Closing Bell - Closing Bell: 4/28/25

Episode Date: April 28, 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.

Welcome to Closing Bell. I'm Scott Wapner live from Post9 here at the New York Stock Exchange today. This Make or Break Hour begins with a bounce back for stocks and whether it can keep going as a pivotal week is about to get pretty spicy. We do have four mega caps reporting this week. The jobs report at the end of the week. We get to set up for everything this hour. In the meantime, we'll show you the scorecard. You're going to look at it now with 60 to go in regulation. Not a ton of direction today. NASDAQ, the under performer. Both Tesla and Nvidia are dragging that index lower. Utilities really the only sector with much of anything going today and even that as you see is not very much.

It's a bit defensive yet again bond yields are lower today too as we continue to watch the treasury market. Takes us to our talk of the tape today. Big techs, big moment with Meta, Microsoft, Apple and Amazon all reporting this week. We have our expert reporters at the ready. Steve Kovac on Apple and Microsoft, Julia Borsten on Meta and Kate Rooney on Amazon. Big Technologies Alex Kantrowitz is here as well for his own insights. We'll lean on that in a moment. Steve, we begin with you. Yeah Scott, so we got Microsoft reporting on Wednesday Apple on Thursday the two

biggest companies the world let's start with what to expect from Microsoft though I got two things for you to watch here first of all the AI data center build out there have been loads of port reports recently that Microsoft has been pulling some of its plan spending in those build outs so we're gonna be looking for comments on how much of that is related to tariffs or less demand now that Microsoft is no longer the exclusive cloud provider for OpenAI. Remember the $80 billion CapEx figure

that goes through the fiscal year ending in June. And we're gonna wanna listen for guidance of what CapEx looks like in July and beyond. Also looking out for commentary on businesses slowing IT spend amid economic uncertainty. We saw that really hit Microsoft back in 2022. Now let's talk about Apple reporting on Thursday after the bell. Going to get our first response likely from the company on how it's managing tariffs. Does that mean price increases, future product launches at risk, producing

things in India? We've been talking about all of those issues for several weeks now. And there's some expectations. There was a pull forward in demand on products ahead of the tariffs hitting this spring. Morgan Stanley out this with a note this morning, raising the price target on Apple and putting estimates for the March quarter above consensus because of that.

And then another question, are we going to get guidance? Apple hasn't reported guidance since COVID hit in 2020, just giving some commentary in color what they expect. They might not say anything now, given all the uncertainty will find out on Thursday, Scott.

Alright, a good setup. Steve Kovac, thank you very much for that. Now we will send it over to Julia with what is at stake for meta this week as well. Julia well Scott, over the past year, Meta shares have been on a rollercoaster down from those highs and when Meta reports earnings, even more important than what it says about this quarter's numbers is what insight Meta gives about its future. Investors are watching three key areas.

First is commentary about Meta's AI spending and its AI goals, how it expects those AI investments to pay off. Second, there's a question of the broader ad market, whether Meta is seeing signs of weakness amid so much uncertainty. And then third, there's Chinese ad spending in particular. Analysts have flagged that tariffs could cause Meta to lose billions of dollars in ad revenue. In terms of the first quarter,

Meta's revenue is expected to slow its growth rate to 13.5%. That's down from the 21% revenue growth rate that the company reported in the fourth quarter. Earnings per share are expected to grow 12%. Now ahead of earnings tomorrow, we will hear more about AI at Metta's LamaCon conference. Mark Zuckerberg, along with Microsoft CEO Satya Nadella and Databricks CEO Ali Goetze will be speaking along with Metta's Chief Product Officer Chris Cox. They'll be talking about their open source tools for developers.

Now this event speaks to the company's aim to be at the center of the AI ecosystem and we know there is so much new competition. Scott? All right, Julia, thank you very much for that. Borson Kate Rooney now with the setup for Amazon's results on Thursday Kate Scott so similar to what Julia just mentioned with meta the focus for investors around Amazon is going to be on the outlook Given all of the tariff and certainty we've been seeing and then also what it means for the macro environment We have already been hearing

and also what it means for the macro environment. We have already been hearing resounding caution from the street around that China impact volume. Blair last week estimating almost half of sellers on Amazon right now are based in China and they say assessing the potential risk of the current 145% tariffs on Chinese goods. They say it's nearly impossible in that it would create a deep structural fissure

in the business. The firm citing a potential operating margin hit as a result. Others have called out the impact on China-based advertising as well. So that's an area to watch. Amazon does typically guide on revenue and operating income for the current quarter, and then analysts are going to be listening for any changes to those CapEx plans. The last update we got was $100 billion for the year. And then the AI story, that's really around Amazon Web Services.

