Closing Bell - Closing Bell: 5/30/25

Episode Date: May 30, 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 today. This make or break hour begins with stocks on edge. A couple of culprits. A report that new China sanctions could be coming. Weighing on tech and the Nasdaq. We'll show you that and some very pointed comments today from JP Morgan chief Jamie Dimon on a number of market related topics. You'll hear Dimon's greatest hits coming up in just a bit. We'll show you the scorecard here with 60 to go in regulation. It was during halftime when things started going south for stocks, but a bit of a recovery in the last 20 minutes or so after President Trump said he's sure he'll speak to China's President Xi and hopefully work it out.

Nvidia falling sharply along with other chip names on that earlier headline and sitting lower on the day. You see Nvidia still down by some 3%.. Mega caps in general they are weaker today. Tesla shares well they're clearly in focus. Elon Musk bidding farewell to the White House. We'll discuss what his return might mean for Tesla shares going forward. Elsewhere Gap a big mover and certainly worth noting today that stock down 19% after its earnings report. All of it takes us to our talk of the tape with the best month in years about to be in the books.

What does the summer hold for stocks? To help answer that, we begin at the White House, our Megan Casella and that headline that hit midday. And then the comments just a short time ago that sort of turned things around just a bit, Megan. Just a bit, Scott, that's right. So first, that headline that hit midday was coming from Bloomberg News.

They were reporting that the Trump administration is considering expanding restrictions on China's tech sector by trying to capture some subsidiaries of already sanctioned Chinese companies. So the idea here is if you take a company like Huawei that's already subject to US restrictions If Huawei became the majority owner in some sort of subsidiary all of those subsidiary companies would also be caught up in the same Restrictions now Bloomberg is reporting this I asked the White House about this and officially got a no comment from them

But it simply added to some of the tensions we were hearing about between the US and China this morning including the president accusing China of violating the trade truce that they just struck a few weeks back in Geneva. Nothing looked good by midday, Scott, but just a few minutes ago when we heard the president speaking in the Oval Office, when he spoke about China, it wasn't too aggressively. He said, again, they did violate a big part of the agreement, but he went on to say that he's sure that he'll speak with President Xi and, quote, hopefully will work that out.

So reading between the lines there, no call scheduled between the presidents at this point, but President Trump expressing some optimism that it will happen, even though, as you remember, Scott, we have been waiting for some sort of conversation between those two leaders since the start of this term. It hasn't happened yet that we know of, but now that might be the best next step in order to get these trade talks back on board. All right, good stuff. Megan, thanks so much for starting us off.

That's Megan Casella, North Lawn of the White House. I did mention some of the activity and the chip names today. Nvidia, some of the chip equipment stocks, reacting pretty sharply to this news. Christina Partson-Evalos joining us now. This is your beat, and you saw this pretty dramatically midday, didn't you? Yeah, just after 12 p.m. Eastern, and these restrictions really matter because they significantly expand U.S. jurisdiction

and could impact a lot of the commercial relationships that the chip names, hardware names have with China. And that's exactly to your point why we're seeing this immediate pressure across hardware names. So let's start with the semiconductor equipment names manufacturers. You talked about Applied Materials, LAM Research, KLA. You can see on your screen LAM probably the worst of the bunch, down 4%. These companies do do substantial business with China's SMIC and Shang Shi, I should say, Memory, which is Chinese firms that could benefit or could become primary targets under expanded US restrictions.

And then you also have the chip design software firms like Synopsys and Cadence that were already hit by export controls earlier this week, or I guess the letter of export controls, and they received these letters requiring licenses to ship to Chinese customers. That's why you did see a major dip just in the past few days. These ones were in the green because of just the buying the dip mentality. And it's not just the equipment names. You also have the source components. So Qualcomm, Intel, they do a lot of business in China too. They're filling the heat. You can see Apple in the mix. Some of them rebounding though after President Trump spoke. And then lastly, you mentioned the advanced chip names and memory makers,

NVIDIA, AMD, Micron, also lower the broad message here though, is that the subsidiary crackdown represents a shift in how the US approaches tech sanctions, moving from targeting individual companies to now the entire corporate structure. And so that's why you're seeing such a dramatic increase or decrease in a lot of these hardware names.

Scott. The White House keeping reporters on their toes today. That is for certain. Christina, thank you. Market participants as well. Our next guest tells us today, tariff risks are priced in, if not overstated. Here to discuss Chris Harvey from Wells Fargo Securities.

