Closing Bell - Closing Bell 5/28/25

Episode Date: May 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 Wabner live from Post9 here at the New York Stock Exchange. This make or break out begins with what do you think? The countdown to Nvidia earnings. The big event you've been waiting for are experts standing by to tell you what matters most and what could keep that stock moving higher. The countdown clock right in front of you. In the meantime, the scorecard was 60 to go and regulation today looks like this. We're largely taking a breather ahead of those highly anticipated numbers. Slightly red across the board. Most sectors are red. Utilities are selling off the most today.

Elsewhere, big story. Abercrombie's a huge winner following its earnings and guidance in what is a very, very big week for retail numbers. It takes us to our talk of the tape, all that is riding on in that Nvidia report. We've got CNBC's Christina Partzanevalos, star analyst Bernstein Stacey Raskon, and Nvidia shareholder Bryn Talkington all standing by. Christina, you set the stage for us first. The stage is going to be a little bit trickier, the setup this quarter, and that's due to

the recent H20 chip ban affecting China sales. The company had already said they're taking a $.5 billion dollar charge, but CEO Jensen Wong warned last week that export restrictions could actually cost around 15 billion dollars in lost sales on top of that write down. Even if it's a temporary blip affecting the July quarter, it is temporary, consensus doesn't really reflect the potential sales drop. Full year consensus, we're going to show you a chart right now, has really only declined about $5 billion in recent weeks with no big moves after May 20th, which implies analysts haven't really factored in the potential loss in sales.

The company also faced supply constraints around its server racks earlier in the quarter with manufacturers struggling through the technical transition from Hopper to Blackwell architecture. However, recent reports specifically coming from Asia, even FT reporting on it yesterday, suggesting suppliers are getting back on track, which would really help the July quarter. Unlike Nvidia's typical patterns of beating by $2 billion and raising guidance by another $2 billion, many this time around aren't expecting the usual fireworks, Scott. Christina, thank you. Now let's bring in Bernstein

Stacey Raskan and CNBC contributor requisite capitals. Brent talking is great to have you both with us. Stacey, you think this quarter is going to be in your word messy, don't you? It probably will be a little messy,

so you know she's she's right. The estimates do not broadly reflect the impact of the China ban. Look, the South Side is unfortunately I'm guilty as well. We're kind of lazy sometimes and and numbers have not broadly been reset. So the headline numbers, they may guide light. It's possible.

In the quarter, the gross margins are going to miss, because the consensus numbers don't reflect the charge. I think this is known. The buy side's kind of there. I don't think that a guide below consensus on the back of the China stuff would be that problematic. A lot of this is going to depend on what they say about the rest of the year. I mean, they're trying to work around these China bans.

So the question is how much of that revenue might actually start to come back as we go over the next several quarters? You mentioned that the supply constraints on the racks for Blackwell seem to be freeing up, and so can that drive upside into the backup? I would say in general, though, like all the trends of it's kind of a blip. It's not really that structural in the medium term. I would say that the outlook for capex now is actually quite a bit better than it was, say, three months ago.

Again, the supply situation in the backup looks better than it did. I'd say worries about peak capex this year, you know, and capex supplies next year don't really seem to be like all that big anymore. Like capex outlook looks really strong. And I can't imagine that anybody, regardless of what's going on with the China stuff, that you're gonna come off this call feeling, you know,

like less bullish about AI than you were like going into it, given what Jensen is likely to say. So a little bit of a messy quarter, but I think the outlook's still okay. That's all fair. I mean, and Bryn, we put together a list of what we think are the biggest issues for investors like you.

Stacey obviously hit on them, as did Christina with the maybe revenue miss because of the H-20 issue in China. But the other issues to pay attention to, as Stacey was alluding to, demand outside of China. Is there still a deep seek overhang? Maybe we'll learn a little about that. New Middle East partnerships.

