Closing Bell - Closing Bell: 6/17/25

Episode Date: June 17, 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.

And welcome to Closing Bell. I'm Mike Santoli in for Scott Wapner. We are live from Post 9 at the New York Stock Exchange. This make or break hour begins with stocks near their lows of the day as investors grow apprehensive, anticipating further Mideast hostilities one day ahead of what could be a consequential Fed decision and outlook. The S&P 500 sliding in the past 90 minutes or so as President Trump reportedly considers having the U.S. take a more active role in the Mideast conflict with the index sitting just a touch above Friday's low.

That was set during the initial reaction to Israel's attack on Iran. You see the S&P down three quarters of one percent right now. Let's get the latest on where things stand from Eamon Javers. Obviously, Eamon, a lot of threads to pull together here. Yeah, hey there, Mike. President Trump was back at the White House as we got word earlier this hour of loud explosions in Tehran and reports from the Israeli military that there might be Iranian missiles heading toward Iran.

Today, the president has been stepping up his rhetoric against Iran on social media. In a post this afternoon, he wrote, We know exactly where the so-called supreme leader is hiding. He's an easy target, but is safe there. We are not going to take him out, kill, at least not for now, but we don't want missiles shot at civilians or American soldiers. Our patience is wearing thin. So that leaves open the question, Mike,

of whether Trump, who campaigned on the idea of ending wars and who has sought to position himself as a peacemaker, is considering bringing the United States into the war against Iran alongside Israel. In another social media post, the president wrote, "'We now have complete and total control over the skies of Iran. The president doesn't say in that post who exactly he means by we and whether this refers to U.S. military assets over Tehran or separate Israeli action. Either way, the president is in the situation room with his top advisors at this hour. We don't know if we're going to see him on camera for the rest of the day today, so we'll keep an eye out on social media, Mike, to see what else the president has to say.

And I guess, Eamon, we don't quite know the range of options that the administration, you know, the cabinet might be considering right here. We don't really know if Israel's going to kind of go ahead with a plan and maybe the U.S. follows along. I mean, I guess, despite the fact that we have this unusual real-time posting of the president's thinking on these matters, we don't necessarily know what's being thought about. Yeah, we don't know what's on the table here, Mike. And obviously the options for U.S. involvement here would range anything from intelligence

sharing and support aircraft and equipment all the way up to full U.S. military participation and potentially boots on the ground, right? That's the scale of the range here. What the president will ultimately decide to do, if anything we don't know. It's interesting because, you know, sort of the MAGA Republican appeal to American voters was in large part this idea that this was a president who was going to campaign to get the United States out of so-called forever wars in the Middle East, not launch new ones. So, excuse me while I kill that.

So that's the question here. What direction is the president going to decide? What does he think is important for his political future and for the region and for the United States more broadly, of course? Yeah, obviously kind of potentially brings up uh... lots of other questions and frictions and you know never send a source to voicemail and to get back to the whole that's right will catch up with you uh... a little bit later

all right let's bring in robin hoods stephanie gild axonics peter chikini and wilmington trust megan shu talk about some of the investment market economic implications of all this that we've been talking about also everything else that's going on. Stephanie, you know, on the on the spectrum of, you know, telling investors, tune it out, ignore what's happening geopolitically, because it may not matter long term to reconsider your risk profile or look for opportunities. How would you characterize your approach to all this?

I think from a historical perspective, if you look back over the last 80 years, 35 of the last 36 times that we had geopolitical tensions, it didn't matter after six months. So it kind of depends on your time horizon. I think in the short term, if you need money that you have invested, you probably want to think about making sure that you shore that up. But if you're thinking long term, it does sometimes end up being an opportunity. Overall, we have a lot of uncertainty in this market, not just from a geopolitical perspective,

but also from inflation that could stem from changes in the labor market, inflation that could stem from tariffs, growth that could come from an implementation of tariffs that we don't know yet. So we're encouraging our customers to think in a balanced way and allocate to things that are high quality and low volatility, have some dry powder.