It's good to have you back, especially as we have these new headlines. What's your reaction given your own headline today? That it's all priced in? I do think it's priced in. You're gonna have volatility. We're having that volatility. But at the end of the day,

we're making progress on trade and tariff. We'll continue to make progress on trade and tariff. We'll take a step back every once in a while. Today we take that step back. But as you can see, things didn't really stick. And the Trump administration does want to move things forward. They appear to wanna make them push the ball forward. And I think that's a positive. We're now at the point where I think we're going to start to hear

some real tangible results over the next couple weeks. You've been steadfast in your belief that this market can have a good second half. You refuse to move down your target, which I always cite and you always smile when I do, because it's 7,007. It's by far the highest on the street. And you think that something close to that is still possible or not? Yeah, I think so. I think we could see double digits

in the second half of the year. I think one of the things that really surprised me in recent weeks was what Waller said. Waller comes out and says, hey, if tariffs are only 10%, we can start cutting rates. Tariffs are more than 10%, we're gonna have a problem. That was a really interesting statement. And I do think that's where tariffs end up in a 10-12% range. That was our initial thought and we're getting more and more

comfortable with that belief. And if you believe what he has to say, that's really constructive. And at the end of the day, when we talk to clients, when we talk to people, they're fearful of a lot of things but when you push them on the fundamentals, they're like, hey, the fundamentals are okay. You describe, like, that suggests the president can have his cake and eat it too. He can have his tariffs at 10% and get the rate cuts that he's been pining for, and maybe he did when the Fed chair himself was sitting in the White House yesterday. I think so, right?

So the reason why we said 10% is with 10%, we think about a third will be eaten by the importer, a third be eaten by the corporation, and a third will be eaten by the consumer. That's not a big impact. And what's really interesting is now you're getting revenue, now you're having revenue that can start to balance the budget. That's a real positive, real constructive thing. And we'll start to see the benefit of that as we go forward in time. What if China doesn't back down? What if they don't want to do a deal as fast as you think maybe the White House needs to? I don't know. So I think it's more important that we get deals on the table with India, with Japan, with the EU, and North America. More important than China?

Yeah, I think it's more important than China. Why? Because we're in the process of disintermediating China. And what we're saying to our allies is, if you want to win, if you want to enjoy the spoils of that disintermediation, then play ball with us. We're not going to stop doing business with China, but we really want to, the administration is trying to make it very difficult to do business with China. And when we listen to the conference calls, you are hearing companies say,

hey, we're removing our exposure to China. We're moving business out of China. It is working. They are making progress in that endeavor. What's the rub down? I mean, what potentially upsets your narrative? What upsets my narrative? Really simple. One of the things that we keep saying is, if you don't know, you know. The uncertainty is still gnawing away and still eating into people if we're here in June July we're still saying we're not sure we haven't had enough progress then you know and then people will start to say hey maybe we need to resize our workforce you start seeing a resize in the workforce then things start to fall apart you actually think that by June July we could have enough clarity on the trade

front that we can focus on tax cuts, D-reg and all the other stuff that's supposed to be stimulative to the economy? Well I think we're already we're already focused on tax cuts. We already have a good understanding of what's in there. There's a lot of talk and I don't think it's gonna be done by July 4th but there's talk about it being done by July 4th. I think you don't have to have you have to have some progress with trade and tariff. If you make that progress and it's of size, again, if you see in Japan, if you see in

India, then you can start to extrapolate out. Then the market starts looking through things. They start looking through any sort of economic slowdown or weakness. And then we start looking to 26, not at 25. Do you think earnings were good enough to justify where the market trades today? Yeah, I think they're good enough. But really the issue is, will we start looking to 26? Well, we will.

It's a matter of when. Right. And we will start looking at it. We will start thinking about it more if we make progress with the trading tariff. Because people say, well, 25, it's a wash. There'll be some uncertainty. There'll be some noise. But what's really interesting, too,

is we went through the S&P 500. A couple weeks ago, we could only find five companies that removed guidance. Now it's closer to seven or eight, but it's a lot lower than you think. The revisions, a lot less than you think. And the underlying fundamentals, a lot stronger than you think.

Am I supposed to just ignore, as an investor, the volatility in the market? Earlier today when the diamond had his comments, which we're gonna show you in a minute, and the report hit from Bloomberg about these other sanctions on China, VIX goes above 20, VIX is green. You're like, well, here we go again,

stocks don't like that. And then you have the president making the comment in the Oval, now VIX is red again. Am I supposed to just write all of that off? No, no, you're not supposed to write all of it off. You're supposed to pay attention to it. We're supposed to take it in. We have to be careful, right?

If we don't get next couple weeks something serious on trading tariff, then we have to pay a lot more attention to it. But if you're looking at credit spreads, if you're looking at rates, things are okay. You know, one of the things we were talking about is, were we in a bear market? And we didn't see a lot of the hallmarks of a bear market. We didn't see credit spreads blow out.