Jensen Wong was just with the president in the Middle East. How significant does he see that being? And then no fault of the stock or the company, there's a high bar. There's now a high bar going into this print. What was kind of a ho hum has become, oh boy, I mean, the stock's up 40% since April the 4th. What does all of that mean for what happens tonight? So if you look at June of last year,

the stock is flat from there. And so going into the print tonight, to your point, moving off from 100 to a little bit lower than 100 to 136, I think expectations have been priced in. The China, I feel, is very priced in. We've all been talking about this. This is not a surprise. They've talked about it as well. I think of how to trade this because the stock has been range bound between 100 to about 143 as a peak since June of last year. I do not think the market is going to allow this stock to punch through

that 143, 145 to reach an all time high with these overhangs that both Stacey and Christina pointed out. So as you're looking to trade the stock, I mean the option market says plus or minus six after today. If it goes plus six, that coincides actually too close to that 145, which is that high level. And so I think you could sell calls against part of the position. I do think though, from a demand perspective, Saudi is going to do 18,000 GPUs over the next five years. The UAE, those are real dollars. You hear chat GBT or open AI spending more, the hyperscalers are spending more. And so I think that the conference call will be the opposite of messy. I think that Jensen is going to delight investors. He's going to talk about

all the successes in the Middle East plus plus plus. And so I think, you know, just like 2018 was a great year to add to Nvidia. I think 2025 also is going to be a good year because I do not think at this point it'll punch above that all time high and then start off just because of the overhang we have. There's the Kramer interview too at six o'clock tonight, which is going to be very interesting to listen to in the wake of the earnings. So Stacey, what about the issues at hand beyond China? The high bar going in, stocks up a ton

in a very short period of time and still wondering about a deep seek overhang if any, but address the stocks move first and what you think that ultimately means for where it might go after the number comes out. Yeah, I think you're right. I mean, if the stock was still 110 going into the print, it's easier.

It's had a big run over the last month or so as some of this stuff has been digested. It does make the very short-term tactical setup maybe a little bit trickier, and I understand that. Again, I think the medium and long-term outlook here still looks really good, but yeah, there'll be some nerves going in and through the print tonight. I think that's true.

Now, around the DeepSeek moments, it's funny that the right move, like when the DeepSeek news came out, I guess in January, was actually to sell everything, I suppose, even though the only thing we have seen since DeepSeek was announced was compute demand go through the root. So I still hold to the view that the DeepSeq and more efficient models and more, it's good for adoption, it's good for the AI ecosystem, I think it's good for NVIDIA. So from a fundamental standpoint, I don't worry too much about DeepSeq moments, I think we need those moments, we need efficiency in AI, in compute, in order to drive adoption.

We are waiting, I think they're supposedly waiting for like the announcements of their new models. I think they've been delayed a little bit, frankly, but yeah, I guess we'll see what happens. But I still feel like it's a positive thing, not a negative thing. How are you thinking about how Jensen Wong has sort of navigated Trump and the administration?

He shows his face out in the Middle East. He gets some business out of it, obviously, but it wasn't lost on anybody that he was there, the president included, because he said as much as he singled out the fact that Tim Cook wasn't. But how about that relationship and what you think that means for this company going forward? Yeah, so for now that relationship looks good. And you know, it's Trump, so we'll see. But for now the relationship looks good. I think Jensen's actually navigating it very, very well.

He got the diffusion rules pulled, which is actually a big deal because if those had actually gone into play on May 15th, those have the potential to impact things pretty strongly like right now. So those are gone. He's got the Saudi deal and we'll probably see more of those bilateral agreements that opens up some of that suffering demand for him. And I'd say those Saudi and UAE deals are probably bigger than what would have been allowed under the old diffusion rules anyway.

So yeah, I think he's navigated everything really well. Brian, how would you address that? By the way, I mean, the stock going in is now up 1%. The NASDAQ is now green in what's been a red day across the board. Tech and comm services have been hanging in and they are the only two green sectors. So maybe there is some at least tempered optimism going in after the significant move that we've had. But what about Jensen and the president? Hey, I've never seen Jensen in a suit this much in the last 30 days. I think he's navigating it really well.

I don't think the White House wants to see the leather jacket. I think he's just navigating it, you know, just incredibly. I don't know why Tim Cook would have even been there, first of all. It makes so much sense why Jensen's there. He got many good deals out of that. And he needs to cater to the White House because to me, from a national securities perspective, Nvidia's in the crosshairs of all of this between the US and China. And so I think that's one of the reasons the market is not going gonna let Nvidia at this quarter take off again and start making new highs because we know that very little has been done between China and US in the trade negotiations. We've just done a kick the can and took it, taken off the embargo.