It's still important for the tech side of the stock. Streets expecting 17.5% AWS growth. That typically is the number that moves the stock. Commentary from CEO Andy Jassy around all of this on the call is going to be pivotal. 93% of analysts at this point still have a buy rating on Amazon. About a third, though, have lowered their earnings estimates. And the results on Thursday, average price target still bakes in about 34% upside from where the stock has been trading today although it's been down so

far this year about 15% Scott back to you. Alright a nice setup there Kate Rooney thanks so much we'll lean on all of that as we get even closer to those numbers now let's get the insights of Alex Kantrowitz of Big Technologies the CNBC contributors good to have you here. Great to be here. You heard all of our expert reporters put all of this into focus, exactly what matters most. Dan Ives of Wedbush says to expect strong results. Wall Street Journal today talks about a reckoning for the MAG-7 because market performance wise, they're off to their worst start since 22.

I read that Wall Street Journal article and it was really funny, it's after listing all the reasons not to buy Big Tech. At the end it says people don't want to buy bonds They want equities and they're probably going to go to Big Tech So Big Tech does have a baseline level of support in this economy from investors And I think all three reporters that were on right before me said the crucial thing Which is it's gonna really depend on what the outlook is going to be for the next quarter if there are prophecies of doom You could see further pullback on these stocks.

What if there's prophecy of fog? Fog, it leaves us where we are right now. But I think, look, if it's stay the course, stay the course hasn't been bad because there's a story behind all of these companies. If it's just, well, we're not 100% sure what's going to happen as opposed to, let's say Meta says we're seeing a pullback in advertising or Amazon says we're seeing 100% sure what's gonna happen, as opposed to, let's say Meta says, we're seeing a pullback in advertising, or Amazon says we're seeing a pullback in the consumer, or Microsoft says we're seeing a pullback in data center.

If it's just we don't know, I think that's actually a positive sign, because you would expect that the negative things that we're gonna see in the next quarter are already happening. So, you know, uncertainty to me is fine right now with big tech. You think that the CapEx spend is gonna stay steady?

That's the word you gave our production team today, steady. So we've heard some whispers and maybe some grumblings of go to pull back a little bit or speak to the broader economic narrative. What do you really expect? I expect steady. Now I spoke with Microsoft's AI CEO, Mustafa Suleyman, a couple weeks ago about those data center pullbacks.

Okay. His explanation to me was basically that companies like Microsoft will option data centers all the time, and sometimes they don't pick up those options, and that becomes headlines of people saying they're pulling back. So there's a chance what's happening is the companies anticipated a lot of demand because of AI They optioned everything and now they're saying we're not gonna pick up some of the options and people are like they don't want data centers anymore You feel like that was spin that you got or was it the real deal? Maybe somewhere in between

I mean, I just I did the AI models right now are performing better than they ever have they're actually living up to the promise Copilot speak about speaking about Microsoft copilot right now is performing better than they ever have. They're actually living up to the promise. Copilot, speaking about Microsoft. Copilot right now is becoming a real tool. Not just this annoying thing that shows up in Outlook. I mean, companies everywhere are using it. They're actually getting real usage as opposed to just like another notification in your system that people count as a user.

So I think that we're gonna continue to see a ramp in usage. Now remember, we go back to last year when there was all this hype, and in that moment, the idea was that everybody would use AI all the time by now. That was always unrealistic. We've talked about it on the show that that was unrealistic. However, this is ramping, it's moving,

and maybe it's not this coming year, but in a couple years, I expect that everybody's gonna be using this stuff in the workplace. Is there one of the four this week that you're watching more than any of the others? Yeah, I mean, Apple to me is the really interesting one in particular because we're going to see the impact of China demand. Now, of course, a lot of this happened in the first in the second quarter, right? Our liberation day was in the beginning of April, so we're not going to see all the data

necessarily on the beginning of April, so we're not going to see all the data necessarily on the beginning of the year. However, Chinese demand for Apple, extremely important, 17%, 18% of total revenue. And there's two sides to these tariffs. One is the tariff on the exports, but the other thing is, what does it do to the markets that we are tariffing? Because if the tariffs end up hitting demand coming into Apple from China, and we know there's already been receding demand from China for Apple products, if we get commentary that that is a big problem for Apple

and they're gonna have to disclose it, I think that's gonna be a real issue for that company moving forward. That's one of the things with tariffs that you can't take back. A lot of this you can take back. With that, the cap might be out of the bag and there's no putting it back in.