And then on the other hand, you know, there are opportunities coming. Like when we look across like broad markets, they don't look cheap, but there are pockets of the market that are inexpensive. And there are still the promise of AI and secular growth from that energy needs. So I think you do kind of have to in some ways tune out the noise and focus on those

two scenarios. And Megan, the question I guess is not wait for investors shouldn't wait for these things to be figured out and solved and clarity coming and all that because you may never get there. I guess the question is, are the risks properly priced in asset markets right now? And how do you think an investor should consider the risk reward profile in stocks? Yeah, that's absolutely the question. And if you think about the balance of risks today, we see them as still, I would say, fairly evenly distributed on the positives and the negatives, as long as you're looking out over a nine to 12 month horizon. I would say in the shorter term, there is a

possibility that given where valuations are for equities and what has already been priced in, we could see a little bit more volatility as we head into the summer. There's the possibility that tariffs are not fully reflected in the economy today because we know that there was a lot of front running and buying up of inventories and as we move into the summer that will be worked down so those companies will need to replenish at higher tariff prices. Also the possibilities we had into July that we get

higher tariffs in the absence of other trade deals so short term- you can definitely make a little bit of a longer list on the negative side that's that's almost always the case of course- and markets are. Famous for climbing a wall of worry so

we are still positioned with a neutral or a full allocation to equities. But over the next nine to 12 months, it really does depend on that balance, I would say between where we end up on tariffs as well as what is happening with the tax bill. The tariffs could go higher, the tax bill is getting negotiated down

in terms of fiscal stimulus. So on the margin, that is a little bit of a negative development in recent days. Yeah, Peter, as we, I guess, juggle all of these exogenous seeming events, whether it's the geopolitical shock or even the policy issues when it comes to things like the budget bill,

we can kind of create our probabilities and figure out what that means. But what's the baseline economic performance in the U.S. right now by your assessment? Because one of the reasons we were able to rally so hard off those early April lows was not just, oh, okay, we're not going to get the worst case in tariffs. It was that the U.S. economic data, the hard data, still held up well enough to plausibly say we can kind of walk that bridge to the other side of the policy questions.

Yeah, I certainly agree with your assessment of the march off the liberation day low. It was certainly catalyzed by the 90-day reprieve, if you will, and agreement to cooperate in some way. But certainly investors and equity market participants in particular gotten comfortable with the idea that economic data and employment in particular has held up pretty well we've had some very weak survey data for quite some time if you look at all the regional surveys in the manufacturing side right now they're negative

uh... we started to see a bit of hard data on the employment side that's weakened uh... continuing claims of actually crept closer to two million while initial claims have stayed relatively subdued. But the risk to a stagflationary scenario, I believe, has increased quite a bit. And given where the S&P is valued at the moment at about 23 times forward earnings for 25,

this is really, in our view, the perfect time to think about investing in alternatives, private credit, structured credit, where we think there's just a much better risk-adjusted return profile in those asset classes. And they're very well suited in addition to the fact that bank lending has remained relatively tight, providing opportunities for firms like ours to find, you know, again, superior risk adjusted returns in those asset classes. What's the case, Peter, for private credit being better insulated against the stagflationary outcome than other forms of, know riskier assets. Well I

think you know it's it's the idea that you can get excess spread- in markets that are underserved by regional banks in regional banks while no one talks about them anymore are still nursing their wounds wounds from what they went

through in twenty twenty three- they still have balance sheets that are loaded with commercial real estate assets which and loans rather which you by the way, is going to provide generational opportunity to refinance $2 trillion worth of loans coming due. But you can get excess spread in private credit that you can't get in the public credit markets, nor frankly, on a risk adjusted basis in equities at the moment given valuations. Right. So I guess you're kind of getting paid to supply capital into an area of the economy

that maybe has scarcity of that risk capital. It makes some sense. Stephanie, you mentioned the market doesn't appear cheap at the top down level. Certainly true. Historically, valuation tends not to necessarily be, you know, a big Achilles heel for returns, unless let's say the Fed is hiking rates, or, you know, earnings estimates are coming down,

or earnings growth is not there. So are you comforted by those two things, or do we still have questions? I think earnings estimates have come down, right, for 2025. They were at 12, now they're at 9 percent earnings growth. They haven't really moved for 2026. So that makes me a little bit nervous. They're still at like 13 percent off a lower base, albeit.

