Closing Bell - Closing Bell: 6/3/25

Episode Date: June 3, 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.

All right. Welcome to Closing Bell. I'm Scott Wotner live from Post 9 here at the New York Stock Exchange. This Make or Break Hour begins with stocks on the move, new records within reach. Coming up, we will ask Fundstratz, Tom Lee, what the summer might hold for your money. In the meantime, the scorecard was 60 to go and regulation looks like that. We did start to ramp a little bit midday and we've been pretty solid throughout. Nasdaq leading. I mean, the Russells had a great day, but the NASDAQ's up near 1%. You see the Dow and the S&P. And the S&P, by the way, is only about 3%

away from a new all-time high. NVIDIA is once again the most valuable company by market cap. The chip trade just continues to work again. There is NVIDIA up another 3% today. We're going to have much more on that in just a moment. We'll also tell you how high the bar is tonight for CrowdStrike. It reports an OT. That stock among many hitting a new 52 week high today. Netflix as well, which got yet another positive call today. One firm taking that target to 1,400 bucks a share. That takes us to our talk of the tape. Will it be a summer sizzle for stocks?

We all want to know that. Let's ask Dan Greenhouse, Solace Alternative Asset Management's Chief Strategist with me here at Post 9. You say we can actually get a little more comfortable with how we're thinking about the market. We're 3% away, as I said, on the S&P. Yeah, on the technical side of things, which I know Joe spent some time on on the halftime report, I like the consolidation above the 200-day moving average. The longer that you hold above that level, the better. And the environment, obviously, we've discussed earnings, the economic data has been fine. And so altogether, I think you can certainly be comfortable. I would take issue with some of the enthusiasm in terms of, well, we're going to continue on to new highs and the momentum is in

your... I understand why one would feel that way and certainly I would lean more in that direction than the opposite, but at the same time, and you touched on it again on halftime, in the next two months or so, whatever effects from tariffs are to be seen will be seen. And you think that they still will be seen? Because you have more positive than most.

Sure, but I was positive in the sense that we were selling off 20% down at the lows and I didn't think that was warranted and now my argument was we should be back around where we were, which is where we are. So I think my issue now is how does the market react in a month or two when the data starts to show either in the form of drifting up 0.3, 0.4% CPI or PCE prints or companies talking about raising prices or absorbing it via margins. How does the market react to those headlines? Because right now

there's a sense, oh everything is good, there's been no problem, we've done all these tariffs and there have been no issues and I think those effects were always likely to be and still likely to be sometime in the middle end of the summer. There were issues with the bond market and some suggest that they're going to roar again and maybe louder than the first time. You're smiling as if you don't agree with the people who are suggesting that. Well I think you were talking about this earlier today through the prism of deficits and you were saying that you talked to a lot of people around the street and everyone's

focused on the deficit and the amount of spending that's gonna come. Well it's the it's the debate about why rates are moving higher whether it's related to the deficit or if it's because of stronger than expected economic growth. It's likely a combination of the two but the the issue around the deficit seems to be getting the loudest play right now. Listen it's perfectly fair and reasonable and largely accurate to say it's a little bit of column A, a little of column B.

I think the one thing I wanted to interject into that conversation is you're in the process of transitioning ownership of the treasury market away from long-term stable owners to oversimplify it price-sensitive investors, which means probably term premium's gonna go up or the amount of compensation that I'm gonna demand will rise and that's gonna put upward pressure

on treasuries and I think there's a component in there and it is an ancillary effect of the other issues that we're talking about, but I think that transition, which is gonna go on for many, many years, away from, again, price-sensitive buyers and towards more price sensitive buyers is probably gonna affect the treasury market as well. But to echo the point that was made,

right now I don't think yields are going up predominantly because of increased supply. Because again, if money was coming out of the treasury market per se, you'd see it going into some other comp across the world, the Bund market or the OAT market or JGB, you don't see that. And so I think right now it's

really just a story of increased compensation demanded. I mean, there is definitely concern about the deficit seemingly from Elon Musk. Now, I wonder if you saw the post on his ex platform earlier, because for a moment the market did take a little bit of a hit. Eamon Javers is at the White House with Moore because this is a really interesting development, the timing of which and the bigger picture of such. But tell me more about what we saw here. Yeah, there's a lot of ways to go with this, Scott. I can tell you that I talked to one White House official who said, look, it's not ideal

