Closing Bell - Closing Bell: 7/6/26

Episode Date: July 6, 2026

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, Melissa Lee and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

All right, guys, thanks so much. Welcome to closing bell. I'm Scott Wobner live from Post 9 here at the New York Stock Exchange. This maker breakout begins with this record run for stocks. The Dow topping 53,000 first time ever today, and it is currently above that level. Let's get right to the scorecard with 60 to go in regulation. Nasdaq is the big winner today, as you see, tech and the momentum trade roaring back to life today. Chips are surging. We're going to discuss whether it is more than just a bounce coming up. Elsewhere, Microsoft cutting. more than 6,000 jobs. That stock is on the move lower. Terrell Wolf is surging on a data center deal with Anthropic. About 5% is that name, and Oracle is trying to snap a big losing streak. We'll watch it right to the close to see if hack, in fact, it can do that. It is now up about 2.5%. Let's get right, though, do our talk of the tape. This rebound in momentum stocks, a once high-flying trade that's been especially bumpy lately. We start things off with our Dom Chu, who has more on where we've been and where we might go from here. All right. So, Scott, if you take a look at one of the big ETFs that tracks that momentum trade as the primary factor for portfolio construction, you can see the dominance of one sector in particular.

And of course, this is about the I shares MSCII factory ETF, the ticker MTF, the ticker MTF. It's got 27 billion in assets. Its biggest weighting by far is the technology part of the portfolio. It's 50 percent, half of the entire portfolio. A distant second place is industrials at 16%. And then the energy trade right now at around 7%. That rounds out the top three. Now, over the past few years, it's been a story dominated by momentum and tech, of course, in particular.

The momentum ETF has handily outperformed its value counterpart. But if you look at just the past one year period, that story has shifted fairly dramatically to where the value part has started outperforming momentum, 68% for the value ETF, 34% for the momentum ETF in just the last year. Some of the biggest weightings in many momentum ETFs include chip stocks, AI stocks like Micron, advanced microdevices, Intel, Broadcom, even Caterpillar has been in AI play. That narrative shift is going to be getting a lot more attention amongst traders for the back half of the year. We've got commentary lately from the Goldman Sachs trading desk. It's looking at the past success of buying the dip in momentum stocks. Meanwhile, market technicians,

some of them, like Fairlead Strategies and C.E. CBS contributor, Katie Stockton, are noting how the low volatility stocks are now assuming more of a leadership role. So this kind of tug of war could be that big part of the market story, Scott, in the back half of the year. The debate rages on. I'll send things back over to you. That's a great look for us, Dom. Thanks so much for that. That's Dom Chu. Now to our panel. Humelis is Brian Belski, Requisite Capitals, Bryn-Talkington, Capital Area Planning's Malcolm Etheridge. Brin and Malcolm are CNBC contributors. Good to have everybody with us. Brian, you feel like you have a good handle on what the makeup of this market is because it's been changing a bit.

And I'm not sure people fully believe in this momentum bounce, at least on this day. I think when you look at Micron, Intel, AMD, DRAM, the ETF, they are firmly, they just hit the 10-day moving average on Friday. And they're bouncing right off of that. And so while the MTF, which Dom did a great job, has some other things like energy that don't have really anything to do with the, I'll say the AI trade. Those pure memory names, those pure AI names are bouncing right off of that 10-day moving average, which tells me that buy the dip, the technicals. We got a little bit of a breather. The market's broadening out. But I don't think this is the beginning of the end of this specific momentum trade within these DRAM memory names at this point.

point. Malcolm, this is a good looking market. I mean, there's, you know, there's, there's not much to hate on if you look at what's happening today. I said Dow above 53K, first time ever. You got technology back with the NASDAQ. The Russell continues to perform well. Edgard Denny says S&P can go up another 10% this year. 8250 is his target. Oppenheimer says you can go to 8100. They're standing by that. That makes sense to you? It doesn't. It doesn't. I think in the near term, as we talk about turning the corner into Q2 earnings. And I think to the point Bryn just made, really what we're seeing this bounceback that we're seeing is a lot of investors that realize they got off sides a little bit getting out of those semi-names ahead of Q2 earnings because earnings expectations are something

like 23% above the last earnings period, which was already a bang-up quarter double-digit growth that time. But half of it, more than the lion's share of it, is coming from the semianames and probably only three or four seminames. So near-term, I think it's probably a great-term. I think it's probably a great trade that's going to pay off for a number of people, especially those that have piled into the socks all over again, because I think that's up like 80% or something in the last three months, let alone what it's doing today. So it'll be a great trade until the earnings period comes and we get the actual news.