What about exemptions? How long they might last? What they say about that? Potential price hikes that may come out of all this? So I'm operating under the assumption that almost all this is going to end up being rolled back, whether that's through deals or some sort of capitulation from one side or the other. There's just no realistic world where we're going to see 145% tariffs on China for years. It's just, it's not feasible. And the government is out there in private meetings

saying that, best in saying that straight up. So, you know, we could see some exemptions, but ultimately if you're Apple, you just don't want this to go on for too long. And again, it is the demand thing. And then also, there's been talk about the company moving to India to manufacture. That's not realistic either.

Because Tim Cook has talked about this explicitly. There's knowledge within China, knowledge about the tooling. It's not just low cost labor. It's the actual tooling. It's the expertise. It's the supply chain within China that you just can't quickly switch over to India. There's been some move to India, but again, it's not gonna happen overnight. What you got out of Alphabet, did it help you think about these in any way differently than you did?

You otherwise would have? Well, for Alphabet Q1, again, like we were talking about earlier, there's gonna be a lot of information about Q1 that isn't gonna necessarily be a read through to the next quarter because we haven't had a liberation day in Q1. But that being said, I'm very impressed with Google.

I mean, Google's got a profitable growing ad business. Search isn't dead. A couple years ago, people were talking about how it's the end of search and Sundar Pichai should be fired. And now it's very clear that search ads are extremely healthy and search is growing even as ChatGPT grows, which suggests

that it's not one or the other. There's uses for each. And if you invest in Alphabet, you have Search, you have Waymo, you have the investment in Anthropic and you have DeepMind, which for my money is one of the best AI labs out there that is going to continue to ship and push the cutting edge forward. I'm surprised you didn't talk about Meta as being so top of mind because the regulatory issues and the overhang there, we're going to get a chance to hear, you know, not in a courtroom from

Mark Zuckerberg, who's going to talk about what the issues might be and how they might be resolved in the future. So I was in Washington, D.C. over the weekend for the White House Correspondents' Dinner, not the dinner itself, but some of the parties around it. And I asked everybody what was going on with Big Tech because it's Metta's in court right now and Google's just lost a couple cases. And the sense I got there was Metta just does not have enough friends in Washington, D.C. One way or the other, Mark Zuckerberg and co. have alienated many lawmakers, many lobbyists,

many supporters, and right now they're in court. And it doesn't seem like they were quite as careful as Google was. A lot of the sloppy emails are coming out. So with Meta, you have to pay attention to this. We've already seen Google has lost. And I think they have like one appeal left. And then they could be split up should the judge decide to go that route.

So you're right. This is a very big deal for Meta. And Meta also has the big tariff situation because it has billions of dollars coming into its ad product through Chinese retailers and advertising it's an advertising business dependent on advertising as a whole so to me that's the immediate concern because if we go into recession and a lot of people are saying that's where we're heading the first thing that happens is an advertising pullback in

recession advertising marketing dollars gone if that happens meta is not as strictly performance as a company like Google, which is doing well. It could be a very big problem for them. So yeah, I definitely want to hear what Mark Zuckerberg has to say. All right, we appreciate hearing what you have to say. Alex Kantrowitz, Big Technology and the CBC contributor,

thank you very much. Thank you. We are getting some news out of Washington today. Emily Wilkins has that for us. Emily? Hey, well, House Republicans are planning to move forward on a provision that would consolidate antitrust, taking it out of the hands of the FTC and putting it solely within the Department of Justice. Now this provision that they're going to be looking at and voting on come Wednesday, it's a part of

the much much bigger plan for Trump's one big beautiful bill. Congress is now working on the actual policy details of this legislation and while the idea of consolidating antitrust within the Department of Justice has been around for a while, it recently did get a boost from Elon Musk who said it would be a good idea and it's something that lawmakers have generally been behind. Of course we're now only at the start of the process of putting really the meat on the bones of this one big beautiful proposal So of course long way to go to see if it actually gets across the finish line

But something we've know now know that Republicans are putting forward onto the table The key word that you use in terms of at least to me is solely so you're suggesting that they would they would take the FTC out of the antitrust process altogether. Even though both the FTC and the DOJ are at the direction at least of the of the president, the FTC currently the FTC is still an independent agency in which the DOJ is not. That that's the big difference here. And a lot of this goes back, yes, I mean, a lot of this goes also to funding,

to the funding that Congress is going to allocate. And so basically what this bill says is, hey, everything that FTC has with antitrust right now, the employees, the equipment, all of that needs to move over to the DOJ. And of course this is coming as there's a lot of questions about cost cutting, a lot of questions about, I think, government oversight, regulation.