to have the world's richest man and a political ally of the president out there tweeting this. Here's what Elon Musk said on X, his own social media platform, during Caroline Levitt, the White House press secretary's briefing, he posted, I'm sorry, but I just can't take it anymore, stand it anymore. This massive, outrageous, pork-filled congressional spending bill is a disgusting abomination. Shame on those who voted for it. You know you did wrong. You know it. He goes on to say it will massively increase the already gigantic budget deficit to 2.5 trillion dollars and burdened American citizens with crushingly unsustainable debt. I can tell you Scott this has been setting off

political shockwaves on both ends of pennsylvania avenue as lawmakers up on capitol hill are reacting to it as well and seems to be entrenching those republicans who were inclined to not support the president's bill here caroline levitt the white house press secretary was asked about the uh... social media post even as she was briefing this popped up on the Musk's feed and here's what she said. Look the president already knows where Elon Musk stood on this bill it doesn't change the president's opinion this is one big beautiful bill and he's sticking to it. So they're trying to shrug it off here at the White House Scott but clearly Elon Musk has political aspirations and political impact, potentially long beyond this administration.

So the question here is, lawmakers on Capitol Hill, how many of them will be sort of magnetically attracted to Donald Trump and how many of them will be more magnetically attracted to Elon Musk? That's an open question as of right now. The impact of these tweets, we just don't know, on the big, beautiful bill, as the White House calls it. We take this, though, I would think,

as undoubtedly a shot of sorts at the White House. Absolutely. From Elon Musk. Not of sorts, just a shot. Yeah. That's fair. I'm glad you said that. I mean, the CBO obviously agrees and says it will add to the deficit.

The OMB and Russell Vaught has been on television in the last, you know, handful of days arguing on the Caroline Levitt and White House side of things. But as you say, this is a shot and maybe the biggest one yet from Elon Musk, certainly at the White House about any level of policy. Yeah, absolutely. And the timing of it, Scott, coming, you know, while Caroline Levitt was briefing, so she had to react to it live, coming just about a week after Elon Musk left

the White House. He was at the president's side. The president brought him into the Oval Office to praise him and send him off in glory from his Doge mission, which the White House says he accomplished here in terms of cutting spending. I mean, this is one of the president's closest political allies who spent the night many times in the Trump residence during this second term. Somebody who's been at the president's

side in Mar-a-Lago and elsewhere again and again and again now coming out against the president's signature legislative initiative of the year. You know, it's devastating politically. I can imagine there's going to be a personal response. We're in the middle of an unusual 48-hour period here at the White House where we haven't seen the president with any public events yesterday or today. He's been active on social media. We haven't seen him on camera. So we haven't had an opportunity to ask him about a lot of these things.

You can imagine there will be some reaction coming from President Trump here as well as they formulate how to respond to this and how to persuade Republicans on Capitol Hill to stick with him. You don't obviously cover the Musk side of this as closely as some others do. It's more of the political angling. However, you do have to wonder, Eamon, and I'm sure you are, as to whether this is the beginning and maybe the very earliest stages of a Musk image rehabilitation tour

and whether it's going to be in any way successful if he thinks that taking the opposite position of the White House in such a public way is going to help him fix some of the brand damage he's done to his companies. I mean if you think about you know who buys Tesla's right it's largely you know upscale voters in blue states who are concerned about the environment or that's what it has been here to for and Elon Musk did an enormous amount of damage with that demographic group who they generally by and large don't like Trump by and large don't like what Elon Musk did to federal agencies USAID and the like as head of Doge. And you I think you saw that rehabilitation tour begin a little bit in his sit down with our David Faber on CNBC where Musk was now back at a factory, you know, being interviewed in front of Teslas, not in the Oval Office with his Make America Great Again hat or waving

his chainsaw in the air, resetting himself as the sort of visionary of technology and future transportation, whether that's in space or on the ground, and reintroducing that persona back to the American public, which had seen him as sort of nothing but a Trump acolyte over the past six months. Now trying to reground that image around Tesla and around SpaceX. I think that effort continues, but there's more going on here because we saw this pullback of Jared Isaacsman. Isaacman, as the president's pick to head NASA, that was seen as somebody very, very

close to Elon Musk. That got yanked suddenly over the past couple of days. So there's more of a split here between Elon and the president than just Elon wanting to get back to Tesla and get back to business. Yeah, these are really interesting developments. I'm sure you'll be watching Truth Social for anything that might come from the president here forward. Eamon, thanks so much for that. That's E anything that might come from the president here forward. Eamon, thanks so much for that. That's Eamon Javers on the North Lawn.

