk me through it. Well, I think last week we saw some jitteriness around the AI trade and what's going on with the private AI companies. Because the market, I don't think the market is sure what to think about these

companies. You know, there's been this private reporting. In places like the FT, for instance, the FD had the open AI numbers. You know, there was an initial report that it was 70 billion on the year, then it went to 50 billion. And you saw this. massive reaction, even though it was just like a way of counting that had changed, not the actual numbers. So the market is looking at everything, and it's similar with the big infrastructure buildout, saying we think this is going to keep going, but we don't really know. And so any little wobble in the story can have broad repercussions like we saw last week. We're seeing a little bit today with the pullback in the semiconductor names. And so, you know, is there a whisper number? Not really,

but like if Anthropic doesn't come out and show 10x growth on the revenue that they showed at the end of 2025, at least, that's going to be a problem. Well, then there's kind of a whisper number. It's got to be at least 10. I want to go back to Cape Rooney's. Let's say it out loud. Let's say it out. I got it out. You're clearly doing that. Let's get back to Kate Maroney's interview with Goldman Sachs CEO, David Solomon. They were talking about the idea of this Anthropic IPO being the biggest of all time. I was here, I was here, I'm looking at the chart. SpaceX is negative year to date. If Anthropic IPOs, what are you expecting? And does this kind of set the tone for the AI trade for the rest of the year if it does IPO more than likely before Thanksgiving? That's kind of the timeline people have put out. Yeah, I think it is going to come out in November, and it's going to be a big one. A lot of what you're seeing now, again, is sort of hinged on this belief that Anthropic is strong. The market's going to have a chance to make a decision on that.

We're going to see more numbers, you know, maybe very soon as these numbers that Anthropic presents to investors leak. And investors will just make up their mind in terms of whether they believe that this is a business. worth buying. And I just want to stress again, this is not a normal business. It's a business that's grown extremely fast in a short amount of time. It's hard to evaluate it like the way that you would evaluate normal business because so much of it is projected into the future. Again, like $4 billion in revenue, $518 billion in compute commitments. That is a belief. That is a belief type of trade or a belief type of company, not necessarily a company that you have the hard figures to judge like you would a typical IPO. So as much as I hate to say, this is going to

part numbers, part vibe-based, that's what it is. And if the vibes could go one way or the other, so we could see very, very divergent outcomes here. We're back to vibes. I didn't see that coming. Welcome back. Always good to see you. Thank you very much. And tomorrow, you don't want to miss a special look at AI in America, live from one market in San Francisco for both halftime and for closing bell. The judge will be back. Big guest include Altimeters Brad Gerstner and the CEOs of Snowflake, Palo Alto Networks and reflection. Again, AI in America for both halftime and for closing bell. All right, coming up, the market's next big move with the charts are telling us about where stocks go from here. Renaissance macros Jeff DeGraf is here with the key

levels to watch. Closing Bell's back right after this break. Welcome back to closing bell. Stock's under pressure today after a hot-than-expected inflation report show consumer prices jumping in September. So what does this mean for the market's next move and where should investors be looking for opportunity? Here to discuss is Renaissance macro research chairman and head of technical research Jeff DeGraff. Jeff, thank you for being here. Thanks for having me. All right, I want to get to the technical moves in a moment, but first I want to start with this. We had Bryn talking to earlier this hour saying that she's seeing a lot of positive momentum and defensive sectors.

You say this tech money. By the way, tech's lagging. Healthcare is leading. You say tech money's going into health care. Explain. Why is the money going there? Well, it tends to be a natural ying versus gang. You know, if I were to start a hedge fund, I'd probably make it tech focused and health care focused because when one's in favor, the other's not and vice versa.

So you have a defensive aspect to it versus a little bit more blue sky aspect to tech, and yet there's still this growth underlying growth potential. So that tends to, you know, it's worked throughout time, and it seems to be working here, at least today as well. And I think that will continue. I mean, healthcare has made a big bottom. They were, one is the most neglected sectors that we've ever seen, frankly, in the 50-plus years of data that we have.

in terms of alpha-adjusted returns, and it's just starting to emerge. So I think it's good news. Maybe it's because they're gonna be the beneficiaries of using AI versus producing AI. We'll see what the narratives come out. But certainly there are good charts there. All right, I wanna dig in on the tech weakness a bit.