But I do I think what I'm most worried about is just the direction of interest rates. I think, you know, we've got a lot of risk for that, particularly the deficit. And you know, that kind of thought that perhaps the US bond market won't necessarily be the basis for the entire world anymore. I think that is becoming more and more of something to consider. I'm not saying it will happen, but the way that our deficit is heading

and the fact that we're not necessarily dealing with certain things, that has implications for stock valuations, for credit valuations, for everything. And that's where I get worried. But if you look at like mid cap stocks, for credit valuations, for everything. And that's where I get worried. But if you look at like mid cap stocks for example, which I know they tend to be riskier in an environment like this where there's more uncertainty,

they are actually really cheap. Like their long term valuation are 19 times, they're at 14 and a half times if you agree with the earnings growth estimates, which actually are not very high. So I actually think there's positives here. The other thing I would say is that we've seen companies for the last few years allow their sales growth

to be lower than their CapEx growth. And that's actually, that has deepened even more for estimates for this year. And I think that will continue. Like I do think CapEx is something to be positive about in all of this, which actually can create better earnings growth. So you're okay with the sacrifice of free cash flow

in the near term in that scenario? If it brings you good returns, right? Like if you, it's just like investing in any alternatives. Sure. Megan, you mentioned earlier that you felt as if, you know, the in general risks seem kind of balanced. They're certainly present on both sides with regard to inflation and perhaps growth.

Do you think the Fed's going to continue to see it that way when we hear from Chair Powell tomorrow? And, you know, I think you're kind of thinking the Fed's going to be forced into easing soon. Does that mean that growth is the bigger issue? Yeah, we do see there's a lot of concern about the inflationary impact of tariffs, and we do see them as more disinflationary than inflationary because we see the hit to growth outweighing any increase in prices with the really the main punchline being that if you have to pay higher prices for goods you're probably going to offset that with less spending on the services

side so we have a view that the Fed will leave the door open tomorrow to a rate cut starting in July and then cut by a hundred basis points. This year because there is so far no evidence of- really re accelerating inflation and it's at the fed target and we are a little bit more- cautious on the growth

outlook with about a fifty fifty. Recession probability this year so as we think about positioning- portfolios you know great point about valuations for smaller companies but I would say we're more comfortable paying up for the relative stability of earnings and profitability of larger companies and smaller companies today because they're just more exposed to

a slowing economy more exposed to supply chain disruptions and there's a lot of risk there which probably partially explains why they're trading at a discount to a large cap. Peter, describe what you would define as, you know, stagflationary risk. We talking about inflation being sticky around these levels, maybe a little bit of a bump higher and unemployment leaking upward from here, or is it something more onerous than that? Well, I think Meghan actually articulated it pretty well. Bouts of inflation, you know, usually don't last very long, because the sort of reflexive,

the reflexivity of the economy is that the economy slows, because people can't tolerate higher prices, so they consume less. And so that's sort of how I think about a stagflationary scenario. Unfortunately, now you have the geopolitical risk of higher oil prices in a conflict that may not be as quickly resolved as some may think. And so I'm not saying it's like the oil shock that we saw in the 70s. But when you combine what were lower oil prices, now higher oil prices with tariffs in the near term, let's call it three to six months, you see sticky inflation, which forces the Fed to hold, which exacerbates the slowdown in growth.

So I think I see it the same way as as as Megan does. If that all were to play out in that way it would seem as if you know longer term treasury yields might not you know have a whole lot of ability to stay elevated would would you think that's the case Peter? Yeah I think I think it's it's uh the sort of timing of it is that the Fed is stuck for a bit uh longer yields have stayed sticky for a bunch of reasons. Let's not forget that the tariffs created a deposit flight from US banking institutions. And on the other side of the balance sheet

from the deposit liability or treasury assets, and oftentimes bank will sell those treasuries and longer dated treasuries in some cases to fund the deposit withdrawals. And so I think we've had an unusually- sticky ten year- relative to really what has been slowly slowing growth- and we I don't

expect that to last and at the at the end of the day let's call it into the end of the year. I would expect. Treasury yields to be lower as well. Well they are today just a bit under four point four- percent. On the ten today just a bit under 4.4 percent on the 10 year we're getting that treasury bid that we didn't get on on friday with some of these headlines.

Stephanie, Peter, Megan thank you so much appreciate the time today. Let's get to Steve Kovac for a look at the biggest names moving into the close. Hey Steve. Hey there Mike yeah Verve Therapeutics those shares are soaring after the gene editing startup agreed to be acquired by Eli Lilly in a deal worth up to $1.3 billion. Lilly's gonna buy Verve for about $10.50 a share. That's an almost 70% premium from yesterday's close. Verve shares up about 80%, Eli Lilly down slightly. Over to Jabble now, shares are higher after the electronics manufacturer lifted its full

year guidance and posted a Q3 beat on the top and bottom lines The company said its intelligence infrastructure segment remains a critical growth engine amid accelerating AI driven demand Shares leading the S&P up about 8% and change Mike send it back over to you. Alright Steve. Thank you We are just getting started up next It's the latest threat to invVIDIA's AI market dominance. Christina Partzanevalis is live at the Amazon Web Services Lab in Austin, Texas, with a look at what's coming up.