I'll go back to Dan Greenhouse here. Only in the context of if this in any way jeopardizes the future of what they consider to be this big, beautiful bill, and investors consider it a conduit to higher stock prices down the road. We have a problem with that? Well listen, the margin in the House and the Senate is very thin right now. And I think to the extent Elon has any political clout whatsoever, obviously coming out so publicly in the Chip Roy camp, if you will, is not great in terms of the passage of the bill. But I also think the Senate in particular, which is now taking up the House bill and

going to make some changes to it, deals with different political issues than Elon's making it out to be. But I will say, Elon is not the first to voice the idea that what is the point of electing Republicans running on fiscal responsibility, et cetera, et cetera, if you can't cut any spending. Now, mind you, for the public out cetera, if you can't cut any spending. Now, mind you, for the public out there, a lot of the spending that people are talking about cannot be done in this bill. It must be done in a separate bill.

But that's not to say that you can't cut any spending in this bill. And there is a camp that thinks that you haven't done enough. Elon is giving rise to that. His voice may be the most important one at this point. Certainly. Just given the money that he has. Now, he's also said that he's sort of done contributing to politics. So you take all of these things in stages, but I'll just go back to the original question.

I'm not sure you addressed it directly. If there's an issue with the passing of this bill, is it a problem for the stock market? Yes, but I don't think this means there's an issue for passing the bill. I think it certainly puts some pressure on some lawmakers. I mean, you've already got Thomas Massie, Chip Roy, Ron Johnson, that camp already thinks there's too much pork,

if you will, to oversimplify it here. But yes, to answer your question directly, since you did not let me get away with it the first time, yes, if you don't pass this bill, taxes go up. That's a problem. All right. A lot of things are going up today, including, I mentioned at the very top of the program,

NVIDIA is going up. The chips have been going up a lot lately. Christina Parts-Nevoulos has been watching that for us. It's really been a resurgence for these names. Yeah, and a lot of it had to really, it started again with NVIDIA's latest earnings report, reviving the AI theme. names. That's incredible, 80% for a tech company. And so that's why you're seeing shares almost 3% higher. I wanna move on to AMD because there's some news coming this afternoon.

The CFO spoke with the Bank of America tech conference. The stock is up almost 2% going forward into next year and beyond. They're confident, this according to the CFO, about continued gross margin expansion as well, despite the quote awful data center GPU side, which is slightly dilutive or dilutive to gross margins. So that's a quote from them I want to move on to on semi too because that stock is up about 8% right now

No, even almost 10% this to coming from managers speaking at the Bank of America conference There's reiterating their prior guidance for q2 indicating signs of recovery not only in analog But they're seeing strength in their AI business. So really this turnaround in the cyclical parts of the business which is helping all of chips as a whole. And then speaking of all of chips another big name which is the custom chip maker Broadcom actually hit a all-time high earlier today. You can see it trading almost three percent higher. So really a lot of movement even Qualcomm will throw it into the mix got a bullish note from a lot of movement, even Qualcomm will throw it into the mix, got a bullish note from, just earlier today from Wedbush. So a lot of bullish commentary turning around

for many of these chips, Scott. All right, Christina, thank you for that. Christina Parts-Nevulos. Now let's bring in CNBC contributor, Capital Area Planning Groups, Malcolm Ethridge. Dan Greenhouse, of course, is still with us. Malcolm, it's good to see you. This really underscores what's been happening in tech.

It's semis, it's software, it's the mega caps, even IBM, some of the so-called old tech. This trade just continues to work and it doesn't seem to want to let up. Well, I think that Dan was making a really good point about the fact that we won't really know the impact of tariffs until we get Q2 earnings and that's where we'll really find out what the impact was. And I think what we're seeing is a rotation from investors away from anything that is sensitive to those tariffs just in case into things like software that tend to be a little bit more defensive against whatever the tariff rate we ultimately settle on with our different

trading partners is. So I definitely think that right now it's a decent rotation. We'll see if it has staying power and if investors decide that this is the place they want to be long term though. You believe in this tech trade continuing the way it has? Yeah, again, I mean, I just, the point I keep making as a non-exclusive tech investor is show me the evidence that something's slowing down. You had DeepSeek, which was a worry for like a minute and a half. That's done nothing.

The idea was we're gonna need less power. That hasn't happened. CapEx expenditures are still as high as they've ever been. And the big Meta Constellation deal today showing the power play angle here. Yeah, I mean, this is a multi-year story for nuclear and for AI demand. And again, if you think that you don't need as much power,

you're not striking a deal to restart Three Mile Island, let alone the Constellation deal today. I know, but if you said that you think that we could be more comfortable, I think was the word you used, because, well, in part, technically, if you think we're going to new highs and then potentially beyond,

is tech the thing gonna carry you there? Are we gonna get another big, broad move in the market to represent that? Well, tech's probably gonna carry you there? Are we going to get another big, broad move in the market to represent that? Well, tech's probably going to carry you there, just mathematically they're so big. And of course, as everybody knows, their earnings growth dwarfs the rest of the market,

et cetera, et cetera. But let's not pretend that it's only tech. I mean, you've got industrials like RTX, both GEs are basically at highs. Visa and MasterCard, basically at highs. The insurance companies, basically at highs. I and MasterCard basically at highs. The insurance companies basically at highs. I mean, there's a long list of companies that are not tech that are doing phenomenally well in this market.