We didn't see numbers really cut. We didn't see confidence went down, but not the way you would expect it to go down. And so what we saw was just a repricing of risk. And that's where we are. We're in this process of repricing risk. With regard to volatility, hey, pay attention to it, but don't be afraid of it.

Be respectful of it, but don't be afraid of it. There still are questions as to what's on the come. Like all of these issues that are out there, what the ramifications of trade are going to be, what the ramifications of the tax bill and the deficit and potential issues in the bond market too. And on that note, let's show you what Jamie Dimon said today during his conversation out in California

with our own Morgan Brennan, the JP Morgan CEO, with some pointed commentary on a number of topics from the Fed to the bond market, to the trade war, and President Trump's sweeping tariffs. We did a little bit of too much everything everywhere all at once, so it's hard to step back from that and finish. I think the best we can hope for and we should hope for and I think I see them doing this which is to finish you

know maybe there's 15 important ones finish them there'll be agreements in principle. I would engage with China you know I would I just got back from China last week they're not scared folks. There's notion they're gonna come bow to America I don't I wouldn't count on that. You are going to see a crack in the bond market, okay? It is going to happen. And I tell this to my regulators, some of you who are in this room, I'm telling you it's going to happen and you're going to panic. The Fed sets short-term rates. We always say that, right? The Fed sets short-term rates. And they actually do set short-term rates. But what happened when inflation went up? They followed. Are they really in charge? I

just told you 30 trillion dollars a day. They're not really in charge. We've got to fix our permitting, our regulations, our immigration, our taxation, which I think they're on their way. We have to fix our inner-city schools, our healthcare system. If we fix those things we can grow 3% a year and all these problems will disappear. What I really worry about is us. Can we get our own act together, our own values, our own capability, our own management? Well, that was Jamie Dimon today in California with our own Morgan Brennan. Now let's bring in Kevin Gordon of Charles Schwab and Wealth Enhancement Groups, I echo

Yoshioka. It's great to have everybody. Chris Harvey, of course, is still with us. Kevin, I'll go to you first. Diamond hit on a lot of topics, and he was as provocative as he could ever be. He normally is, but I think he even stepped over the, I'm gonna be really provocative today, feel.

What do you make of what he said? And you can pick anything from his comment on China to the expectation you're going to get a crack in the bond market that we're going to have to deal with? I think the tariffs won, because it's so much front and center these days, especially today. But I think tariffs is interesting because when he points to the risk of the everything everywhere all at once moment of liberation day tariffs and the fact that that was really what beefed up all the recession forecasts and pulled forward the imminent risk of a recession and what the market started

pricing in. I think now we're back to this moment where we can start to digest and price in at a slower pace. What does this all mean? Even with the court rulings this week, it now kind of pushes back the timeline further as to figuring out what the ultimate hit is to the economy. And I think the important part to think about this, and as we go through all these negotiations with other countries,

this is not just about negotiating a 10% baseline tariff. There's sectoral tariffs at play. There are other potential purchase agreements at play, which you started to get a flavor of with the framework of a deal that was made with the UK. So I think now moving forward, and I think one of the reasons that we've sort of been shopping around

for the past couple of weeks and figuring out what direction to move, at least in terms of the S&P, is I think now figuring out and trying to price in what does this ultimately look like and how does this move through the trade python. Aya, do we have a relatively sanguine summer? Because we need to start thinking about that, right? June tomorrow. Or do we have some issues crop up that Diamond says, Mr. Diamond says, we need to deal with and we need to deal with them now

or we're gonna pay for it later. Yeah, hi Scott. You know, I think that, you know, in the summer, I mean, you never know what headline is going to impact markets, but you know, the way we're thinking about it is in the short term. You know, obviously trade and tax and fiscal policy overall is creating some noise here and it's impacting the bond market more than anything else. And I think we're going to all be watching the auctions. We're all trying to see whether or not the bond market is going to have, you know, big moves in terms of the yields. But I think when we look at the equity market, there's still that underlying long-term growth driver of artificial intelligence

and technology, and I think that's going to continue on. And so any pullback that we do get in equity markets, I believe is going to get bought. Chris Harvey, what if Diamond's right? What if we are going, in fact, to have a crack in the bond market? And what we saw recently was the appetizer for a much larger issue. Yeah, a crack in the bond market, I'm not going to tell you it's good. It's bad, right? What I think, when I look at the Trump administration, what I think is massive missed opportunity.