And so I still think the stock is gonna be range bound. And once again, this is be a good year to pick up the name because I agree with everything Stacey said. I think there are greens, blue skies ahead for Nvidia longer term. Brynn agrees with everything you said, Stacey, so we're going to let you go. There's nothing controversial that we could get into right now. So we'll see you soon. We'll see what happens.

And I know we'll talk to you soon. Stacey Raskan, Brynn is going to stay with us. And we're going to bring in iCapital's Anastasia Amoroso into the conversation. I know you don't think of this as a single stock story, but in the context of what the group may do at a time where the NASDAQ's up almost 11% in a month, pretty extraordinary. So what does it mean?

Right, well first of all, Nvidia report is important, specifically for Nvidia shareholders, but I wouldn't necessarily extrapolate what we hear tonight into the broader market one way or another, or even into the broader semiconductor or AI story. I think we're likely to hear that the AI momentum is continuing and it is broadening, which

is a positive. I would be really curious to see how the company is navigating some of the tariffs and sanctions and export controls. So from that perspective, you can actually take some color from that. But I think what's really important here is that if you think about performance of the market, you have sectors like utilities, you have sectors like industrials, for example, that actually managed to be up five or 6% also software, AI software is up about 12%. So this is not the year where the only growth story that you have in the market

is Nvidia. So that's why I say I wouldn't necessarily extrapolate whatever we hear tonight into the broader market. Yeah, Brynn, how do you see that in terms of what this report means for the broader market and all these other spaces? I think it's gonna confirm what we already know because what people should have been concerned about is last month when Microsoft, Google, Meta, Tesla

all talked about how much they're gonna spend and if they would have been pulled back, I can guarantee you Nvidia would not be at 137. So we already know the spend is there. I think that there's so many, I mean, look at CoreWeave, like that stock has just gone parabolic, which obviously Jensen and Nvidia have a lot to do with it. And so I think it's going to confirm that AI demand is strong. And I agree with Anastasia that we do have this broadening out where there's other things outside of the high beta names

or just the tech names that have recovered off the bottom and I think we'll continue to run. That being said, I do think the market really through July is capped out around 6,000. Like Nvidia, I don't think the market's going to let it punch through above 6,000. So I think we're going to be this $5750 at the 200 day, up to around $6,000, until we get some more clarity around inflation, yields, and most important, what's going on or what isn't going on with trade negotiations.

Well, you didn't mention taxes, deregulation, and all the stuff that, you know, theoretically, the market's gonna start looking ahead too, right? It's not gonna wait until the moment that, you know, theoretically, the market's going to start looking ahead to, right? It's not going to wait until the moment that we get there. And if the market is somewhat desensitized to the bark of the White House because it doesn't believe that it's going to actually get the bite, I mean, how many times do we have to go through this of I'm going to do this, tariffs to, you know, whatever percent, but then they come back in a matter of days. Haven't we learned our lesson on that yet? Yeah, absolutely. I mean, I think myself included were becoming anesthetized when just literally 24 hours

they will change course. I think what he's trying to do with Europe specifically is those apparently those trade talks weren't going anywhere. So he lobs a tweet and then the head of the EC reaches out to him and said, OK, we'll speed it up. And so I think we're all getting the game here. And so I do think, though, what are we going to get and how long is it going to take Congress, the Senate now to come back? And so that's where I think around deficits, around yields, around what the Fed does or doesn't do.

We'll continue, though, to put a cap in addition to the lack of clarity, because really, who cares about the trade negotiation between us and the Philippines? It really comes down to the EU, but China most importantly. And I think we're just so far off on a China deal, but that will put a lid until we get more clarity there. You're not focused on the trade negotiations and the tariffs with the penguins? Let it go. I couldn't resist. Is there a cap on the market?

Look, we've run a long ways in a short period of time, so it's natural for things to slow down. But I actually, Scott, still see a lot of momentum potentially continuing further into the second half of the year. And I see a lot of factors that are still supporting this market. You know, for one, this economy has been remarkably resilient in the face of everything that has been thrown at it. And there's this chart, Scott, that looks at the hard data, which is the data that

is being used to measure the market. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it.

And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. And I think that's a good way to look at it. that are still supporting this market. You know, for one, this economy has been remarkably resilient in the face of everything that has been thrown at it. Yeah. And there's this chart, Scott, that looks at the hard data, which is actually what people are doing in spending and the jobs that they have, versus soft data, which is sentiment.