So the rumor's been great. The news will change things. But I think realistically going forward the second half of the year is probably going to be more challenged because the hyperscalers, if all they do is reaffirm their spending targets, We could see them get punished the same way their Broadcom did last month when all they did was reaffirm their earnings revenue targets that they expected. And the market punished them for that, not increasing it the way that they thought they should be. Well, maybe, I mean, it's certainly better than decreasing it. I don't think the market would be happy to see that.

Brian, what do you think here? You know, we're going to have, I mean, the Ed Yardini target is based on what he calls fabulous earnings momentum, FEMA, not FOMO. And if you look at the scorecard really of where expectations are, man, there's a lot to live up to. I get it, but they're going to be robust. 24.4% earnings growth expected overall for the S&P 500, 65 and a half percent of that coming simply from technology. Well, that's exactly right. And Ed's got it right. You know, the market's probably going to close well above 8,000.

You've got to continue to ride your winners. I learned that a long time ago. Don't try to outsmart the market. I think where people have to be at least leery of post second quarter earnings is this whole second derivative, less positive for third and fourth quarter, Scott. Are we going to be able to put up 65 or 70% earnings for the third quarter? I think it might be tougher, especially given the fact people forget that from a seasonality standpoint, just from a fundamental seasonality standpoint, second quarter earnings are usually slower.

Yeah, it's different this time, what we're seeing in the numbers. But I think you have to be a little bit cautious in terms of post-earnings. Going into earnings, this market's heading higher, and the momentum is clearly on its side. But, Brian, when you say, you want to rise your winners, I mean, that's sort of what I was alluding to at the very top. What was a winner in the two-thirds part of this quarter ended up not looking so great over the final third. And now we begin this new month and new quarter, and now all of a sudden we've got momentum, at least for a day. I mean, it's not a trend, obviously, in a day. But I think that's confusing as to what the winners are going to be, which ones to actually ride when you just thought that maybe momentum was

going away. And then other parts of the market were going to be the ones that were going to carry the load. Well, I think there's two parts to momentum that most people are missing, Scott. Momentum's not just about price. It's about earnings. And that's where Ed's note is amazing and how he talks about it in terms of the earnings momentum. What we're saying is own the dip, don't chase the dip, meaning the dip in some of these memory stocks, I think are going to be a little bit more near-term. It's all about the scarcity of these products, quite frankly. The minute that you hear about less scarcity and catching up with demand, these stocks we think are going to get rocked. Why? Because really, it's the fundamental base of the hypers, we believe, the Microsofts, the oracles, the Palantiers, that actually building out the...

AI. We actually think those are going to be the ones you want to own on the dip and ride the earnings momentum longer term in those names, which we think is going to come back. I'm surprised, Malcolm, that you think that you could actually get an earnings-related sell-off, even if earnings live up to what the hype is, which I just gave you the numbers. Well, because I think we all have to acknowledge that there has to be some end in sight, right? There's only so much longer that the four hypers that have been responsible for so much of this CAPEX

can continue to quarter after quarter tell us that they're going to increase what that spending number is. I have grown skeptical of their willingness to continue to increase those numbers even in the back half of 20206. When I just look at a Microsoft, for example, which is down, I don't know,

20% or something year to date while the rest of the tech sector is doing so great. They've been doing everything that they can to message the last couple of days around layoffs and the need to do these layoffs define religion around spending, and they expect things to turn around and to write the ship in 2027. So I think that that is one of the canaries that's telling us that the four companies

doing the majority of the spending can't spend forever. A lot of other companies are having to borrow to continue that spending binge now. We've seen, you know, you mentioned Oracle at the top of this. They're a company that's been punished again and again and again for finding ways to bring more dollars into their war chest to get to spend again. And it's only so much longer that investors are going to continue to reward those companies. And the moment that they decide not to, that means also the second order effects, the chips companies, the data centers, the neoclouds, all of that has to start to come crashing down on top of itself because it's all built on the spending commitments of the hypers. Makes sense to you, Bryn? Well, I mean, it makes sense,