The Trump administration is talking about making housing more affordable. They had the opportunity to do that by reducing the deficit. If they had reduced the deficit in some meaningful fashion, right, then in all likelihood that was the big trade. That was a trade that would have surprised the market. We would have seen bond prices go up, yields come down, and affordability improve. They didn't do that. That's a massive missed opportunity. How can you be as bullish as you are? How can you have it both ways? You can peril the tax cuts that are coming,

but wish that they dealt with the deficit in a more meaningful way. Because if they did that, we would be where I expect us to be sooner rather than later. I still expect us to get there, but we could have gotten there sooner. It could have been a lot more productive. We could have gotten the housing market started.

That would have unleashed a lot of equity in homes. That would have caused people to be able to do issue home lines of credit. That would have caused another leg up in consumer spending. That didn't happen. Ultimately, I think rates are going to come down. One thing on rates that people I don't know really appreciate, if you look at the 10 year, it's been four and a quarter, the average has been four and a quarter for the last two years. You go plus or minus 25 basis points, 60% of the observations are there. You go plus or minus 50 basis points, 90% of the observations are there. That's more or less the cost of capital. Four and a quarter, four and a half, done. Let's end

the conversation and that's a fine cost of capital. We can do business. Your issue about is there a crack in the bond market, hey, that would be a problem. What we always talk about is a stepwise function up in rates, and if that does occur, we're going to have a VIX that does spike up. You were talking about the VIX earlier. You will have a VIX that does spike up.

Ultimately, can you fix that? Yes, I think we can fix that. And the other positive thing is, I think we really know how big the deficit is going to be, and we can start working from there. Now you're stopped out. There was a tremor in the bond market. There wasn't a quake. Okay. Diamond speaks of a larger incident that could have a dramatic impact on the market. Yeah. And stability in the market. That's what he's alluding to. A crack in the bond market points to an instability in a critical part of the market

that the stock market would not take well. Yeah, well I think that, and you add in the added pressure of kind of that unholy alliance, which was stock prices falling, bond prices falling, but also the dollar falling. And I think that that last component, that last leg of the stool, being the dollar, not seeing really any kind of recovery

from the most recent lows about a month ago. To me, I think that's a much more important story and part of this where, yes, the equity rally and the bounce, I think has been a good thing for risk assets in general, for financial conditions in general. But the fact that the dollar hasn't rallied back and hasn't strengthened, I think is not an alarm bell, but keeps you kind of attentive to some of the risks, especially from a foreign capital and foreign interest perspective into the US. We've been able to be fine, and economic data

has looked okay since that low on the dollar, but I think that that's something worth watching, especially if this crack in the bond market, assuming Jamie's talking about a spike in yields as opposed to a decline in yields, that would be the issue. And by the way, he didn't say if we were gonna have it in six weeks, six months, or six years.

Nobody knows, but ultimately, if you don't deal with the issues at hand, you don't wanna find out. Exactly, yeah. And the part about what's I think important about this mortgage and housing story, it sort of speaks to a bigger macroeconomic and sort of Fed issue where the Fed has often looked at

as and blamed for not cutting rates or being too late, especially in this environment. I think for something like housing, rates is not necessarily the issue. There's also an inventory story and there's also a home price story. And the fact that when you look at the majority of homeowners today in the existing home market, the average effective rate on outstanding mortgage debt right now is 4%. 30-year mortgage rate is at 7%. That's a huge differential and a gap that you really haven't seen since the 1970s. So the likelihood that you're going to see just this massive influx of inventory on the part of homeowners

that are just going to willingly go into the market is pretty low. So to me and to us, we don't really view this as an interest rate problem for the economy or for the market. So I wouldn't put as much focus on the Fed having to cut rates to sort of you know stimulate the stock market or stimulate the economy because the problem we face is more tariff and fiscal related it's not necessary monetary related. They don't seem like they're gonna do anything anytime soon. Anyway maybe I we have to wait till the fall. The other big story of this month as it comes to a close is the move in tech. Yes rates coming down and some of the sizzle coming off that obviously helped.

Nasdaq's up nine and a half percent. And what we learned yet again earlier this week is that the AI trade's alive and well. Thank you very much for reminding us, NVIDIA. Is that still going now to lead us into the summer? I think so. I think it remains the dominant theme in equity markets. It's not just a chip sector theme. We're seeing it across industrials, across utilities. You know, data centers continue to be, you know, additive and contributory to overall GDP

growth. And so, you know, I think it needs to continue. And everything that we learned from Nvidia's quarter says that demand remains very, very strong, and they're going to see an acceleration into the back half of 2025. Last word to you, Chris Harvey. I mean, you think this trade has legs. I do. Well, it was just put in the books at 10 plus percent on the Nasdaq. Still looks good. It's a beautiful, secular, US-centric, robust trade.

It has legs. It will keep going. All right. We'll leave it there. Good weekend, everybody. Chris, thank you,centric, robust trade. It has legs. It will keep going. All right, we'll leave it there. Good weekend, everybody. Chris, thank you, Kevin, to you, and I will see you soon. Back now to Christina for the biggest names moving into the close.