You've been doing some research on this, specifically the memory names. A lot of downside action when it comes to the memory names. I'm looking at the charts. The DRAM ETF down more than 16%, month to date. Seagate down 22%, Western Digital down almost 20%. You say this is at least in part due to short selling. Why are people short selling right now?

Well, I don't know what their narrative is, but look, keep in mind that this is the post, the post environment of a bubble situation. And people can debate bubbles. We have a quantitative way that we measure it. It triggered in our work. And it just says to us that, hey, you get an initial crack, which we had, and that really played itself out through, you know, roughly August. You tend to get a rebound that is anemic. That's exactly what we saw.

A lot of names didn't even get overbought. and then you roll back over. And our mantra to clients for the last six or seven months now has been shoot them in the back, right? You don't need to sell them on the way up. You want to sell them on the way down, particularly when they start rolling over. And I think we're in the zone to be doing that

with a lot of names. The memory names seem to be just that. Now, there were some rumors or some news out of China that they might have cracked the code to some of the DRAM. I don't know if that's true or not, but obviously the markets are reacting to it. It wouldn't surprise me, frankly, because when you see peak margins, what does that do?

Well, it invites competition, right? So there's a lot of incentive to go and see if you can solve those problems. And that's why peak margins don't always impress us. Sometimes it make us pretty nervous because it does invite the competition. So I think it's going to be a combination of things. But technically speaking, you know, these were vulnerable names. They're looking more and more vulnerable as we go. All right.

You're also looking at real rates. We're talking a lot about yields, but you're looking at the real rates. You say they're at 20-year highs and some of that weakness is spilling out into other areas in the market. If you're an investor, you're concerned about this. What area should you be the most concerned about right now? Well, high real rates are tightening of financial conditions, right? So you should be worried about high-levered names. You're seeing that with things like CoreWeave today.

You should worry about things that have to go to the markets to finance or refinance because those are going to be most vulnerable. This is Fed credibility. The markets are telling us that they have the utmost phase in the worst-fred Fed. As it goes forward, five-year, five-year forward, those rates are very, very high. And what you see is once you have real rates in those tighter restrictions or those tighter financial conditions, they start to spill over into the public credit markets. We're seeing it in triple B spreads. We're seeing it a little bit in B and B spreads, not as much as we'd expect.

But, you know, when you start to get these things rolling, they tend to move up the stack. And so far that's been happening, albeit it's in a manageable condition today. but I do think that we're going to see these tightening conditions, particularly with today's inflation print, as we go forward, and that's going to be more troublesome for these highly levered means. All right, Jeff, the graph from Renaissance Macro. Great to see you. Thank you very much.

Thank you. Coming up next, we're tracking the biggest movers as we head into the close. Closing bells back right after this. We're now just about 10 minutes to the closing bell. Let's get back to Brennan Gomez for a look at the key stocks to watch. Hey there, Frank. Puella Weinberg shares falling 20 percent, and Piper Sandler shares up about 3 percent,

the Financial Times reporting that the two and, investment banks have abandoned merger talks after failing to find agreeable terms on financial and personal matters. The Wall Street Journal reported last month that they were looking at a tie-up. We've reached out to both companies, but have not yet heard back. Meantime, GameStop was climbing earlier today after a regulatory filing showing CEO and Chairman Ryan Cohen purchased shares worth nearly $23 million. This marks Cohen's second purchase of the video game retailer this month, increasing his stake to about 10%. Stock initially climbed to about 2% midday.

but is now down about a percent. And then ending things on State Street, sinking after the financial services companies, financial third quarter revenue missed Wall Street estimates, heavy cash flow, outflows, offset growth in the company's exchange traded funds. You can see their stock down about four and a half percent. Closing Bell, back right after this break.

We are now in the closing bell market zone. Mike Santoli and Kestra Investments, Kara Murphy, they're here to break down these crucial moments of the trading day. Plus, Oliver Renek is standing by at the Cibo Global Markets in Chicago, and Diana Ollick is looking at mortgage rates, It's Mike. We start with you as always. Yeah, Frank, obviously, you know, no room really for some of the stronger areas of this market to hold up the indexes as you get a lot of the credit sensitive names really flaring up today.