And it looked like for a while that soft data was just plummeting, and maybe the question mark was the hard data was going to catch down with that. But that is the exact opposite of what happened. What actually happened is consumer sentiment has turned around. Even the manufacturing surveys have turned around. And now soft data has rebounded. And in the meantime, we're living through the second quarter with 2.3% GDP that is now cast. So that is a positive.

And then in the meantime, the trade deal is working its way through the Senate and Congress. And I think that is a growth positive. If you think about the, excuse me, I should have said the tax deal is working its way through Congress, and the tax deal is a positive as it has the potential to boost GDP growth by 1% in the long run, starting next year. So you add all that together, and you also look at things like oil prices, which are down 15%, and wage growth, which has has slowed down that's an offset to potentially higher inflation from tariffs so I'm not in the stack inflationary camp and I do think

this market has supports which by the way you know two weeks ago about 20% of investors were bullish today it's about 37% but it's not half of the investors that were bullish to start the year so I think this market is not tapped out yet. You know what's interesting, Anastasia, when no one's talking about, at least outside of the White House, rate cuts. All right. We stopped talking about the Fed because, I don't know, the consumer seems pretty good. The economy seems to be in a relatively decent place.

And if you're going to dial back the tariffs at every turn and think that we're going to move on to other things, maybe it becomes less relevant to have a need. And if they do show up, it's for the wrong reasons. It is less relevant and we need the Fed if we need the Fed because the labor market has fallen apart. But clearly that is not what's happening. It is rebalancing, it's softening a little bit, but it's not falling apart. The beauty of the situation is that if we need the Fed, they have the ability to step in and cut interest rates further. You know, they

also have that ability because inflation, core PC inflation this week is expected at two and a half percent. Headline is about 2.2 percent. So they have the firepower to use it if they need it, but we don't currently have that need because consumer continues to contribute to the economy. And I actually think manufacturing may start to pick up because if some of these negotiations are successful and if companies are listening to the Trump administration, they're likely starting to boost their domestic capacity utilization. That's a positive for the economy.

You look at some of these retail reports, Brandon, doesn't seem like the consumer's in a dark place. I mean, we had, as Anastasia said, soft data report after soft data report, suggesting that the consumer was going into hibernation, like if they weren't already there. And then you see some reports like an Abercrombie. And then you get the consumer confidence report, which finally reversed five consecutive months of declines and you say well maybe not so fast.

Yeah well I mean I can I agree with you. First of all I talked about it with you Steve and I about the consumer confidence index last month was a huge contrarian indicator and people should do the opposite of what it's saying because it always is lagging indicator. But I will say I think Abercrombie is more about Abercrombie I think because you could also look at Macy's is closing 150 stores. And so I still think within retail it's very specific within names. And I do think about it hasn't made a difference but you know there's 40 million Americans that just are about to get a credit

impact from the student loan debt. I mean if you multiply that by the 500 bucks a month that they haven't been having to pay, let's just see if that pushes through. But right now, the consumer is happy to spend on credit, consumer strong, and as long as two thirds of the GDP continues to do that, and everyone has a job, the economy will be in good shape. I mean, I'm not in the recession camp even remotely. I just think the market needs to digest itself. We need more clarity before we punch above and get into all time high territory. Labor report coming up too, lastly to you, Anastasia, but you've got to be careful into reading anything into anything that comes out now.

Because what was thought to be in place before the China tariffs were rolled back is not the case today. So it's really hard to make an investment decision based on one report in this particular time. That's very true. And also you have to think about not the backwards looking data, but what is likely to happen in June and likely to happen in July. And really the key determinant will be do the trade deals get cut by the July 2nd or

so deadline. I think the determination is there. I also, we've seen it with the UK, as we now see it with China. And I think we might also see it with the EU. So as long as the trade deals are progressing along with the tax deals, I think that's what's most important to the market.

Yeah, and we'll see. Whether the administration too, it's just it's run its course in terms of having the stomach to deal with a massive amount of volatility, not only in the equity market, but in the other markets that have made them nervous quite obviously at times. It's been fun. Thank you, Bryn.