So a lot of that really is at play here as Republicans are considering making this move. Interesting. Very interesting potential development. Emily, thank you. Emily Wilkins in Washington for us. We do have more breaking news from D.C., from the Treasury and for that we go to Megan Casella with those details. Megan.

Hey, Scott. So the Treasury Department is out just now with its latest borrowing forecast. They're estimating they'll need to borrow $514 billion for the second quarter. Now that is $391 billion higher than the initial forecast from February. Treasury says that's largely due to a lower than expected cash balance to start the quarter. They ended Q1 with just $406 billion in cash on hand when they had expected $850 billion. Agency officials told me that was because of debt limit constraints. Those have forced them to spend more cash rather than keep a week's worth of funding

needs on hand in cash like they typically would. And Scott Wall Street had been expecting the borrowing estimates to rise, but $514 billion is higher than any of the forecasts I had seen. So that need for further borrowing is putting a little pressure on yields. The 10-year is around its lows for the day, about 4.2%. Now looking ahead, Treasury says it expects to borrow 554 billion dollars for the July through September quarter and to beef up that account balance to end the quarter with 850 billion dollars in cash, but again that could change Significantly depending on what happens with the debt limit in the coming months on Wednesday morning Scott

We'll get more details on the auction size as expected here and the breakdown in tenors all along the curve in recent years As you know that release has had the greater impact on the market than this one. Scott? Was there maybe any expectation at all that any of the tariff revenue that's coming in now would potentially make for a smaller number than we just got? It's possible we see that in the future. I think it's a little too early to see that now. Agency officials were asked about that and they said all of their forecasts

while they don't get into individual line items do take into account the forecasted tariff revenue but that 554 billion for the next quarter that takes into account that there will be some increase in tariff revenue they still think they would have to borrow that much. All right Megan thanks for that. Megan Cassell outside the White House as you see. Let's bring in Anastasia Amoroso now of iCapital and Lauren Goodwin of New York Life Investments. Good to have you both with us.

What are we supposed to do with the markets now? You know, we've got about 50% of the losses back from the February high to the post-liberation day low. Is there momentum still? Would you be more positive on stocks at current currently? Yeah, unfortunately, we're at this juncture where we can argue either side of the equation. I'm going to try to do that. You know, I think short term patience is still going to be required, although I will say the fundamentals, the catalyst and the technicals are starting to be better

aligned. So let me just expand on that a little bit. You know, I think last week was actually pretty pivotal, Scott, because, you know, first of all, we got some positive technicals and the fact that we have 61% of stocks that we're advancing at some point on Thursday or Friday. So that snapback is very positive. And then also, Scott, we're now coming towards the tail end of the earnings reporting season, which means companies will be able to execute their buyback. So the largest buyer, which is the corporate, is gonna be back in the market. So I like that, but of course, as I talked about before last week,

it's not just about the technicals that alone does not move the markets, it's about the catalyst. And the fact that we have, I would say three categories of catalysts that are lining up positively. You've got trade deals, maybe we're gonna hear more on that front this week.

We've got rate cuts. The Fed is now gone to deliberate ahead of the FOMC meeting. But I think the consensus must be building for some sort of a rate cut come June, if not before. And then, of course, we also got big tech earnings, which I actually think if you extrapolate Alphabet into this week, could be positive. So I think near near term, I could see that momentum from last week continue. I feel like that's kind of the consensus Laura right now

that, you know, from a tactical standpoint, bullish, but bigger picture from a technical standpoint, maybe bullish, but from a bigger picture fundamentally, it's really anybody's guess. That's like what Tony Pascorello Goldman was talking about today, that the technical factors have finally tilted positive, but the fundamentals like, okay, all bets are off. Yeah, I think that's right. Investors are

still looking for more clarity from the macroeconomic backdrop and they're not going to get it. Even in a week like this where we're finally starting to get some hard economic data that could give an anchor around some of the rapidly deteriorating business and consumer confidence, we're going to see a mixed bag of economic outcomes where consumers and businesses are pulling purchases forward to get ahead of tariffs. Does that mean things are as good as they look? Does it not? Investors really aren't certain, but I think what this what we can take from this environment are a couple of factors. First, alongside the

volatility, we're starting to see asset correlations. The way that different asset classes would typically behave together break a little bit. We're also seeing different parts of the world, you brought up structural themes, invest in a different way than they have in the past. That means for an investor that's facing a lot of uncertainty, you might actually say, even sitting on my hands, I might want to make some changes to adapt to some of those long-term themes jobs report on Friday The loons especially large. I mean you could easily make the case that just given the questions that exist about the state of the economy the state of the trade war and what sort of hiring practices are going to be on the Receiving end if you will of all of that uncertainty,