though, but I think that where he's a little bit wrong is you're missing two of the other big spenders, which are the two private companies, Open AI and Anthropic. As long as they're private, They're going to keep being able to raise a ton of money. On top of that, I haven't listened to one person, one smart person on a podcast who is in the know that says they're even remotely about to have excess compute. I mean, all you hear from the smartest people out there is we are compute, constraint, compute, constrain, compute, compute, constrain, compute, constrain. I think we'll continue to get some of the air come out of the balloon like we saw last week in the

memory names, but I think it's going to continue to build. And by the way, don't forget, the biggest driver of earnings, growth is who, drumroll, Micron, and NVIDIA. So that is why we're going to continue to have strong earnings. Those two companies are the lion's share of the growth will have for the full S&P this year. So I think we'll have little panic attacks, but I don't think the end is near on this trade. Right, because Malcolm, when you hear people come on, they're talking about runways lasting 20 into late 27 into even 2028. Now, no one's going to fault you for being a little more cautious. But if you go back to 96, for example, and say, well, Alan Greenspan rang the bell

and if we would have gotten out then, we would have missed three to four years' worth of gains in the space, albeit it ended poorly. And I'm not suggesting it either way that this is going to end if it, if and when it ever does. But there is something to be said about growing too cautious too soon. Yeah, I appreciate you framing that way, because I'm not necessarily, saying we all need to get out of the market entirely, sell everything you got and go to cash. What I'm saying is a lot more of the speculative stuff that we're seeing, the three times leveraged ETFs, the two times leveraged ETFs on a single stock, those kinds of things. Like, Nvidia, for example, is a company that its spending commitments are probably going to come

to fruition more than most other chip companies. So if you own Nvidia as a way to play the AI trade, you want to be in the chip names, I feel very comfortable about owning that name. And I think you're even having a setup for an opportunity to be buying the dip that's happening in Nvidia right now. In comparison to a lot of the other companies that don't have the ability to build out their capacity to meet this supply that we're talking or the demand that we've been talking about in time to actually do anything with it while the excitement is there. The market's rewarding you for it. The buildout is going to take longer than 2027 or 2028 from these big chip companies to actually meet the demand that exists today. So when we talk about compute constraints, realistically, the companies who have these constraints are going to find other ways tomorrow morning to solve them rather than wait for a micron or someone else to be able to build out the necessary capacity to meet them where they are.

You do, Brian, have people coming on this program and talking about in everything rally also. And by the way, we're now at least 10% year-to-date gains on all of the major averages, right? The Dow is the worst performer year-to-date at 10.2. The S&P's up 10.23. Russell outpaces everything at 21.5%. And then the NASDAQ at 12.5. But what about the idea of an everything rally? Like, you need to broaden out your exposure across this market, and you're going to be rewarded if you do that.

Well, look at the equal way. I think so. Hold on, Brian. Sorry. You really think. Brian, go ahead. Brian, go ahead. I'm sorry. I'm sorry. If you take a look at what's happened in small cap land, as you said, but the small cap index within the S&P, the SML actually has better quality earnings, and that was up over 20% as well. But you have cash flow coming back in, mid-cap stocks are working, financials are working, industrials, not just Caterpillar, not just Uber, not just Delta, but other names within industrials. We saw in health care starting to come back. So on everything rally to us makes fundamental sense. It's actually much more positive than chasing the markets.

By the way, in 1996, Mr. Greenspan's speech was about the nifty 50 stocks and GE, Coca-Cola, Pepsi, Prokner Gamble, and Gillette, all trading at 50 times earnings. It was well before the technology silliness. So are we anywhere near that? No, we're not. But at the end of the day, we think a broadly distributed rally in terms of U.S. stocks makes a lot more sense. is actually much more fundamentally sound. Because, Bryn, it's time to look at some, say, the beneficiaries, right? Health care of AI, health care going up and waking up, not by any, you know, epiphany. It's the fact of the matter that people are now looking beyond the hypers

for the, you move from the spenders to those companies that are going to benefit from all of the AI that is going to be enabled around the economy. and it's the healthcare names and all sorts of other areas that are next to get the catch-up. And I think that's why J&J is one of the top holdings in M-TUM is because Avi, Lily, J&J, all these companies are going to be buying biotech companies. They're going to have their own AI models. And that's where this stuff gets really cool, have been able to cure really hard diseases. And so I think that the beneficiaries within health care, especially those three names, I think we'll continue to catch a bit with what they're able to do, actually, with their own internal IP around AI.