Hi, Christina. Hi, Mike. AWS launching an update to one of its chips that could threaten the market share of traditional players. Like you said, I'm at Anna Perna Labs in Austin, Texas. Coming up after the break, we look at how Nvidia, or I should say, Amazon, AWS, is building a chip

army against Nvidia. Those details next. Welcome back. Amazon Web Services unveiling an updated CPU as the company continues efforts to take on Nvidia in the cloud wars. Christina Partsanevolis is back with us from Austin, Texas, with more on that. Hi, Christina. Hi, this is exactly where AWS Amazon Web Services chips are born, and Aperna Labs. And today we are announcing the latest,

the update to the Graviton CPU, which will now host about 600 gigabytes, I should say, per second of networking bandwidth. That should be, according to Amazon, the largest capacity in the public cloud at the moment. And if you're wondering, oh my gosh, I'm confused, what does that even mean? It was described to me as about 100 CDs per second running through a system. So that's just how quickly data is being sent and received to these Graviton chips. But overall, this is marking increasingly a win

for this lab here and their custom chip strategy, especially against traditional players like Intel, as well as AMD. But the real battle, the real battle is what all of these smart people around me are working on. That would be the Tranium chips, the Tranium chips, especially Tranium 2,

which Amazon just recently announced not too long ago that they are deploying hundreds of thousands, about half a million chips, especially Tranium 2, which Amazon just recently announced not too long ago that they are deploying hundreds of thousands, about half a million chips specifically for one project to power a supercomputer, AI supercomputer that Anthropic would be using. They're saying this could potentially be the largest supercomputer out there and I spoke to Gadi Hutt, an AWS executive, who spoke about the differences between Blackwell chips and AWS chips. Listen in. Oh, the mic.

It seems like you don't have the sound bite. Yeah, you can tell us. Yes, you don't have the sound by it. Yeah, you can tell us. Yes, you don't have the sound by it. That's unfortunate. I thought maybe, you know, I wasn't hearing properly. So what he essentially is saying is that the, in regards to the Blackwell, the major selling point, the secret sauce for AWS happens to be price performance and really just the cost for customers. That's their major selling point. You have the H100, which may be a little bit better than the Tranium 2 in terms of performance, but not when it comes to costs. And that is a major selling point.

And to this point here, I'm going to interrupt and I'm going to host, hold you these two Tranium 2 chips. And this is exactly what Claude 4, that would be Anthropix latest AI model. Claude 4 is trained on these particular chips, which just really shows not whether AWS can compete in the space, but rather how much market share Nvidia is losing in the near future. Mike? Yeah, no, that obviously, how fast is the pie growing?

How much is Nvidia gonna keep? All fascinating stuff, and I don't know, how many CDs are you holding there implicitly at this point? Thousands? Well, these are two chips, but definitely, yeah, thousands. Yeah, good. You like the analogy.

Thank you. I do. Thanks for bringing it back to my generation. Christina, thanks so much. We'll talk to you again soon. Thank you. Let's bring in Intelligent Alpha founder Doug Clinton. Doug, how do you think about all of this?

I mean, is it Amazon just, is it a hedge? Is it a new business? Is it just for their mostly internal use? Is it a new business? Is it just for their mostly internal use? Is it an actual threat to NVIDIA? I would say first and foremost, Mike, it's not really a major threat to NVIDIA, at least if you're thinking about it over the next two to three years. And the simple math for me is, if you think about what is the real customer set for Amazon's really, I mean, we're talking

about GPUs today, the Gravitons, the GPU, Tranium and Inferentium, those are their GPU-based chips that really focus on AI customers. We know they're working with Apple, they're working with Anthropic and Databricks, but I think they're essentially boxed out from the big hyperscalers. So you talk about Google, Microsoft, Meta, Oracle. Those companies aren't going to want to buy chips from really one of their biggest competitors in the cloud space. And so could they eat away at the edges of Nvidia a little bit?

Yes, but I don't think it's a true threat to dismounting them from the lead. For so long, after the advent of Chatch GPT and the excitement that first hit about the AI infrastructure story, it really has been a keep it simple principle when it comes to Nvidia and the other huge companies that could dominate and lead. Is it changing at all? I mean, we've had this sort of affirmation of the overall theme and maybe how sustainable it is over the coming quarters, but is it gonna splinter out or they're gonna be kind of these bank shop plays for you as an investor?