Hi, Christina. Hi, Scott. Well, shares of the gap. You talked about it earlier trending towards its worst day in more than a decade despite a top and bottom line B for the quarter. The stock initially moved lower after flat sales forecast, but really started to tumble on tariff fears. Gap warning. New tariffs could impact its business

by a hundred million to a hundred and fifty million if they remain in effect. Shares are down 19%. But beauty retailer Ulta, look at that, moving in the opposite direction, up almost 12%. And this is after raising its annual profit forecast and credited new launches of what else? Celebrity owned brands as a big reason for the strong performance. We did see that yesterday with health, by the way. Ulta also said lower inventory losses

and new launches really helped drive demand to its stores. We love the celebrities. Scott. All right, Christina, thank you, Christina Partzanovales. We're just getting started here. Up next, President Trump bidding Elon Musk farewell from the White House this afternoon. Scott. All right, Christina. Thank you, Christina Partzanevolis. We're just getting started here up next. President Trump bidding Elon Musk farewell from the White House this afternoon. So what will that mean for the future of Tesla shares?

We will discuss. We're live at the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back. It was so long farewell at the White House today. Elon Musk getting an Oval Office sendoff from President Trump as he officially heads back to his day jobs. Our Steve Kovach is here with more.

Steve? Yes, Scott. I really noticed this one. Musk has kind of been relying on this old playbook. He's deployed in previous Tesla crises to clean up his brand on his way out the door from the White House. He's claiming he's working 24-7, sleeping on factory floors or in server rooms, giving interviews to a bunch of media outlets,

including our very own CNBC. We saw this in 2018 after that go private crisis and the Model 3 Tesla production crunch. All of this because his chainsaw approach to slashing government spending, most notably effectively destroying USAID. And now Scott, there are a couple ways to look at this. Take Muskford's word that the clock just kind of ran out

to continue on as a special government employee. However, as recently as last week, he was telling our own David Faber, he continued working in Washington a couple days a week. He told Tesla investors as much on the last earnings call. The bigger factor though, the brand and reputational damage, which ultimately hurt his businesses came in promising to slash $2 trillion in funding

nowhere close to that. And many of Doge's estimates have found to be wrong. Scott. Steve, thank you. Steve Kovac with those events in the oval this afternoon. Tesla shares, well, they rebounded sharply and made the best month in fact since November. The question is, can Mr. Musk fix the damage he's done to Tesla's image? Phil LeBeau joins us now with more. And that is the critical question, because Phil, Musk's

political legacy is undoubtedly darker than what that pomp and circumstance in the Oval would suggest. And he's got work to do on that front. Yeah, and in terms of the Tesla brand, look at the sales results in Europe. Yes, some of this is because of the Model Y changeover, but make no mistake, it's clear that people have pivoted away from Tesla in different markets around the world, including here in the United States. To what extent? It's hard to quantify, but in terms of what Elon Musk will be focusing on, the Tesla priorities, if you will, he told David Faber, it's optimist and autonomous, and the autonomous part is crucial for Tesla. Robo taxi rollout next month, small numbers in Austin,

but people will be focused on seeing what kind of growth it has. Cyber cab, that's the completely no steering wheel, it's just the automated car. That production starts next year, but along the way, Tesla has to grow its autonomous vehicle subscription revenue. That's where the money is.

It's not in the traditional sales of Tesla vehicles. In fact, when you look at deliveries, they were down slightly last year. They were down, what, about 13% in the first quarter. Europe in April, they were down 49%. China is brutal on the competition, Scott. So as you take a look at where Tesla is, keep in mind the delivery numbers that we get

in early July, they may not be that great. And you will have some people will say, ooh, that's not good. The Tesla bulls who are grabbing on to the possibilities of the future, they're going to focus on autonomous and optimists. And at this point, you have basically Elon saying the future is going to be great. There's really very few benchmarks to know aside from the rollout in Austin next month. I thought it was pretty interesting as well in the Oval this afternoon, Phil, that President

Trump said, Elon's not really leaving, he's going to be back and forth, I think, and then Musk himself said, I'll continue to visit here, be a friend and advisor to the president. Couple issues with that. Will shareholders tolerate that given maybe they thought they were getting a clean break, like you're back to now sleeping on your couch in the office and that's where we need you to be. Right. And what the impact of still being involved could be as he tries to rehabilitate his image of sorts with prospective Tesla buyers. I think there are a core group of Tesla investors they're gonna buy it. They will, as Elon goes, they go.