And again, the market's up, the S&P 500 is up called 1% for the year. Roughly 50% of stocks are up more than that. Roughly 50% of stocks are, I guess, down. That's what you would expect to see in a normal market. So I don't think that- I know, but this has been such an unexpectedly abnormal year thus far.

That's fair, but- For how we came in. If I told you we were gonna, if I showed you the year-to-date chart, I was gonna say, well, here's what happened here, and then here's what happened there, and so forth and so on, and you said, well, I probably didn't see that coming. Yeah no I don't think many people saw it coming

but my point is just where we are you've got a good number of stocks trading above the 200-day moving average called 50% 75% trading above the 50-day moving average I mean there's something going my only point again you're not arguing with what you're saying my point is just there are things going on in the market look at booking that are not technology related. No, I get it. I mean, things like, look, like CrowdStrike, for example, and some of the cyber names have been working.

They don't have to be MegaCap related. No, ServiceNow, Cyber Ork. But Malcolm, CrowdStrike reports in overtime tonight. We're showing the chart here, two months, 41%. I said at the very top of the program, I could pull 20 names out of my hat that are well known that are seemingly hitting 52 week highs again today. This is one of them, but that in there increases

the pressure going into the number. Yeah, I think it does increase the pressure on the company, but I also feel pretty confident in their ability to actually impress investors listening to the call. I would not be looking to sell shares here ahead of the print. I think that realistically, this is their first time reporting since last year's outage and the hangover of the CCP plan to make it up to their core customers who are impacted by that outage. So I think that everything is setting up for them

to really wow the street, especially as far as the target toward their 10%, I mean, start at $10 billion of ARR that they're targeting, that they've been talking about. This will really be their first opportunity since then to focus the conversation solely there. And I think investors will be glad that they stayed. Steve Kovacac what do you think we need to focus on the most as we look ahead to this? Yeah I mean you guys really said there's just so much positivity in CrowdStrike up about 40 just 42 percent year-to-date most of

that in the last two months 10% over the last month alone look big come back since that outage last summer and as for expectations of this report Scott what to look for? Strong revenue growth expectations are up 20% for revenue, though slowing down a little bit compared to the year ago quarter. The next important metric is that annual recurring revenue that Malcolm was just talking about. We're expecting that to be up 21%. And a potential surprise item that folks at Street Account were talking about to watch

in this report drops in federal government contracts from doge cuts and demand amid all the economic uncertainty from tariffs. Some potential headwinds there for them, Scott. Yeah, which I mean, the street has been concerned about that Malcolm in the past. Steve Kovac, thank you very much for that. Right, I mean, these have been issues

that have been mentioned in the past, a slowdown in government past. Steve Kovac, thank you very much for that. I mean, these have been issues that have been mentioned in the past, the slowdown in government spend. Yeah, but I think in CrowdStrike's case, the thing that investors really will care about is the fact that they don't have those support payments to those core customers to make it up to them hanging over them anymore, which was really a drag on margins the last couple of quarters that they reported. So they're telling us something like a 97% growth customer retention rate which has to make its way into this earnings print and I think we should also consider the

fact that they've even decided to jettison the five core modules or more metric from their land and expand plan that they were reporting on because the average new customer is showing up requesting five or more modules as they sign contracts, which has to speak well about the growth of their customers going forward. So existing customer base, maybe not as strong as it was a couple of years ago, but new customer base, new signups, I think is a really good testament to how that growth is really showing up. Plus you throw in the fact that they are talking about improvements to margins from AI, and they're feeling so confident that they just executed a 5% reduction in force

because AI is able to do so much more. I think all of those things taken together start to spell a really great growth story for the name. So I understand the analysts who have shown that they're starting to get a little bit hesitant because the valuation has shown itself so stretched. But I also think there's tremendous opportunity for the company to grow into that valuation going forward. How do you look at stocks like this?