We'll see you soon. And we'll see what happens with Nvidia and Anastasia. Thanks for being here as well, Anastasia Amoroso. Let's send it now to Christina Parts-Nebelos. She's back for a look at the biggest names moving into the close. What do you see? Box shares. Those are soaring right now, hitting an all-time high after the cloud storage company beat on earnings and revenue for the quarter, also raising its

forecast for revenue for the full year amid this growing demand for its AI driven offerings. And that's where you're seeing shares up 17% its best day since 2020. There's a leadership shakeup providing a boost to shares of Vale Resorts, the company said former CEO Robert Katz would return to the role effective immediately, replacing Kirsten Lynch. It comes just really after a tough year for the resort operator where it sold fewer season lift tickets. Some say because of prices, shares up 9%.

All right, Christina, thank you. We're just getting started here up next. Crypto front and center as the Trump administration makes a big endorsement of Bitcoin and other digital currencies today. Details just after the break. We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back crypto taking center stage in Las Vegas where Vice President Vance was the headline speaker today. At the same time, the Trump administration making it easier to include digital currencies in your retirement accounts. the Trump administration making it easier to include digital currencies in your retirement accounts. All of this coming with Bitcoin staging a major comeback lately. There's a look at your chart. Mackenzie Segalos joins us live from Las Vegas with more. It's good to see you.

Hey there. So we've got Vice President JD Vance just addressing more than 35,000 attendees here at Bitcoin 2025 calling crypto a hedge against bad policy making in Washington. Now he took aim at former regulators saying that the administration is still clearing out anti-crypto holdovers and doubled down on plans to legitimize stable coins as a tool to strengthen dollar dominance.

In this administration, we do not think that stable coins threaten the integrity of the United States dollar quite the opposite. In fact, we view them as a force multiplier of our economic might. Just before Vance's speech, the Labor Department reversed a 2022 rule that had discouraged crypto and 401k plans, saying that fiduciaries, not not bureaucrats should decide what belongs in your retirement account No matter what party is in control It's a hedge against skyrocketing inflation, which has eroded the real savings rate of Americans over the last four years

Now the administration is pushing lawmakers to get crypto bills on the president's desk before the August recess, starting with the Genius Act to regulate stablecoins, something that the vice president said could become a force multiplier for the U.S. economy. Mackenzie, thank you. Mackenzie Segalos. Up next, former Dallas Fed president Robert Kaplan standing by with what he's expecting. The tariffs might mean for the feds next move. We're back on the bell after this.

With President Trump rolling back tariffs again and economic growth still looking reasonably healthy. The feds wrote ahead suddenly doesn't look as bumpy. Joining me to discuss is Goldman Sachs Vice Chairman and former Dallas Fed President Robert Kaplan. It's always good to see you. Welcome back. Good to see you, Scott.

Is that a fair assessment of what I wrote? That the Fed, you know, what looked like potholes everywhere suddenly is like, all right, we filled them in for a little bit. Well, if the Fed had been worried about likely recession or unemployment spiking up, I think that looks somewhat less likely. One of the reasons for that is the labor force is tighter than people may have thought. Change in immigration policy is part of that story. In addition, the tax bill and the whole fiscal outlook, we thought three months ago, two months ago was likely to be contractionary. And it may turn out to be more stimulative.

It means you're going to have maybe higher deficits, not lower deficits. And we are starting to get some clarity on the tariffs, where from at least from the high April levels, there's a hope that they may settle out on average in the low to mid teens. So all of that is altering the picture. It still means the Fed will likely, I think, skip June, and I think most likely skip July, but the strategy of waiting for the situation to clarify, I think, has been the right approach,

and it's still the right approach. I mean, is there a chance the Fed does absolutely nothing this year because of everything you just said? There's a chance of it. And you know, they've got a chance to indicate their views for their year in the June summary of economic projections. Each Fed participant will have to submit their forecast. If I were in my old seat, I would probably submit one or two.

But yeah, they're gonna take it one meeting at a time, and I don't think they're gonna prejudge it. So all those options are on the table, but I also think they're open to cutting one or two times, but they're not ready to judge right now. Gosh, this makes Jackson Hole all the more important, even though it always is, obviously, but is that how I should be thinking about this? Well, they may discuss the new framework more at Jackson Hole than the...they'll talk about

the monetary outlook. I think by the time they get to Jackson Hole, it will be later August. You'll probably have more clarity on the tariffs. You may well have already passed the tax legislation. So they'll have a little more clarity. And I think Jay Powell will adjust his comments accordingly. And then they'll talk about the new framework and adjustments they're making

to the new framework they're working on. If we're content with the patience that the Fed obviously feels it has, if they do something in September, is it because they can or because they have to? No, I think there was a scenario with unemployment had started to spike up, that that might have forced them to be more forward leaning.