that you get a pretty good read, even though it's a lagging indicator, because it's for the month of April, Liberation Day was a while ago at this point, you get a pretty good read. Yeah. I would argue, Scott, this is probably the most important data point

that we get is on the labor market front versus some of the Mach 7 earnings, and the reason for that is, if you look at everything else out there, like inflation, for example, which is forecast to be 2.6 percent year over year. If you look at consumer confidence it has been in shambles. If you look at business sentiment it's really all of that is lining up for a rate cut. What's not yet made the Fed think they are due for a rate cut is the labor market.

But if you see the number of job openings on Wednesday weekend, if you see some cracks form in the initial jobless claims which by by the way, I would expect given what we're hearing about the shipping channel, and if all of that gets solidified with weaker than expected payrolls report, I think that really solidifies the case that the Fed needs to move. And by the way, given what we just heard about the budget deficit and the funding gap, you know, I think this is the playbook of the administration is raise the tariff revenue.

In the meantime, get the economy to be in such a shape that warrants a rate cut. It's interesting that, you know, now we have the Dow up 100. It's been a pretty volatile tape, not a huge range, but volatile nonetheless. Is this the environment we're living in for a while now? It's absolutely the environment that we're living in. In fact, I think the 10% that we've moved up, 10, 12% from the lows, puts us in a position

where volatility is in fact more likely to operate on both sides. I think that's true not only for the equity market, but also for the bond market as well. When we think about the 10-year treasury yield, I expect a wide range of outcomes between 4% and 5% over the next couple of months. And when it comes to some of the data and the evidence that we're looking at this week in regards to that, I completely agree with Anastasia's analysis on what the job market might bring. I don't think we're going to see it yet.

I don't think we're going to see real evidence of change yet because if I think about the portfolio companies we're talking to, the businesses that we're talking to see real evidence of change yet. Because if I think about the portfolio companies we're talking to, the businesses that we're talking to, trying to get a sense of what's going on, there's so much uncertainty that you're not even sure that you should fire yet. You might not be hiring, but you're not making big changes to your business,

especially only a few years after the pandemic, where hiring and repositioning folks was so challenging. And so where I'm particularly looking for evidence is actually in earnings growth. Because if we start to see a slowdown in earnings growth relative to recent history, that might tell us that employers are starting to make changes in a way that might not show up in the job creation.

I mean, at this point, isn't that kind of your base case? In other words, how could we not end up seeing changes for earnings growth? I think we already are and expect even more now. That's right. Especially I mean, the cyclical backdrop was heading there anyway. You're absolutely right. And so I would expect to see more over the next couple of months.

Whether we see that on Friday, I'm not so certain. What's a better better bargain, so to speak, right now? Bonds or stocks? Because I've had some people in the last week take a look at where bond yields had gone and say this is an incredible opportunity for treasuries. What do you think? Look, I can make a case for both.

And first of all, if you're really trying to hedge a recessionary outcome in the portfolio, and by the way, we may need to do that because the second quarter is gonna be all about the realization of these negative impacts, bond yields typically move lower and they move more than they already have. So you could see them move by 50 or 100 basis points more.

So in which case that is a great entry point. But at the same time, for long-term investors, when I look at the multiple, which has been due risk for a lot of the high growth names, and if I look at some of the technical indicators out there and if I think about the percent of bearish sentiment, all of that sets up a pretty attractive entry point for investors.

I would just caution Scott and say it's not a moment when you have to make this change. It's a period of adjustment. And that's what the second quarter is all about. It is interesting nonetheless, Lauren, that we went from, you know, obsessed and fixated on the fact that bond yields were backing up. And now we're going to start watching yields going down. And we're going to say it's for the wrong reason because now it's because of worries about the economy.

So we've in a week changed our whole perspective perhaps on one part of this fast changing market, right? Yeah, absolutely. I mean, look, bond yields can move for three reasons. The path of the Fed funds rate over that tenor, so let's call it 10 years has changed. We're not seeing a lot of expectation on that front inflation expectations obviously more volatile even a little bit on the long end and then the term premium and the term premium is all sorts of supply and demand factors

and this is where we're starting to see correlations in the market break down and what i when i see that type of behavior volatility in the 10 year and behavior, volatility in the 10-year and differences in volatility between the 10-year, oil, gold, the US dollar, that's when I start to think that in addition to some of the ideas that Anastasia is sharing with us, we need to rethink just overall asset class diversification. How is a portfolio constructed? And so in addition to focusing on quality and an equity portfolio, acknowledging that we need to be tactical

and prepared potentially for recession risk, I'm also looking at preparation for inflation risk, having a little bit of gold, real estate, inflation aware asset classes, and a sector balance that's focused on some of the structural themes around digitization, electrification, alongside these asset classes. Where I'm not taking risk is duration.