Momentum by the way is another area of the market that's been hitting the new high. The M-T-U-M-E-T-F. That's right. Listen, I'll leave the specifics of CrowdStrike to Malcolm. I'll just pivot off a point on the federal contracts. Throw up a chart of Booz Allen Hamilton, which is B-A-H, boy apple Henry. There is probably no greater illustration

of what's happened here with respect to Doge and government contracts than Booz Allen. This is something every company and every analyst has to be aware of because whether we have seen thus far and we have not, the Doge cuts or the Doge attitude, if you will, be codified into law that's probably I mentioned earlier you can't do a lot of this in the reconciliation bill but you can do it on the back end and I think somewhere in the next couple of months whenever they do get this bill

passed in whatever form in which it is passed these types of cuts are gonna get formalized into law certainly to a greater degree than is currently the case. You have a thought on the Knicks firing Tom Thimidou? I have many thoughts on the Knicks firing Tom Thimidou. I know you do as well, but I, listen, I think... I knew you didn't expect that one. We don't need your opinion. Tough end to the year. I was just curious.

Malcolm, we'll spare the audience. We'll talk to you soon. Malcolm Ethridge, Dan Greenhouse, Tom Thimidou. I mean, they talk golf all morning on Squawk Box. We can certainly talk the Knicks for one second. Well you couldn't even spit out your opinion. I'm a destroyed individual. Like many Knick fans are at this moment as they're just finding out this news.

It's true. We're just getting started. Up next, top strategist Ryan Dietrich is back with us. We'll find out why he says we're in a Rocky Balboa market. He joins us next. After the strongest month in a couple of years, is there enough momentum to keep stocks climbing? Our next guest says there is. Ryan Dietrich, chief market strategist with the Carson Group, joins us now.

I know you're trying to be clever, the Rocky Balboa market. What's that? You can knock them down, you can't keep them down, can't keep the market down. What's up with that? Yeah, that's right, Scott. Good afternoon and thanks for having me back so you know I was taking a look this year so far we have a down day on the

S&P 500 what happens the next day so you get knocked down what happens. Scott I know the number doesn't sound that impressive 0.22 percent okay that's the average return the next day after down day that is one of the strongest we've ever seen you're talking 2003 2009 and, and 2020,

where other years when you have a down day, what happens the next day? That's just, I think, a neat little stat that really shows what we kind of know. This market does not want to go down. I've been coming on for a while saying, listen, lows were in. We were saying that back in April.

It sounded crazy then. Now it's looking more like it. But I think it's really important to know this market doesn't want to go down, kind of like Rocky. That's the yo Adrian effect. There you go. I guess what you're showing us. Are we going to new highs, and sooner than people might have thought?

Yeah, we think so. I mean, honest to goodness, it's not that far away as we sit here and talk right now, but the reality again is look around the globe. I know you've had a lot of guests talk about these things. Just about, most countries are hitting 52 week highs or all time highs, like as we're talking right now. US is probably gonna play catch up.

One other thing that's really important, those advanced decline lines, right? How many stocks going up versus down? This is a broad based participation. We have those new highs and advanced decline lines recently. That to us again suggests, you know, June, they called it the June swoon. When you have a strong May like we just did obviously

June tends to do pretty well in fact the summer months which are normally pretty strong actually these next three months are usually pretty good They get even better when you have a big May so we think new highs are coming probably this summer here I'm looking at all of the notes that you gave to the producer of this segment, and I don't see a single risk in here Like are you not thinking of any? possible issues with your thesis? Yeah, you know, I heard Tom Lee's after me, so the fact you have Tom and I back to back, that could be a risk by itself,

that it's getting a little too bullish. But, you know, there's always something to think about. No, you know what, I know you joke about that, I know you joke about that, but some are literally gonna think that. It's like, well, Dietrich's got no risks, Tom Lee's always bullish, I need to fade that, that because this is just ridiculous because I got a trade war Now I've got Musk hating on the big beautiful alleged bill and maybe it's not a foregone conclusion

I don't know, but I don't see any risks being talked about by many No, you're right. And well, listen so we can talk those risks are well known, right? What are we doing with the money that we run for our Carson partners? I mean, we've got a lot of international exposure, right? We've got a lot of European exposure, probably more than just about any other RA out there. We've had a little bit of gold. We are underweight bonds, yes. But I know I like momentum.

You talked about momentum for a minute there in the segment before me. We like momentum, but I gotta say, we got a barbell approach. We got momentum, but we also have low vol. We did that pair trade after the election way back in November. So are we over with equities? Yes, we've been there all year. Not as overweight as I was a year ago

when I was coming on with you though. But again, there's always some risks, but again, to make it cliche, the biggest risk could be this bull market keeps going and investors get lost and unfortunately miss it is kind of the biggest risk. We both know there are always risks. investors get lost and unfortunately miss it is kind of the biggest risk. We both know there are always risks and the risks are known because they're legit.