I think about that in two ways. I mean, number one, what are the companies that are currently public, you know, that aren't the hyperscalers, the mega caps that we all sort of own. One that we have owned at Intelligent Alpha that our models like, our AI models that pick our stocks, is Marvell, which ironically is actually one of Amazon's suppliers on the custom chip side.

There's been some controversy, essentially, about whether or not Amazon might start working with another chip company to develop some of their GPUs, their custom GPUs. It sounds like Marvell still has their foot in the game there. I think any positive news on that front would be great for the stock. That's one area we've looked. The other area, Mike, is the IPO window does feel like it's open. You look at some of the successes more recently. CoreWeave, especially in the AI space, Circle, incredible IPO. I think you're going to start seeing other companies like Databricks potentially come out and go IPO.

And I think those are going to be a great place for investors to look for AI exposure. Wondering what you think about this story in the Wall Street Journal about Microsoft and OpenAI continuing tensions and frictions and whether in fact they might be at odds along certain issues here and what it means for OpenAI's position if anything or Microsoft's kind of leverage in this whole thing.

It feels like the drama of the relationship that sort of never ends. It's been 12 months I think where we keep hearing that there's sort of frictions here and it feels like it's coming to a head about a few specific things. I mean, one is it looks like OpenAI wants Microsoft to sort of pretty significantly change the original terms of the deal around some of the royalties that they were entitled to, shifting that to more of an equity stake.

And then the other piece seems to be around IP, they're trying to acquire this company Windsurf, which is in the coding space, that kind of directly competes with one of Microsoft's co-pilot products, and so trying to carve out, what does it look like if their businesses start to compete a little bit more directly? For what it's worth, I just don't see how they get

fully divorced right now. That might be an option a few years down the road, but I think from here for the next couple years, it feels like they still kind of need each other. Microsoft has the infrastructure, they have the customer base, they're one of the preferred partners, obviously, for distributing GPT.

And OpenAI still needs all of the computing power that Microsoft's bringing to them. Are these models, the large language models, or whatever next iteration of these models there the large language models, or whatever next iteration of these models there's going to be, isn't going to conform to the winner take most type of market share distribution we've gotten used to in parts of the internet and other parts of technology here.

How much room is there for all these different baseline models? I think it will be winner take a lot, and it really does feel like we're sort of almost narrowing in a sense the real competitors to be the true breakout foundation model winner. We used to talk about a world where there were sort of four players which was Google, OpenAI, Grok, and Meta. I actually feel like Meta has sort of fallen by the wayside. I think that's one of the big reasons why they made their big investment in scale

more recently to try to supercharge their AI efforts. But it feels like kind of a three horse race right now for the foundation model crown. And I do think it will be winner take a lot. It might not be winner take all. I think there will be room for certain use cases where some models might perform certain tasks better than others. But I think we're going to see those three models really jostling for position here with outsiders like Claude, you know, over the

next several years. All right. We will be here with you watching the play out. Doug, thanks so much. Appreciate it. Thanks, Mike. All right. We get the S&P down about three quarters of one percent. You have WTI crude about 73 and change the VIX just above 21. All of those just shy of their most extreme levels from last Friday. Up next, we're taking a look at the technicals and the state of stocks heading into the summer.

JP Morgan's Jason Hunter is standing by with his strategy. Closing bell will We're right back. Welcome back. The S&P 500 extending its pullback this afternoon pushing it below that key six thousand level joining me to discuss the key levels he's watching JP Morgan head of technical strategy Jason Hunter

Jason good to have you coming in. Thanks for having me again Mike. You know an impressive rally since early April by really any measure the persistence of it the breadth of it the the magnitude of it but it slowed down I was making this point like in the last several weeks even it's just kind of had this sort of like smaller steps narrower ranges what does that tell you and how do you think it breaks from here? So as a technician when you see that type of pattern develop, the loss in momentum and even over the last couple weeks the breadth has narrowed, stocks above their averages, stocks at 52-week highs that's contracted. You look around the

globe a number of global indices both in DM and EM have stalled in range since mid-May. That suggests rally exhaustion. And even we look for very specific patterns, momentum divergence is one we're very focused on. That tells you there's a bias for the market to correct over the short term. We don't think it's going to be major. We think we could see a bit of backing and filling maybe down to 5,800, 5,700s given that setup.