And when you bring this up with hardcore Tesla investors, Scott, and you know this, we both know some of these people who have held the stock for a long time, and you bring up potential negatives, they all say the same thing. It's Elon being Elon. And if he's not gonna be at the Gigafactory in Austin all the time, that's fine.

He's driving this company forward. So I'm not sure him going back to Washington occasionally. I'm not sure how much that will further Weigh on Tesla stock. I think we're in a period here where it's gonna be a question of deliveries Earnings in the second quarter and then what do we see in terms of the growth of autonomous vehicle? Services and subscription revenue? That's what people are going to be watching. I get it, but it's not like... I mean, the stock's still 30% off of its highs. It's not like people weren't selling the name on the prospect of damaged and impaired sales for a long time.

No, you're right about that and there always will be. Look, we're going to see pretty brutal numbers in terms of deliveries for the entire quarter in Europe. Now, they don't break them out, but you can do the math. You can figure out what was US, what was China, this is what we get in Europe. And the numbers are not going to be good. And there will be some investors who will sit there and say, I don't like the trend when it comes to deliveries. But you're also going to have that hardcore Scott who sit there and say I don't like the trend when it comes to deliveries but you're also going to have that hardcore Scott who sit there and say it's not about deliveries it's about Robo taxi and the

potential for revenue growth that is going to be astounding in the future that's if you buy into it that's what you're going to have yeah Phil thanks appreciate that fill the bow up next Morgan Stanley's Chris Toomey standing by we'll find out where he sees opportunity for his high net worth clients this summer in the stock market. He'll join us right here post nine after the break. We are back.

A big question for investors on this final trading day of the month. Can stocks carry May's momentum into the summer? Let's ask Chris Toomey. He's Morgan Stanley, Managing Director of Private Wealth Management. Welcome back. How would you answer that?

We have a lot of momentum, obviously. Does it last? I think we're probably still range-bound. I think the concern we've got is that while I think we've taken the worst-case scenario with regards to the liberation day, we're in a situation where I think the market's right now probably pricing in the best-case scenario. I think everyone's talking about the fact that there's probably gonna be 10 percent tariffs across the board 30 percent for China I

think that's kind of baked in if you look at what's happened earnings expectations down about 5% this year down about 10% next year we still don't have any clarity with regards to what this is gonna mean going forward so you don't necessarily have guidance for companies to make decisions as to what this is gonna mean going forward. So you don't necessarily have guidance for companies to make decisions as to what they're gonna do in regards to this? Yeah, but you need that? I mean, if I told you, here, let me pick this.

If I told you, okay, 10% baseline tariffs, but we're gonna have tax relief and we're gonna have deregulation, which, you know, Jamie Dimon went down the list today of all the things that you need to fix that the regulators just have too much of a hold on. Oh, and by the way, because now the Fed knows what's going on, you're going to have tax cuts too.

And earnings were already better than expected. Where's the negative in that? So look, I think I think the earnings were better than expected after coming down. They were way better than I thought. And I think they're also expensive now, right? So we're still at 22. Expectations have come down. So from a pricing standpoint, the market's still expensive.

If you look at the Mag-7, they're still now north of 40% or 40 PE, right? So in our minds, the market's not really pricing in some of these risks that we still haven't worked out, right? And so in our mind, until you get some of that clarity, I think we'll be range bound. I think the good news is, is we've taken the worst case scenario out of this. I think until we resolve some of these trade disputes,

until we actually pass through this triple B bill, until we get some real certainty within the bond market, we would still be a little bit cautious with regards to public- We're not gonna, the market's not gonna wait until the bill is signed, sealed, and delivered. I mean, doesn't the market. The market is not going to wait until the bill is signed, sealed and delivered. Doesn't the market anticipate

stuff like this? And probably already has to some degree, wouldn't you say? Well, look, I think that's the point is that I think their positioning is probably too positive. In our minds, we still think if

you look at GDP growth next year or this coming year, it's coming down. I think prices are going to go up. I think the Fed, as we heard yesterday, is still on hold. So what we've done is we've taken our earnings expectations down. We've modeled in the fact that the Fed

is going to continue to be dovish this year. And our expectation is maybe second half, once we get through some of these things during the summer, we start looking into 2026. And to your point, some of these other things that we're seeing start becoming more prevalent, right? So we're in a situation where we start to see deregulation coming in, which should be beneficial for financials, which we're starting to add to.

We also think once the bill is passed, we'll get some real confirmation that we're going to be investing into the U.S., that that'll spur economic growth. So we're adding to some cyclicals a little bit in industrials and in energy. But we still think the market's probably expensive right now now and we don't want you to get too aggressive right now from a position standpoint. Part of your answer just now, you said prices are going to go up. What prices?