Are they not? I mean, we still have tariffs. We may get down to a position where we have 10 percent tariffs across the board. Those still matter. The economy is slowing. I don't think there's any debating that. The degree to which I think is legitimately at issue. But what about that?

I mean, rates are still reasonably high. The bond market threw a tantrum once already. None of that matters? No, it matters. You know, the one that gets us, I wouldn't say keeps us up at night, but thinking about the market's price against still two rate cuts this year. I work with a very smart guy named Sonu Varghese, looks at all this data. Sonu's saying, you know, they might not cut this year.

And again, could that kind of upset the Apple car? Could that potentially really kind of bring back stocks and potentially bonds as well? I mean, tell me there's a chance. There's a chance there. So that's something that we are actively watching. But at the same time, I mean, that's a's a chance. There's a chance there. So that's something that we are actively watching. But at the same time, I mean, that's a piece flat on the year. I know what we just did, a major slingshot. So after a gain of 70% the previous two years, back to back 20 percenters, was it really

shocking to us to have a weak first quarter? We said no. We did not see a bear market. No, we didn't see a bear market this year. But we sat down 12 to 15%. Made a lot of sense at some point. Obviously, isn't it crazy? Two months ago this second was Liberation Day and all that craziness. But nonetheless, we've come back and we still think it will be a little bit overweight equities here with the global

diversified portfolio, Scott. All right. It's good to get your perspective. And I appreciate your time, Ryan. Thanks. We'll see you soon. Ryan Dietrich. Appreciate it. Up next, the out for mention Tom Lee, a fun strat. He'll tell us why he's forecasting a melt up rally and he'll tell us the parts of the market he's betting on next. Welcome back. Get ready for a melt up rally. That is what our next guest is calling for in the months ahead. He is Tom Lee. He is Fundstrat's co-founder and the head of research, also a CNBC contributor. And as you see, he's here at Post 9. Nice to have you. Great to see you Scott. Just saw Dietrich on. He's, he's bullish. And you are too, but you say too many people are not. Yeah. I would,

you'd think that with the S&P doing well this week and a great May, investors are bullish. They are not. You know, in our calls and Zooms with portfolio managers, many are still cautious because they see tariff risks ahead and they don't have tariff resolution in hand and they can't get bullish. I think the feedback we get from a lot of folks is they think stocks shouldn't be rising. So I would say given the amount of cash on the sidelines, the fact that short interest

is going up and we have a quiet week and markets are rallying, I think the risk is now of a substantial leg up rally from here. What role do tariffs play in all of the way you're thinking about the market? Well tariffs matter. Remember before February, before Trump sort of talked about this, the base case for many was a 15% tariff. Let's say that we're going to end up at a 10%. That's 10% on 15%, which is imports, which is about a 1% GDP effect.

That's not that different than oil going from 40 to 80. And we wouldn't say $80 oil breaks the economy anymore. So I think tariffs aren't, we have to adjust to it, but it's not the thing that takes us to 4,000 S&P anymore. Now what if there's a renewed and more protracted if not dug in fight over the tax bill. What if Musk's post on social media earlier is enough to get some lawmakers in a very thin margin Washington to rethink their positions based on his political donations

or lack of support in the future? Is that a real concern in any way? Well, this is what's gonna be set up as what I call event risk. And it's an event risk similar to a government shutdown or an auto plant shutdown, something that affects the economy for a specific period of time. But again, those have not been things to turn structurally bearish. They may be tactical risks, but again, they've always been by the dip opportunities. So if for argument's sake, the tax bill ends up

not as big as the price tag is on it now, would that be a positive taken by the market? Maybe the bond market would feel pretty good about that, wouldn't it? Yeah, I mean, Scott, it's kind of hard to say because I can see it being if bonds rally, that's good for equities, but if this tax bill leads to more spending,

even if yields rise, markets are gonna focus on the earnings effect. So I'm just gonna say it could go either way. I mean, it could be better, could be good. When you hear Jamie Dimon talk about there will be cracks in the bond market, do you just brush that off as that, oh, you know, I would expect someone in Jamie's position

to be talking about the risks that are in the system, or do you know, I would expect someone in Jamie's position to be talking about the risks that are in the system, or do you sit back and say, well, maybe that first little scream from the bond market was before there's a full-on tantrum, which wouldn't be good for equities in any way? Well, JPMorgan has a dashboard to the U.S. economy, because they see consumer credit, they see it real-time. We know consumer credit delinquencies are rising and auto loan delinquencies are rising,

but is that going to spill over into the broader credit market to create a credit event? The one market we watch is high yield. High yield spreads have actually managed to hold on to most of the rally gains and they've retraced 70% of the widening. That's a market that says the economy actually is starting to strengthen.