I do think it's less about treasury yields, which actually have come in over the course of the day in a flight to safety bid, and much more about credit spreads on top of that. So anything in the AI hardware food chain that consumes capital that is going to be dependent over time on more capex in debt, that's under fire. I also think it's happening with, you know, banks showing some weakness and even Mag 7 having maybe gotten a little stretch to the upside. I don't think it's sort of a decisive call at exactly where we go from here, except it's more of a reminder of the S&P 500 right back into this range that we sort of entered into in very early August. So we weren't able to get escape velocity after that all-time high yesterday. Maybe some earnings reports can rescue the story as we go on

from here. All right, Mike, we'll see you coming up in O.T. Thank you very much. When it sent things over to Oliver Wrenick, live at the seabote. Hey, Frank, overwhelmingly bearish options in Correve today with traders unafraid to take some deeply bearish shots, despite the stock falling near 52-week lows. The biggest trade of the day was a likely $18 million call sale at the 80 strike expiring in March. The second biggest trade was a $14 million put by of the June 2028, 40 strikes. And which because those trades cost $10 a pop,

they need the stock to drop 54% to pay off. And for most immediate attention, a buyer of 26,000, 37 and a half strike puts expiring mid-December. Those are 70-cent contracts that were opened as a speculative purchase looking for a 40% drop in two months. These trades look particularly doomy, but worth noting add on to about a week of tone change regarding bearish NASDAQ options, flows in general, Frank. Oliver Renick, live from the Cibo. Oliver, thank you. Want to go to our Diana Olin for a look at the move in mortgage rates. Well, Frank, after dropping back a little bit last week, the average rate on the 30-year fix rose 10 basis points today to 7.56% according to Mortgage News Daily. That matches where we were just a week ago. Rates are now well over one percentage point.

In fact, 125 basis points higher than they were a year ago. That has the home building ETF ITB continuing its rise. lower. It's now down around 8% in just the last month. Names like D.R. Horton, Lenar, and Pulte, all at 52-week lows, as these rates are really taking a toll on demand. We saw it in the mortgage applications from last week down again. And a report from Wells Fargo earlier this week said their monthly real estate agent survey went, quote, from bad to really bad. They said they were struck by the sheer pessimism with things likely to get worse via rates and midterm jitters. Frank. Diane Oleg, thank you very much.

We're just moments away from the close. This springing Kester Investments, Kara, thanks for joining us. Tech obviously having a weekday. You say it's now time to rotate into small caps and mid-caps. Why? Well, this has been a trade that we've been in for a while. Part of it is simply a risk play. When you look at the overall S&P 500 or other broad diversified indexes,

they're incredibly concentrated in just a handful of names. So simply from a risk perspective, you want to start looking at some other areas of the market. But it's also important to remember that you have an incredible amount of earnings growth that has happened in these tech names. But that earnings growth is starting to spread out. When we look at small and mid-cap earnings expectations, those have been climbing quite significantly over the course of the year. And in fact, you see it outside the U.S. as well. This is earnings growth that is not just in a handful of mega-cap names, so you want to be able to have exposure elsewhere in the economy. We've been talking about bonds all day. Yields have pulled back from the levels that we saw earlier after the CPI print.

We do have PPI tomorrow that could move yields in the bond market. You're saying right now there's kind of an interesting inflection point when it comes to bonds because for the last quarter of a century, the government's been able to put out bonds and it hasn't really been any issues. But if yields go higher, there could be. I think this is a really intractable issue, right? There are some short-term issues that the bond market is dealing with. Think like hyperscalor debt that needs to come.

Oil prices high. But the federal debt issue is something that has been around four debt. decades. Debt has grown under pretty much every administration since Truman. So that means it's a very American problem, not Democrat or Republican. But they've been able to do that because interest rates during most of that time period have been declining. So even as interest rate or even as debt climbed, the interest paid on that debt declined. That changed significantly a couple of years ago and has only gotten worse. So, you know, for example, if interest rates simply stay where they are for the next 12 months. The government will have to pay an incremental $500 billion in interest expense. That's

almost as much as what the federal government spends on Medicaid. So, I mean, these are really, really big numbers and they don't go away easily. Very quickly, we're almost out of time. Do you see any opportunities in bonds on the short end of the curb, the belly in any area? So with the increase in long-term interest rates, it's tempting to go out in duration, but given the flatness and the curve, we don't think you're really being paid to take on a lot of duration here. With the increase in short-term rates, the short-to-medium-term part of the curve, we think is still quite attractive. Kara Murphy from Kester Investment Management. Thank you very much. Good to see you.