Yeah, 60-40 seems like, so like yesterday, so to speak. We need to talk more about that and we will. Ladies, thanks for being here. All right, we're just getting started here on Closing Bell. Up next, Ed Yardeni's back. We get his read on Q1 earnings, what the growing dovish faction at the Fed could mean for rates in the months ahead.

There's a meeting coming up. We're live at the Stock Exchange, New York Stock Exchange. You're watching Closing Bell and CNBC. Welcome back. This week's jobs report could be pivotal in understanding what the Fed's next move might be, especially with concerns over a slowing economy intensifying lately. Let's bring in Yardeni Research President, Ed Yardeni, for more on what he's watching. Welcome back. It's good to see you. Thank you, Scott. Get to the Fed in a second, but just your view right now of this market, which has rallied back pretty hard. Now what?

Well, I think the market's been choppy since the beginning of the year, mostly choppy to the downside. Now maybe we're going to get, well, in the past week or so, we've had a lot of chop to the upside. I think it's going to remain choppy. I downside. Now maybe we're going to get, well, in the past week or so, we've had a lot of chop to the upside. I think it's going to remain choppy. I think the trade issue is still going to hang over the market through early July. And certainly the issue with regards to China and what that implies about price inflation

in the United States and empty shelves and stores. So I think at this point, choppy is probably the way to describe it. But I think the market point is that choppy is probably the way to describe it. But I think the market may actually be doing what it's supposed to be doing. And that is looking out beyond the next week or month.

I think it's actually starting to think about 2026 and anticipating that a lot of is the crazy craziness will be behind us. I mean, you really think any part of this market activity that we've witnessed in the move back up from the lows has to do with that. I just feel like it was oversold.

We're coming back. We're not sure what's going on. And we can't even look, you know, five yards ahead of us. I have a hard time believing we're looking 10 months. That's a good question. Look, I think that historically corrections tend to occur when investors worry about recession that doesn't happen and bear markets occur when the recession actually happens. I think we've seen a correction. I think we made the low on April 8th, the day before the postponement

of Liberation Day for 90 days. I think the market at that point started to anticipate that maybe there wouldn't be a recession. There might be a slowdown in the second half of the year. But to the extent that this turns out to be a correction, which is what I think it's turning out to be, then I think the market's confirming, my view, that we're going to get a soft patch in the second half of the year and an improvement in 2026. So look, I think the market does look forward. It does look ahead. People look at valuation multiples and how they've come down and asked themselves, well, now that things are a lot cheaper, does this make sense relative to my outlook for the next couple of years?

Maybe we're just looking ahead and anticipating rate cuts. Maybe that's why bond yields have finally started going lower in anticipation of that. While the stock market is just going to see what the data is, see what the earnings are, and then listen to Powell and company. are and then listen to Powell and company. Yeah, well, there's certainly a debate between Powell and company and some of the dissidents or dissenters that seem to be coming to the fore. Governor Christopher Waller has indicated that he's ready to lower interest rates

sooner rather than later, whereas Powell and company have expressed the view that there are no rush to lower interest rates at all. And I think they still have an inflation issue. I mean, we just had the Dallas Fed data come out today. We now had five of the regional business surveys and they show a very big decline, weakness in the activities index. But on the other hand, the price index is really picking up.

So it's a stagflationary environment. And I think the Fed has to be very concerned about fueling inflation. So I don't think they're gonna be in a rush to lower rates. And that may again, add to the choppiness. The market's had a history over the past few years, Scott, as you know, of anticipating rate cuts that don't happen.

And it sounds to me like you don't think they should cut rates. I don't think they should cut rates because I think they've got an inflation problem and that inflation problem is going to become increasingly visible in coming months. I mean, the PCED inflation number that will come out on Wednesday looks like it's going to be great. It's going to be like zero. But I think we all have to anticipate that given some of the other pricing indicators,

particularly for the regional business surveys and the national PMI is purchasing managers indexes. All those prices paid prices received indexes are showing upward momentum. I know, but how can you be reasonably constructive on the market, even beyond the next few weeks and use stagflation in the very same conversation. Well I think that stagflation is going to be a fairly short-term phenomenon. I think it you know the inflationary pressures from tariffs is to a large extent going to be a one-time phenomenon. It's you know the price the prices go up and then they kind of stay up.