So you don't put that much cred into bigger worries about the bond market having an issue anytime soon. And even for accuracy's sake, I mean, it's not like he said we're gonna have this issue tomorrow. I don't know if it's six weeks, six months, six years, I'm paraphrasing but that's generally what he said. Yeah, I mean I think Jamie's flagging that there are parts of the economy

that are weak including housing. I mean housing is deteriorating very quickly but that's also going to deliver a pretty big deflationary pulse. That was 75% of the rise in inflation since 2019 is housing and auto services. So if housing is turning down on price because there's supply, I would argue that's a structural decline in inflation. The Fed would actually have to be quite dovish in the next 12 months. That's bullish. How many times is a Fed hike between now and the end of the year?

Well I think you mean cut. I mean I meant cut. Sorry. I hope that wasn't a Freudian slip. Cut, cut, cut. Yes. They may not do any cuts between now and the end of the year. And that'd be fine?

Yeah, I think the stock market now that we're in June is starting to look at 2026. And I think the Fed's gonna be, they're in a position to do cuts next year. That's what's gonna be bullish for equity. Lastly, still ride this tech run? Yes, I think the MAG-7 were the first to peak, the first to bottom.

They were the washed out stocks that didn't make me lows in April. So we like the MAG-7, but we also like this financials, industrials, and small caps for the second half. Tom, Tom, why do you keep doing this to yourself? Last year, you said you like small caps for the second half. Tom, Tom, why do you keep doing this to yourself? Last year, you said you like small caps for the second half.

You said they were gonna go up 50% in the second half or something like that, didn't you? Yeah. Why do you keep doing this to yourself? Well, you know, the small caps have gotten hurt because the Fed has been on hold. It's been a hawkish pause, but I don't think the Fed's next move

is to start raising rates. So yeah, I know it's been not hawkish pause, but I don't think the Fed's next move is to start raising rates. So yeah, I know it's been not a great call, but I think small caps are still a second half story. All right. We'll leave it there. Thank you. We'll keep checking back with Tom Lee. Up next, we track the biggest movers into this close.

Christina Parts-Onevalos is standing by with that. Tell us what you see. Well, I see one tech connectivity company skyrocketing 15% on blowout earnings, while a social media platform jumping on a major Wall Street upgrade. We'll have the full market roundup when we return after this short break. About 15 from the bell back to Christina now for the stocks that she is watching. What do you see?

Credo Technology. It's a company that we often don't talk about, but that name is Soaring. This is a high-speed connectivity product developer and it posted better than expected results. Revenue climbed about 180% from the year prior, mid-strong demand, specifically from hyperscalers. You can see shares up almost 15%. They've been on a huge run just over the past year up, look at that, past year, 184%. Switching gears, Pinterest shares also in the green on an upgrade to Overwave from Neutral at JP Morgan.

Analysts over there are saying they're pleased with monthly active user growth and they see a buying opportunity right now with Pinterest. Shares about 18% off its fully, I should say 52 week highs and that's why you're seeing them stock up almost 4 percent. So they like that name. Scott. Thank you.

Christina parts of Nebula still ahead. Dollar General jumping in today's session. We'll tell you what's driving that move and what it could signal about the state of the consumer. We'll come back. We're now the closing bell market zone. CNBC senior markets commentator Mike Santoli is here to break down these crucial moments of the trading day plus Courtney Reagan on the rally in dollar store stocks and Christina Partanavoulos is back looking ahead to an

earnings report from HPE which is in OT. Mike you first pretty decent day pretty day. Most sectors are up. Yes. So really after two weeks or so of completely painless pullback, cooling off of this market, we kind of got back in gear. And I think today, if you were to look for individual accelerants, it came from two areas that historically the market's been a little bit twitchy about, which would be AI sustainability, conference stuff all over the place, Taiwan Semi, a lot of smaller names, just reasserting their optimism about that. The stocks are absolutely flying because of it.

And then consumer, you know, whether it's Dollar General or just the other companies that seem to say we're in decent shape and nothing has changed, the Joltz number was fine. So, it's kind of a no news is good news when it comes to deviations in the macro data. That said, we did try to make a run at 6,000, didn't quite get there.

It feels like, I don't know if you want to see CoreWeave going up 24% today. I don't know if you want that thing going absolutely loose to the upside, if you feel as if the silly stuff is starting to come back into play, but maybe that's not today's business. All right, Cora, what about the dollar stores?