What are you talking about, like consumer prices? Well, prices with regards to stocks or prices with regards? I don't know, you answered the question and you were listing all the things that were gonna happen and one of the things you said were prices were gonna go up. You're talking about companies raising their prices? So yeah, so there is gonna be inflation, right?

So you've got, you've got the band coming down, you've got prices going up because, you know, their tariffs are gonna go from 3% to 10%. So that needs to be built into earnings, right? So whether or not companies are gonna feel that pain, whether corporations are gonna feel that pain, whether consumers or governments are gonna feel it, it's going to draw growth down, right?

The good news is that- That's inflationary, isn't it? No, that's inflationary. So prices are going down. Drawing growth down. Demand is coming down. Demand comes down. It's deflationary.

It's stagflationary. So prices are going to stay high or go higher because costs are going higher. You've got a situation where the global supply chain, where a lot of it is on demand with regards to coming out of China, that's at 30%. We still haven't resolved that, right? And so you can see that with companies that have direct connectivity to China actually not doing as well.

You can see that in the Mag-7, and you can see that in the rest of the overall S&P 500. So in our minds, that's gonna be a stagflation issue. If we do see GDP growth coming down, that might give us the opportunity for the Fed to step in next year and start cutting rates. And that we think would be the- Next year?

Yes. So you don't think they're gonna do anything this year? No, we don't think they'd move on the data until looking at something in September or October. And then that would probably foresee something happening in next year. But what if they have more clarity on the tariffs? If they already think that they're on the margin, maybe too restrictive, if you listen

to what Waller said and some of the others who have made comments, if you clear up some of the uncertainty around the tariffs and the trade war, what precludes them from cutting rates later this year? Without an economic calamity to have to act. Because we haven't really seen the full effect with regards to the inflation that's gonna be created because of these tariffs, right? We've still kind of delayed out these different negotiations

with regards to trade tariffs. We're in a situation where companies front run their inventory in anticipation with regards to what was gonna happen. And I think some of that is not necessarily flowing through the inflation data yet, and not necessarily flowing through earnings yet. So I think it's just delayed.

Hasn't the front running already happened? It has, but the data hasn't- On consumer and corporate fronts? It hasn't flowed through yet until this data comes in in next quarter. And I think that's why I think you're gonna see the Fed looking at data more specifically in September and October than now.

Are you worried at all about what Diamond said today about a crack in the bond market? 100%. I think that's the biggest risk to the market. I think 10-year at 450 weighs on the market. 10-year at 5% becomes a real big problem. So I think focusing in specifically on why is he saying this,

I think he's looking at that bill and he's saying these deficits are going to be a problem. Whether they're today, six months from now, six years from now, that's the biggest concern. I think he's telegraphing to Washington, hey we are concerned about this and the bond market's going to be concerned about that. And if something happens in the bond market it's going to directly in fact the equity market. Well there's no question about that. It's the question of the likelihood that something gets messy again, that as I said earlier with one of our guests, that it was an appetizer in the previous form in the bond market that

rattled everybody, including the White House, and it becomes something more serious this time. Right. And I think that's why you saw the administration pull back after Liberation Day because of what was happening in the bond market. The concern is, is what's gonna happen when these deficits continue to add up. We saw a weak bond auction about two weeks ago in the US.

We saw a weak bond auction in Japan. There's people talking about the CDS market. Obviously, there's issues with regards to reading too much into that. But if we continue to get noise in the bond market, that's gonna put pressure on the equity market. And so in my mind, going into the summer with all of these things holding out, you don't necessarily want to be aggressively adding exposure to the equity market.

I wouldn't necessarily be taking money from the market, but I would be maybe writing calls on these names that you really like because I think we're probably in a range bound for the next couple of months. All right. It's good to have you. It's great to get your perspective, especially as we start the show with a strategist who has a target of 7,007 and get a little more cautious perspective from you,

which is I'm sure why you make the big bucks and why your clients like you so very much. Chris Toomey, thank you so much. Thank you. All right, up next, we track the biggest movers. As we head into the close, Christina Partsanevalos, triple duty for us, I think, at least, unless I lost count. Yeah, just like yesterday and the day before.

But let's talk about one enterprise software firm plunging, I'm smiling, but I shouldn't smile, 12% on slow and growth, while a chip maker is also down 6%, despite CEO reassurances about a major cloud partnership, which driving these tech names right after this break. Welcome back. We're Lesson 15 from the Closing Bell. Back to Christina now for a look at the key stocks that she's watching. Please tell us. driving these tech names right after this break. Welcome back.

We're Lesson 15 from The Closing Bell. Back to Christina now for a look at the key stocks that she's watching. Please tell us. It's not good news. Elastic shares plunging 12% after the Enterprise Search software company posted earnings that showed their growth is hitting the breaks. Cantor Fitzgerald, RBC, just two examples lowering the price targets, citing weaker cloud revenue projections.