But that should be well supported there because the seasonals during the summer are still quite positive. So that's like, call it a 5% pullback from the recent highs you think is in the cards. Is there a way to try to reverse engineer why the market has been, I guess, as resilient as it has? I was even pointing out, you know, we had that little break on Friday and, you know, didn't even get to its 20-day average, I'd say, for the S&P 500. That's right, yeah. And when you look at the technical setup,

really for the last two weeks, it's been, as a chart watcher, you're like, okay, this is pretty negative. I should expect negative price action. You think about the headlines over the last two days and like, why aren't we getting it? I think it comes down to positioning. I don't think the speculative community

is overly long here. The trend following CTA community is probably somewhat long, but not over their skis. And I think for the retail community that's really helped power this rally, I don't think that they'll try and sell ahead of a correction. It's they'll have to, you'll have to twist their arm.

So it really will have to come from the specs first. Before that, I think that's part of the reason why it just hasn't sold off yet. Yeah, retail traders, I guess, it's kind of like they're maybe slow to sell their losers, put it that way, as opposed to having a more rigid sell discipline. The Treasury market, you know, it gets people very excited when yields have gone up to the upper end of their recent range, but I guess you look over two years, they haven't really gone anywhere.

So what's that market telling you right now? So what's most interesting for me looking at the treasury market, the front end has had the Fed price for you know three four eases for a while. It's pretty much range bound. For this year though the term premium, you know the weakness at the long end, the curve steepening, the narrative around that both the loss of US exceptionalism and the questioning around fiscal discipline. What's interesting is the bonds actually carved out a decent multi-week yield top pattern as it's retested the cycle cheap,

let's call it 415 to 418. And I think if you were to break through, I'm sorry, 515 to 518, if you were to break through 480, I think you could see a decent- On the 30? On the 30-year bond. I think you could see a decent impulse to lower yields as far as 460, 455 given the way the chart

set up. And I think that's very much an out of consensus type set up. And when you think about the sentiment and narrative where it is now and the chart forming that, as a technician that's what gets me excited because it's very much against the grain in terms of what the narrative is out there. You mentioned that on the equity side things have kind kind of narrowed out, you know, as the rally has matured. What would you think tactically in terms of parts of the market that look better or worse positioned, that maybe they would do worse in this pullback you're expecting or that you would would expect to kind of outperform? Well, ahead of the headlines

this week, it was the deep cyclicals, including materials, energy. When you looked at the commodity markets, they seemed very much well contained below their breakdown levels that were you know that occurred in March and April around the uh the tariff headlines and that very much looked like so that's still the case with materials um in fact the base metals look like they they are exhausted and some are already rolling over um energy a whole different story because crude squeezed through its resistance in the 60s and got to 80 and we'll see where it gets before this current crisis abates. But I still think probably the more cyclical side of the market, small caps are also well contained below their breakdown zone. They're probably the more vulnerable. It looks like people are crowding back into like the quality, the mag seven, the big AI tech name. That

seems like that'll be the one that holds up well if the market sets back. Yeah, maybe the new kind of defense. And then seasonal stuff, how much does it factor in if at all? I mean, July sometimes can get dicey. Yeah, I think like for me, the seasonals don't factor in so much other than the fact that you rarely see a sharp sell off during the summer months. So that's what makes me think, you know, 5,800 is probably support here. Our key medium-term support is 5,600.

I don't think that gets challenged maybe in the September-October period when seasonals really become a factor. But I do think if we see weakness, it will be supported and bought. You'll get your buying pressure underneath it. Okay. So 5,800 is like about 3% down from here. We can have that as our mental stop for now. Jason, thanks a lot.

It's my pleasure. Thank you. All right, up next, we are tracking the biggest movers as we head into the close. Steve Kovach is back with us. Hey, Steve. Yeah, Mike, we have one social media stock on the rise thanks to a new AI advertising announcement

and a major soft bank stock sale is sending a US telecom company lower. We're gonna reveal those names when Closing Bell returns after this. the closing bell the S. and P. down eight tenths of one percent let's get back to Steve Kovach for a look at the key stocks to watch. Steve. Yeah, Mike. Reddit shares, they're climbing after it unveiled a new AI powered advertising tool. It includes a listening tool called Reddit Insights to help marketers identify trends and launch their campaigns. Another

tool called Conversation Summary. Add-ons allow brands to show positive user content under their ads. Shares are up about six and change on that one. Meantime, T-Mobile shares are pulling back on a report that SoftBank sold 21.5 million shares of the company in an unregistered overnight sale. SoftBank raised about $4.8 billion through the sale according to the report. T-Mobile shares, they're down about 4% their worst day since April, Mike. All right, Steve, thank you. Still ahead, the solar stock slide.