I just think that scenario is less likely, again, because of a tight workforce and maybe more expansive fiscal policy than they had expected. And so I think the reason if they do move in September, I think it's more likely because we will have processed the early stages of tariffs and they will be less inflationary than than the Fed had feared. But even September may be too soon to make

that judgment. But I don't think they're gonna get forced. I think they're gonna have to make sure they're confident that they understand the impact on prices of these tariffs. And I don't think they have a grip on that yet. How nervous were you getting, and thus how nervous do you think Chair Powell was, if that even is the right word, and maybe it's too strong

or dramatic, about the backup in yields, especially at the longer end, and what that could signify? Well, I think that is concerning. And I'm sure it concerns more than Jay Powell. It concerns the Treasury, because we now have in the neighborhood of $37 trillion of debt on its way to $38 trillion by the end of the year and heading north. When we started the administration and when you and I first spoke, we had Doge, and I think the thought was we'd at least extend the Trump tax cuts, but may

not be able to do much more than that. And there was going to be a real effort to chip away at the deficit, which is running in the neighborhood of 7% of GDP. I think that appears somewhat less likely now. And I think the bond market is recognizing that. and that's why you see the 10-year yields are sticky. And also, there's also been some weakness in the dollar, some strength in gold, which also is not terribly helpful for duration buyers.

So we could get a scenario here where economic growth is okay, maybe not great, but not a recession. Unemployment stays low. Corporate earnings, not perfect, but stay resilient. But the one lingering issue is deficits are still running at 7% plus of GDP, and the 10-year rate is sticky, and that'll be the issue to be concerned about. I mean, the Fed has, if nothing else,

had to be nimble in its thinking. I guess I raised that in that there were many issues on the table. Let's just say, at face value, you come into the trade war, you're like, well, tariffs are gonna be be terrible it's a tax it's regressive could lead to inflation they get rolled back Doge is going to hurt growth you're going to do all these cuts

looks like a nothing burger frankly when you take in total what the number was relative to what the expectation was and then you're like well on the tax cuts it's actually gonna blow up the deficit even more. But now the Senate has it. And you've heard some senators, even on the right, come out and suggest there's no way that this thing and this size is going to come together in its current form.

So the Fed in many ways has had to roll back its thinking on three major pillars of what it was watching closely. Yeah. Well, I think to me it reinforces that the right thing to do was to not prejudge, not jump to take action, to be patient, to let these structural changes unfold. That's still where we are. And I think the twists and turns, if I were at the Fed, would

just reinforce to me, it's been wise to be patient. It'll be wise to continue to be patient and maybe, maybe by September we'll get more clarity. But don't prejudge that either. And I think this patient strategy has served them well, and I think they'll continue with it, and I think they should. Mr. Kaplan, we'll see you soon. I always appreciate our conversations and your time, and I look forward to the next one.

Robert Kaplan over at Goldman, the former Dallas Fed president, as you know. We have breaking news from Meghan Kassella in Washington, and it is impacting chip names and the market as a whole. What are we learning here, Megan? Absolutely, Scott. That's right. This is the Financial Times reporting.

According to several people familiar with the matter that the Trump administration has told software companies that software used to design semiconductors to stop selling that software to Chinese groups. They say several people familiar with the move say this is coming out of the Commerce Department, the Bureau of Industry and Security That they sent letters to what are known as electronic design automation groups that includes cadence Synopsis and Siemens EDA you can see some of these stocks are down big on this news saying that they sent these letters to stop supplying Their technology to China now

It's not clear if every EDA group the says, got this sort of letter from the Commerce Department, but of course, this is the latest step trying to slow China's rollout or development of advanced AI chips. And I was just talking with officials inside the building here about this one, Scott, and the Commerce Department says on background here, they're not confirming or denying this report really. They're saying the Commerce Department is reviewing exports of strategic significance to China, that in some cases, Commerce has suspended existing export licenses or imposed additional license requirements while the review is pending.