And that's spooking investors who were hoping for more momentum in the AI search space. Shares, like I said, down 12%. Marvell CEO Matt Murphy tried his best yesterday to calm investors' fears about the company's custom chip business with AWS as part of Amazon, but the market clearly isn't convinced. Shares are dropping 6% as concerns persist that Marvell is losing significant custom chip content in AWS's next generation Tradium 3 processors. Their custom AI chip event though, I want to point out, is June 17th so that could you know, strum up some excitement in this name. But shares are down about 6% Scott. Alright, thank you very much Christina Parts-Novella. Still ahead, Bitcoin wrapping up a big month of its own. What's driving that move and what could

be next for the crypto space in general we'll tell you when the bell comes right back. Coming up next with wall street analysts getting even more bullish on netflix we'll tell you why the details and what could be next for that stock inside the market zone. We're 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 a big month for Bitcoin. Taneya McKeel is going to tell us why and Julia Boorstin on why analysts are getting even more bullish on Netflix. That seems like it's never going to stop. Alright Michael, May is going to be in the books. I'll get you in a minute. Start with Bitcoin. I knew I was going to do that. So, Naya, tell us about the run in Bitcoin.

Gas got on track for an 11% gain this month and the driving force has really been this adoption story at institutions and public companies. About $5.5 billion in inflows into Bitcoin ETFs in May. That uptrend is expected to continue and support Bitcoin price through June. You saw this week the Trump media deal to buy $.5 billion dollars in Bitcoin alongside other companies deploying similar strategies so investors are going to be tracking those purchases. Despite market sensitivity to Trump's statements about tariffs or whatnot, White House support for crypto should allow Bitcoin to keep this uptrend in the month ahead. Vice

President JD Vance was at the Bitcoin conference this week reiterating that and trying to inspire some confidence about the future of stablecoins. That said, Congress is the bigger question mark. Some positive developments on stablecoin legislation this month, but what happens next in June as the genius bill goes to the Senate floor will have a big impact on sentiment around Bitcoin. All right, Taneia, thank you very much. Taneia McKeel.

Julia, tell us more about Netflix today. Well, Bank of America raising its price target to $1,490. It's more than $300 hike for that target price, saying it's well positioned given the company's unmatched scale in streaming, further runway for subscriber growth, significant opportunities in advertising and sports and live and continued earnings and free cashflow growth. Evercore ISI also raising its price target by $200 to $1,350, saying, increased adoption and attraction of live events is evidence of what they call bundle power, and as Netflix adds to its content, its ability to raise prices will increase as well. Noting that Netflix's ad-supporting offering continues to demonstrate market expansion potential as well as anti-turn leverage. And both Bank of America and Evercore reiterating their outperform

ratings on the stock and in fact 70% of analysts have a buy rating on Netflix despite that stock's huge run. Back over to you, Scott. All right, Julia. Thank you, Julia Borson. All right, now, Michael, your first word, in fact, is your last word today. I faked you out. Give us something to think about, the way you're looking at the market and what we learned this week.

Well, this week, actually, the main thing is we sort of preserved the gains of the first half of this month and actually all the way from the lows. You're actually going to end up up on the week. We're digesting for two weeks what was going on before within the range. It's hard to say that the market is really reflecting all that much in the way of new information. We get a little bit of a wobble every time it feels like the trade frictions might be reescalating and then vice versa.

I think you could take some comfort in the fact that, again, it's another week where the hard economic data held in there, so there was no reason to panic. I'll note for sure, though, that it was a little more of a narrow, you know, rally in this last little bit. You said MAG-7 come back pretty hard, and even within that, you know, today, Nvidia backing off and pretty much giving up the post-earnings bounce.

We remain in this range I keep showing that is encompassed and reflects the single day move on November 6 which is really a wait and see market with a wait and see fed as everybody waits and sees whether the hard data in the economy is going to hang in

there or not. So all that being you know kind of hanging over the market I think you have to say it was a pretty benign showing this week. I mean, it feels like we have some good momentum despite, you know, certain price action this week. The question, I know you've been looking at it lately too, as to whether we can carry it into the summer. Yeah, that is the big question. I mean, I think right now it looks like everything is

fine. You're working off what was a pretty overstretched position that the market got into a week ago Monday, and you're doing it in a way that's really not causing too much damage. I still think you have, let's call it 4% downside from here, where you'd still say, hey, this is kind of routine stuff. And it looks like we maybe can look to July for some resolution, although we might have to push that out, given the recent trade headlines. All right. Good weekend to you, Mike. Good weekend to everybody. We clock have to push that out given the recent trade.