Pippa Stevens is breaking down the big move lower in that space today. The bell is back after this break. Welcome back. A quick programming note for you. Don't miss Scott Walker's exclusive interview with Double Line Capital's Jeffrey Gunlock. That's tomorrow right here on Closing Bell after Fed Chair Powell's news conference. We'll be right back. Up next, more of the day's biggest movers as we take you inside the market zone.

Closing Bell will be right back. S&P 500 down three quarters of one percent. We are now in the closing bell market zone. Lennar taking a leg lower from a morning high. Diana Olec has the details. Plus Pippa Stevens on the solar stocks getting hit by the proposed spending bill and vital knowledge as Adam Chrisofulli

breaks down the crucial final moments heading into the close. Diana, I mentioned, you know, when are initially bounced, then it's had this pretty steep reversal. What's happening there? Well, Mike, Lenar's quarterly earnings yesterday were mixed, but guidance was lower than expected.

And the average home price was down nearly 9% from a year ago. Stock is down over 4% on the day. Everything that Chairman Stuart Miller said on the call this morning echoed the Builder's sentiment report we got this morning, namely that it is all about weak consumer demand amid economic uncertainty and weaker affordability. Sentiment in June dropped from May. The Street expected a slight improvement, probably because of some tariff delays and negotiations and a stronger stock market. But again, this shows it's this bigger consumer problem. The index is now so low that the only other time since the great

recession that it's been lower was in April of 2020 when the pandemic shutdown hit and at the end of 2022 after the Fed started raising rates from those record lows. And in fact, 37% of builders in the NHB June survey said they cut prices, which is the highest share since they started tracking this three years ago, up from 34% in May and 29% in April. And the average price reduction was 5%. So all of this talk on that probably hit the stock later in the day. For sure. And in fact, I saw some, saw some, just a chart of all the different builders and their incentives that they're offering

as a percentage of sales. It seemed like Lenar was a bit of an outlier, really being aggressive in trying to, I guess, bring in those buyers. Yeah, but it was interesting because he also noted that even though they're buying down mortgage rates, for a lot of folks now, even at that lower rate, the buy down rate, those buyers, those potential buyers are not qualifying for the loan

so that just speaks to the you know kind of credit scores that they have right now and the debt they may be in. Oh that's interesting yeah so you can't necessarily you know kind of have that have that pie be there for you of credit worthy borrowers thank you Diana Pippa yet another swing in the solar stocks on this legislation. Hey Mike, well, clear energy stocks are getting crushed with the TAN fund tracking for its worst day of the year as the Senate's version of the tax bill would also eliminate or scale back many of the key credits that have been instrumental for the renewable energy industry. Residential solar, the

hardest hit with the lucrative 30% tax credit expiring 180 days after the bill's enactment, which is sending Sun Run cratering here some 40%, Guggenheim calling the move disastrous for the industry. End phase and SolarEdge, which make hardware for Rezi systems also dropping. Now there are a few positive changes. The Senate's bill has a slightly longer lead time for projects to begin construction and still be eligible for the credits And there's also a slower step down, but the credits expire in 2028

Which is four years earlier than what's in the inflation reduction act now ahead of the Senate Finance Committee proposal Investor expectations had been rising that the Senate's version would be more favorable than the house's So clearly Mike a lot of disappointment today across the industry than the house is. So clearly, Mike, a lot of disappointment today across the industry. For sure, and just the magnitude of those moves in the stocks, and you mentioned that, you know, it's characterized as disastrous for the industry.

Are we actually talking about this being an existential issue for some of these companies if, you know, this bill gets through as now planned? I think what's an existential issue here is the uncertainty that the industry has been facing for so long now, really going back to the November election when questions first started to arise about the fate of these credits that have been really key. And so that's what's really kind of stalled progress.