So no specifics on this report exactly, but we can report clearly that there is some work being done on this front and you can see the impact on the stocks. Scott? We'll take it at face value then if they're neither confirming nor denying. We'll go with what the impact is. And you set it up well. Megan, thank you very much. It's Megan Kacela. We'll watch the stocks. By the way, I mean, Nasdaq was green just a short time ago. Nasdaq's now negative. The overall market has taken a certain turn, at least marginally for the worse.

Christina Partsanovalos, we brought her back because she knows this space so well. Does this surprise you in any way? It probably shouldn't surprise anybody or any company that has any, you know, technological advantage in these areas as it relates to selling things in China. Precisely. And it reminds our audience of what to expect too from Nvidia's earnings after the bell. Why? Because there's still that overhang

of export restrictions that are looming. We have, so I reached out to Cadence and Synopsys to get a comment. Synopsys, keep in mind their earnings are out after the bell today at 4 or 5 p.m. Eastern, so they're not gonna be commenting. I haven't heard back from Cadence, but those are the, it's a duopoly.

Essentially when we're talking about designing the software to build these chips, it is an important part of the process. So logically it does make sense if the United States wants to block those services to China because with those services, that's how they're able to build more advanced chips. I just wonder now too, if China is going to retaliate. Just recall last week, China got angry at the United States for making comments about any American companies that buy Huawei chips, that they would be in trouble. And so China actually said that they're abusing export controls to suppress and contain China.

So I would assume once this comes to light and everybody agrees or admits to it, I'd assume China would be very vocal. And this doesn't really calm the waters between both countries either, and still points to an overhang for a lot of the chip names in the sector and why we see so many of them range-bound just over the last year.

We also need to see whether there's nuance to what is a headline by the FT into the actual order if one is there and what it might mean. This you know what often happens and I've seen in countless examples whether it's the market as a whole Christina or some of these stocks at times is the knee-jerk initial sell-off that when you get a little more clarity around things doesn't look quite as bad. I don't know whether that's gonna be the case obviously but we kind of need to wait and see. Yeah, so the clarity would be in terms of the total revenue going to China.

So that I have not had a chance to even check yet to see. Maybe it's a smaller portion and much like we saw, and I'm going to give Nvidia, AMD, Qualcomm some light because they're able to shift a lot of their China sales to other countries, specifically the Middle East. So perhaps that's going to be the case for cadence and synopsis with everybody buying all of these chips and building out their AI infrastructure over there. One door closes, the other one opens.

Perhaps the portion of sales is quite small. So perhaps the 9% drop in the stock price for some of these names is a little bit overdone. But there's the retail tradings and the quants, right, going after the headlines. Yeah. I appreciate you helping us keep that ball in the air. Christina, thank you very much on some breaking news that's affecting really the market at large. Even if it's just by a marginal amount, you still have the Nasdaq, which was positive,

which is now negative by 0.2%, and the Dow which is down about 200 points. We're back after this we'll get to set up for Salesforce earnings. Oh yeah they're coming out too. A popular stock. We'll talk about that coming up. We're less than 15 minutes from the closing bell. Let's get back to Christina Parts-of-Novellus now for the stocks that she's watching. Tell us what you see now. You've been busy this hour. Yeah very busy and we're switching gears completely because I got to talk about GameStop shares those shares are down about 10% right now after making its first purchase of

cryptocurrency Bitcoin to be specific a 500 million dollar purchase the mean stock is really following in the trend of strategy which holds about 60 billion dollars of a cryptocurrency but it seems like the markets not buying it even though GameStop wants to be a proxy, shares down about 10%. Let's switch over to Joby Aviation. Those shares are soaring after closing a $250 million investment from Toyota. It's part of a deal really to support the certification and commercial production of the company's electronic or electric air taxis, electric air taxis, and that's a big investment.