So I don't think that's going to be a persistent inflation problem. And meanwhile, while the stagflation scenario is getting support from the regional business surveys, the consumer, which really accounts for a great deal of the economic activity, looks to be still spending quite well. The Red Book retail sales number on a weekly basis is up over 7 percent on a year-over-year basis, for example. You think the bond market problems are largely over. I use problems in quotes, of course. But it certainly did get the stock market's attention and people like you, I know, who watch both closely. Yeah, absolutely. Yeah, I didn't really freak out the way the markets seem to freak out. I mean we could go from four to

four and a half percent in a very short period of time and a lot of that had to do with this. The spreads that people people were playing in the hedge fund community. But we got all the way up to four and a half percent which is kind

of where we think rates should be in our mind. The bond deal is normal at 4.5%, and the economy has demonstrated that it's got no problems at all growing in a 4.5% bond environment. Well, of course, the tariffs notwithstanding, it remains to be seen. We'll talk to you again soon. It remains to be seen. Absolutely. Thanks, Ed.

You're our guinea. All right. Coming up, semis slipping in today's session. That sector giving back some of the gains from the past few days. We'll drill down on that next. All right. Chipstock's on track to snap a four-day win streak with that space being dragged down today by Nvidia and some others.

Christina Partzanevalos has more on those moves. They're big, too. They're big, but I'll be optimistic they're pulling off their lows, but like you said, still broadly in the red. Looking at the SMH ETF, I often use that because it's a great barometer for the overall sector. It's an ETF, and it's finally, like you said, turning negative after four straight days of gains. Intel, the lone bright spot, up about 2.5% as investors really are positioning ahead of tomorrow's Foundry Day.

The CEO will be presenting at noon Eastern. The street isn't setting expectations high, but any meaningful updates on their advanced manufacturing technology 18A or new customer wins for their Foundry business could really give shares a nice boost. On the downside, what you alluded to Scott, Nvidia, Broadcom, Marvell are all feeling the pressure from two China developments. Huawei is apparently getting ready

to test its most powerful AI chip to date. The company claims it could rival Nvidia's H100, or I should say Wall Street Journal claims that, though it's still largely unproven. Perhaps more interesting for the industry is Chinese media really indicating over the last 48 hours that AI from DeepSeek's NEXT model might be built entirely

on Huawei's silicon, potentially demonstrating that advanced AI models can be developed on less powerful chips, something we saw with the first version, which is a notable technical shift rather than a direct revenue threat to NVIDIA, whose China exposure has been diminishing. Nonetheless, it is hurting the NVIDIA bull narrative. Scott? All right, Christina, thankishing. Nonetheless, it is hurting the Nvidia bull narrative. Scott. Alright, Christina. Thank you, Christina. Parts of Novel is coming up next. We tracked the biggest movers into this close. Pippa Stevens is standing by with that for us today. Hi, Pippa. Hey, Scott. One consumer stock is peddling higher after a bullish call. We've got the name to watch coming up next. We're 15 from the bell. Let's get back now to Pippa

Stevens for a look at the stocks that she's watching. Tell us. Peloton is in the green after Truist upgraded the stock to a buy saying the path to growth and sustained profitability is getting clearer with improving fundamentals supporting a gradual recovery for the equity. The firm's $11 price target which implies 70% upside remains unchanged and Plug Power is surging more than 20% after signing a secured credit facility for $525 million while also reporting preliminary Q1 results. The company said it has no plans

for additional equity raises this year after cost-cutting efforts and recent financing. The shares though still down 50% this year. Scott? All right, Pippa, thank you, Pippa Steven. Still ahead, NXP earnings coming in overtime. Shares are up more than 10 percent in just the past week. We're going to break down the numbers you need to watch for when the bell comes right back.

We are now in the closing bell market zone. CNBC's senior markets commentator Mike Santoli here to break down these crucial moments of the trading day. Plus two earnings reports we are watching in OT. Christina Partzanevalos on NXP and Pippa Stevens on Newcore. Mike, I begin with you. Nice little move here into the close. We are green across the board for the moment. Yes.