If you don't know how much your system is going to cost, it is really hard to get, you know, the financing that you need to get construction started. And so that is really what the industry needs. It's that clarity, both in terms of the tax credits and then the Inflation Reduction Act. But on some of the subsectors, residential is definitely more vulnerable here. I mean if you don't have a 30% credit and your mom and dad looking to put rooftop panels on, that makes a huge difference. The bigger systems, the utility scale systems that are powering the grid that are key for things like data centers, that's a little

bit more insulated, but until we get some certainty, there's going to be, this industry is on hold. Yeah, scarcity of certainty all over the place. Pippa, thank you very much. As we head into the close, let's bring in Vital Knowledge founder, Adam Chrisafulli.

Adam, great to have you on here. The market has been, in a big picture way, kind of hesitating here for a little while. What's your read on what we're contending with and whether we're refreshing this move higher or it's looking vulnerable? I think it's definitely looking vulnerable. Even before the events in the Middle East,

there are just so much risk on the horizon. And we have valuations that are very elevated. So you don't have a lot of flexibility. There's not a lot of capacity priced into absorb all this uncertainty. So, you know, whether it's tariffs, whether it's fiscal uncertainty, whether it's the debt ceiling,

which I think is gonna become a bigger issue because this bill is probably gonna bump right up into the X date on the debt ceiling. You know, we've had a lot of poor economic growth in the month of May pointing to a downtick in growth momentum. There's just a lot of uncertainty, a lot of red flags on the horizon

and valuations just don't really give you any room for error. Yeah, you mentioned, you know, even before the geopolitical headlines, how do the geopolitical situation, obviously, it basically creates suspense, it creates this wide range of potential outcomes in terms of this conflict. But oil is not necessarily acting particularly alarmed. I mean, we're below Friday's highs in crude prices. What are the key things that you'd be watching to know whether this is going to snowball? I think the biggest takeaway as far as U.S. markets

are concerned is the inability of treasuries to really spike higher, despite all the geopolitical anxiety that we've seen in the last week, coupled with all this economic data that we've seen in the last week, coupled with all this economic data that we've seen. Even today, you had a miss on retail sales, you had a miss on industrial production, you had a miss on the NHB housing survey, and you have this ongoing escalation in geopolitical tensions.

Treasuries rallied a little bit, but the move is not even as large as I think one would have assumed. And that just speaks to some of the upward forces placing pressure on yields, including fiscal imbalances, like I mentioned, there's still a lot of anxiety around the inflationary implications of tariffs. So that to me is kind of the real big notable factor of the last few days. You know, as far as geopolitics, obviously, oil is going to be the transmission mechanism. You know, to the extent this becomes a broader macro problem, like you said, we haven't seen any real supply disruptions in an extremely fluid situation.

But we've been dealing with geopolitical uncertainty, intense uncertainty now, for years, whether it's Ukraine, whether it's other conflicts in the Middle East, even India and Pakistan more recently. And markets have absorbed all that relatively well. And I suspect it's going to be the case again with this latest conflict in Iran. So we have a Fed decision tomorrow. We're going to get the outlook, the dot plot.

You mentioned, and this is important to note, that we are also going to get weekly jobless claims tomorrow because Thursday is a market holiday. What's your level of concern, I guess, about some of the softer labor data? Yeah, I mean, about some of the softer labor data? Yeah, I mean, a lot of the May data has pointed to, again, a down-taking growth momentum. So the jobless claims have been deteriorating,

especially the continuing jobless claims. That's definitely a red flag. We'll have to see if that goes up further tomorrow. It was just circling back quickly to the month of report for May. The headline number on the establishment survey was decent, but there was a lot of weakness meeting the surface, especially in the household survey.

So it really does suggest that there is softness in the labor economy. I definitely think that the Fed has reason to kind of pivot its outlook very modestly in a dovish direction. Just given all the data that we've seen, I think the messaging for the most part tomorrow is going to be a relatively status quo.

They see risks to both sides of the mandate and given that the economy they think is in a relatively decent position, they're gonna kinda just sit on their hands and watch how everything unfolds. You do have the risks on the dots, the 2015 doubt potentially going from two to one. Yeah, and so I guess we'll see if we do get

that dovish pivot whether the market has implicitly been expecting it here Maybe one of the reasons we've been somewhat resilient despite all the pressures Adam thanks so much appreciate the time today about 30 seconds until the close looks like the S&P 500 is gonna go out with a decline of about nine tenths of one percent 59.80 there about 59.70 was the low from last Friday when the markets first reacted to the Iran conflict. The volatility index 21.4, breath decidedly negative but still not a very messy fell off

just yet. That's all for the Coach & Bell, we'll send you into overtime with Morgan & John. Thank you. Thank you. Thank you.