Mike just mentioned what's happening with one of them. Yeah, I mean, Dollar General, as Mike suggested, putting up a much stronger than expected earnings report and better sales too for its first quarter. Traffic was down, to be fair, but it's improving, and the comparable sales also coming in stronger than expected. Now, the discount retailer did increase the low end of its previous guidance for earnings, revenue, and comps,

but it's also been really careful with its wording to note that it's largely reflecting the stronger quarter that it just reported, this guidance upgrade, and it notes it is still accounting for a lot of uncertainty around tariffs and the impact on consumer behavior. And while Dollar General says it hopes to mitigate, quote, a significant portion of the impact of cost of tariffs, it's concerned that its consumer will be pressured from price increases elsewhere in their purchasing decisions. Now, analysts do have some higher expectations for Dollar Tree's comparable sales growth than Dollar General.

When it reports tomorrow, they are thinking comps could grow almost 4%. Family Dollar Comparable sales, though, those still largely lagging dollar trees comps when you divide the divisions. Truist and Wells Fargo did also up price targets on DLTR yesterday, so before Dollar General's report. Becca, for you. All right, Court, thank you very much. Christina Partzanevalos, HPEATB.

Do you see what I did there? Yes, I see what you did there. Thank you very much, Christina Parts and Nevalos. HPE ATB. You see what I did there? Yes, I see what you did there. HPE shares. Don't put anything past me. No, no, wow. HPE shares up today, but I have to point out that they are actually trailing the broader market performance

with a 17% year-to-date decline, underperforming both the NASDAQ and the S&P 500. The enterprise technology firm is capitalizing on AI infrastructure demand, but there have been a few headwinds. You got ongoing cost challenges, regulatory scrutiny surrounding its $14 billion Juniper Networks acquisition, which should be on track for a 2025 completion. And then adding to that complexity, Scott, activist investor Elliott Management

took a substantial $1.5 billion position recently, which really could signal maybe further cost cuts. The key focus areas for today's earnings, ATB include margin compression, which we saw last quarter, so maybe any improvements there, AI business momentum, GreenLake Cloud Service growth trajectory, and management commentary on that cost reduction initiative

and any Jupiter integration progress. All of these factors likely to really drive the stock at ATV. Gosh, I'm trying to throw in those acronyms there. Back over to you. Yeah, Christina, thank you. BRB. All right, there you go. Christina Partsenevalos, thank you.

Stocks like CrowdStrike come to mind today. Netflix. There are so many different ones that are on these new high runs. What do you make of all of that? Netflix, nothing seems to get in the way of that thing. No, and leaders continue to lead. So you do have this phase where the momentum ETF made a new high when the broad market has not. So the stocks that have kind of exhibited,

have come out of this period as sort of the consensus. They have it figured out. They're usually sector leaders in their business. They're gonna work until they don't. I know that sounds ridiculous, but what I do find fascinating is some of the talk, and I was talking about this yesterday, today this sell-side call from Truist about Alphabet,

and now, hey, you know what? Waymo inside of Alphabet, Tesla's being given hundreds of billion dollars in credit, market cap wise, for their business, which isn't even as close to it. Well, I think you could say something similar with YouTube inside of Alphabet. Netflix, it's a very similar revenue story.

Maybe it's not as favorable in earnings split, obviously, for Alphabet as it is for Netflix. My point is, the market doesn't want the sum of the parts. The market wants the pure stuff. And Netflix is the purest, cleanest play on this entire huge shift toward, you know, obviously streaming internet TV. So, I think that's indicative of where we are right now.

Nobody wants to kind of make the counter trend play. Breth, I think in general, has been okay today, but it's not been indiscriminately, you know, everything going up. Things like industrials and defense stocks that have been winners have kind of caught a bit still or maintain their bid. You know, I think that's the way the market is kind of adapts to when big investors still need to ramp exposure higher. How do they do it? You buy winners, you buy the consensus names, you buy the ones that you don't get fired for owning. So that's

the phase we're in right now. I don't agree explicitly with Tom Lee saying that people hate this market. They don't hate this market. They don't feel like they do. They're afraid to be left behind. They found themselves underexposed to it near the lows and didn't believe the first rally phase and are still apprehensive because of policy risk. So I still do think there's room for big money to get more aggressive in here and to true up their exposures. But it's not as if we're that far from the moment where people feel like, you know, the tank is full and things have to go right from here and not just be less bad for us to continue to the outside. All right, good stuff. Have a good day. I'll see you tomorrow.

That's Mike Santoli. Bell rings less positive and pretty good. Have to say, we'll go out right near the highs of the day. The S&P 59.71, that is about two-thirds of what it says. I'll see you tomorrow.