Vote in the right way, which is why shares are up 28%, Scott. Best day since 2023 too. Thank you very much, Christina Partzanevalos. Abercrombie's a big mover today too. We'll tell you exactly why when we come back on the bell. We are now in the closing bell market zone. CNBC senior markets commentator Mike Santoli here to break down these crucial moments of the trading day. Plus Gabrielle Fonrouge reporting

for us today on Abercrombie's huge move. Steve Kovach looking ahead of course to Salesforce earnings in OT. Mike to you first. We've turned red. Yeah. You know, I think more decidedly so. I don't know if it was a late-day Trump tape bomb The chip designers, but it feels that way Nvidia now read along with those names right there Look at cadence and synopsis and some of those on video lost a quick two bucks on the headline You know, I think on some level Investors traders are now in the mode of expecting the unexpected meaning you're on some level braced for the possibility that you do get challenged by these headlines. And that's probably why, you know,

the S&P was up 2% yesterday, and you couldn't get the VIX below 19. You know, at some level, we're just presuming some level of agitation. In that context, it's fine. You know, three stocks down for everyone up today, but you're just kind of churning in yesterday's range. I still think you have

to expect you're going to stay in the chop zone for a little while, be perfectly routine and textbook even to pull back more than we did last week. And so far it's not really tripping any key wires. Session lows across the board. It just is what it is at this moment. Dow is down about 250. Gabrielle, you're looking at ANF Abercrombie, which is a big mover today. Yeah, it's a huge mover. They've been surging today. They're up at about 14%.

It looks like that's where they're gonna close. This comes after the retailer posted fiscal first quarter earnings that beat expectations on the top and bottom lines. Of course, the guidance was fairly weak across the board, but there are a few things that could be moving the stock higher. So Abercrombie saw revenue of 1.1 billion during the quarter, which is a record for

the company. It also raised its full year guide, which topped expectations. The company is now expecting sales to grow between 3% and 6%. That's up from a prior range of between 3% and 5%, and topping consensus of 3.3%. The company also announced that it repurchased 2.6 million shares for 200 million. And tomorrow we have another slate of retail earnings on deck, which are expected to give us more clues into how the consumer is doing and how companies

are managing President Donald Trump's trade war. We'll hear from Best Buy, Burlington stores, Footlocker, Kohl's, Costco, and Gap. Scott, back to you. All right, Gabrielle, thank you very much for that. Steve Kovach looking ahead to Salesforce. What do we need to know? Yeah, the big one to watch here, Costco, and Gap. Scott, back to you. All right, Gabrielle, thank you very much for that. Steve Kovach, looking ahead to Salesforce. What do we need to know? Yeah, the big one to watch here, Scott,

is the momentum behind Salesforce's AI product. That's called Agent Force. Now, lots of hype around this one from CEO Mark Benioff last year. He said Salesforce was gonna hire 2,000 people just to sell this one product. And last earnings report, back in February, companies said it had 3,000 paid deals that included AgentForce in them since October of last year.

The newest version went on sale back in February, but still in hype mode for AgentForce. Salesforce's CFO said to expect just moderate contribution to sales from AgentForce this fiscal year. That's expected to grow from there. So we'll see if there are any more signs in this report, AgentForce is taking off and don't miss Salesforce CEO, Mark Benioff, he's gonna be on Mad Money tonight with Jim Cramer, Scott.

All right, appreciate that. Steve Kovac, thank you. Mike Santoli, NVIDIA obviously. And Jensen Wong, by the way, is gonna be with Jim. So that's gonna be key too. So you got two big interviews coming up with Cramer on Mad Money, Benioff and Jensen Wong. I mean, how are you've got two big interviews coming up with Kramer on Mad Money, Benioff and Jensen Wong.

How are you thinking about Nvidia coming into this number? It probably doesn't hurt to get it softened up with this little move in the last half hour. Look, I think you have all the inputs that you would need to say it's going to be a fine quarter and it's probably going to be enough for them to raise guidance. I definitely though feel as if because the last three quarters you've had negative responses on the next day to Nvidia shares and it seemed as if nothing was enough for the market. I do wonder if we've just kind of churned long enough and you've kind of revved the engine on Nvidia long enough and

allowed the fundamentals to catch up or not with this multiple compression or if we're just keeping it on a short leash. Because at any moment, there could be something that comes along that says we're closing off a market to you or we have the deep seek is still fresh enough in our minds that we have to be careful about projecting out more than a couple of quarters how big the growth is going to be. But we'll see it's a great test for market psychology for the willingness to believe and it's interesting to me that by all measurements retail traders have been backing away from the stock when it was one of the favorite playthings they've moved on to other things I don't know if that's a good

contrary signal if it's something that says that maybe the fever is broken in this name. All right well moment of truth that far away, we got those numbers in overtime. Bells ringing, it's red, but it's all about NVIDIA. I'll see you tomorrow.