Sort of a little bit of upward drift, which I think is probably welcome. The big takeaway to me today is that volatility has drained away to some degree for now. You have a lot of dispersion within the market. So half of stock's up, half stock's down. It's not one of these all in, all out type of days. In general, we're in this zone where even if people are bearish and they think this is nothing but a bear market bounce, they're tactically allowing

for the market to kind of give it a little more lift, right? You get up toward the April 2nd levels or 5,700 or whatever. So there's not a lot of, I think, motivated people to say, oh, it's time to sell this thing here. So, you know, I feel like you're in this sort of in-between period of, you know, it's no longer oversold, everybody hates the market,

it's looking like disaster's priced in, but it's also not like the market's earned back the fact that it's an like disaster is priced in, but it's also not like the markets earn back the fact that it's an uptrend. So that's why we drift back and forth. I still feel like we're, you know, we're obviously a little on edge. We're hopeful of some progression on trade deals, but we're also wary, frankly, of the fact, I mean, people are talking about this, that the Commerce Secretary, Lutnick, is on CNBC tomorrow afternoon at two o'clock.

These are the things you actually have to kind of handicap and have some kind of a game theory sense of what it means. So I do think you're right. We still have this hope that we're going to have incremental movement on relaxation of what's out there for trade, but it has to at some point get beyond hope. And that's, I don't know if that's today

or if that's in another 3% higher when it's really going to start to matter that you have some kind of line of sight to an end to this or some are speculating some firm policy. Whether you know, maybe we get an announcement on a deal with somebody tomorrow morning. We'll see. Obviously, Christina on NXP speaking of we'll see tonight after the bell. Yeah, and we may have a line of sight.

We'll likely see the early stages of recovery in both auto and industrial Speaking of we'll see tonight after the bell. Yeah, and we may have a line of sight. We'll likely see the early stages of recovery in both auto and industrial markets. And that's pretty good for NXPI. Since the auto segment makes up nearly 60% of their business, their software defined vehicle products, radar systems, and battery management systems actually represent 40% of their auto sales.

And all of those do have impressive growth trajectories. You also have inventory levels that have returned to normal and gross margins that are likely to bottom this quarter according to analysts. Analog competitor Texas Instruments recently shed some light on customer behavior with their earnings report not too long ago. They mentioned seeing more orders come in and although customers weren't really telling them why they were buying more they assume the inventory is building because of market anxiety. We might see some similar dynamics with NXP potentially boosting near term results so that demand pull through,

though tariff worries could make the second half of the year less predictable, Scott. Yeah, real demand versus pull forward demand. I mean, there are really two different things. We'll see. And I'm glad you raised that point, Christina. Thank you. That's Christina Parsonelos. Newcore is the other one, Pippa Stevens, and we need to talk trade and tariffs and the impact on material stocks like this one. That's right, Scott.

A lot to watch here. Newcore is modestly higher ahead of its print, which does come after the company issued Q1 EPS guidance back in March that did disappoint the street, saying results would be impacted by lower average selling prices. Analysts will be looking for an update on order activity, as well as the overall steel

demand outlook for the year amid increased uncertainty related to tariffs and trade policies. So UBS is saying the sell-off creates opportunity, upgrading the stock to a buy rating in March. The firm forecasts prices falling in the second half of the year after near-term panic buying subsides but remains confident in the medium-term price outlook for steel. Scott? All right, good, but thank you. Two minute warning. We just heard the sound effect there.

The animation has rolled and Mike Santoli is ready for his last word. I tell you, we've had some buy in the Nasdaq here. Yes. Tesla was red. it's now green. Apple is green, Meta's green. Nvidia's certainly well better than it was earlier today too. It's picking up, you know, what was going on last week too is that those stocks,

obviously they went down more than the rest of the market, so there has been a big rebound effect, but it underscores the retail bid has not gone away. No, it's a story that was talked about earlier today too. Yes, and so this is a lot of ways to quantify it, and I really puzzle over it. Over the weekend I was writing about how, will this be the first severe correction

where retail didn't blink and they were rewarded immediately for it? Maybe, because institutions really did de-risk and now they are actually starting to get back in and getting their exposures up and volatility coming down kind of creates a self-sustaining thing because their models say we can own more of this but they're buying if they're in the individual stocks it is still the Tesla's the Nvidia's and then, and then even some of the more speculative stuff that started to move, some SPACs were moving on Friday, and there was a massive round of call buying.

So I don't know if that mitigates how much kind of a reservoir of skepticism we have to build from here to get higher, but it's worth noting that that's animating this market again. Well, it leads us to the jobs report, obviously, on Friday. Some have talked today about retail's resilience being tied so heavily to the fact that the labor market's been still resilient. It hasn't cracked, absolutely. So we'll see. There's a window when the economy can get through if you do get rollback of tariffs.

We don't know how wide that window is. We fought it out pretty well. Thank you, Mike. We fought it out pretty well today. It looks like we'll finish mostly green. NASDAQ's going to go right to the finish into overtime with Morgan & John.