I think it'll be really exciting over the next few years. I think that'll be secular, not cyclical. Malcolm, what's the sleeper sector for the rest of the year? What do you think is going to do well? It's probably not much of a sleeper sector because it's also doing well already. But I think financials are probably the more durable way to play the rest of the year, simply because we don't have to choose which company, which companies, within the tech sector are going to be the biggest beneficiaries and figure out how to weaponize

AI and turn it on their own companies and their customers' companies to really grow their top line. The big banks are going to participate in all of that activity, no matter which companies tend to come out to be the frontrunners. And so I think the Big Six specifically, the GSIbs, all the ones with the really big investment banking units are going to be the place that you want to be in the back half of this year to take advantage of that. I know Brian Belsk, he's not going to argue with you, right, Brian? Oh, I love financials, but I think the big thing on the small cap financials because they're such high quality, not only earners, but borrowers. And I really think that small cap financials are really going to be a place where people are going to see a lot of profit growth, but also a lot of great stock performance as well.

All right. Got another big story today, of course, as we watch shares of SpaceX, because the stock getting added to the NASDAQ 100 following today's close. Leslie Pickers following the money for us on what all this means. Hi. Hey, Scotia, in about 45 minutes, index funds that track the NASDAQ 100 will have to start buying SpaceX stock, whether they want to or not. JPMorgan estimates there will be about $4.3 billion worth of forced purchases flows into SpaceX by funds that have to reflect its weighting in the composite before it officially appears there tomorrow morning. SpaceX's weight in the NASDAQ 100 will be very small at first, less than 1%, but it will grow as SpaceX, public float does. We'll see that happen as the company starts to lift its lockups, allowing

insiders to sell. That could start as soon as next month, and then SpaceX may opt to do secondary offerings over time, which would bolster the float size as well. SpaceX shares, they're lower today down by about 3.4 percent, despite the prospect of tonight's flows, but markets tend to front run these rebalances, especially ones as telegraphed as SpaceX's. So the expected forced buying is likely already reflected in the stock price, Scott. Oh, interesting. Les, thank you. Leslie Picker. Bryn, you own it in several funds or at least various ways. What do you make of this?

I still think it's too expensive. I mean, I still can't wrap my arm around $2 trillion market cap while Micron, I think, has 1.13. This is going to come in. I mean, Leslie's done great reporting at, what, half.5 to 1%. And so I think, you know, it'll be in the index. It will get a modicum of flows. But I just still think this is a lot of pull forward on a spectacular company with like Gwen Shotwell is amazing.

The whole team is amazing. I just think as an investor, $2 trillion pulls a heck of a lot forward that has yet to manifest itself. I hear you, but look, you own Tesla, don't you? Yeah, but it's not, yeah. I mean, Tesla is delivering models. They stopped doing the, they stopped doing the X and the S to create the, to create the. robots, optimist, and it's not even remotely at the type of valuation that SpaceX is. So, I mean, I would love to buy SpaceX like 50% lower than this. I've said this before, Scott,

I feel very strongly the exponential returns for SpaceX happened in the private market. I think there will be linear returns in the public market. SpaceX was private for years. And so I just think most of the returns happened for us investors who didn't get to participate while it was private in the public market, I think the valuation is going to continue to be an overhang. Oh, well, which is why you've got people saying, well, it already IPOed. I mean, it was in the private market forever.

So the biggest rewards have already been realized by the professional investors who, and certainly some high net worth investors who are able to get access to that. Malcolm, how do you see this one? Yeah, I think that the put that was under SpaceX once upon a time by people who were able to rationalize that valuation or justify buying it.

We're saying, well, it's going to get included in all of the indexes eventually. And so that's the put underneath those shares. That's why you'd want to buy it on IPO day or soon after. And I think what we're seeing today is a selling of that news. It's now we have the actual inclusion. This is the event that I was buying it on the back of. It didn't actually move the needle the way that I thought it might be. And so you might have folks falling out of love with the idea of that trade,

at least in the near term. Brian, quick thought from you on this. Yeah, we typically don't buy IPOs until they are out in the public market for at least two quarters. I want to see how they're talking to the public. Number one, number two, we've owned Tesla, and we still think that that's the play that the two companies are going to merge with them in the next year or so. Guys, we'll talk to all of you soon. Appreciate the time. Brian, Brennan, Malcolm.

The Invest America Trump accounts going live today following historic opening bells from the Oval Office earlier, Megan Kassel alive at the White House with the very latest. Hi. ever joint ringing of the bell by the New York Stock Exchange and the NASDAQ, and it was the first time the bell was rung remotely. I was in the Oval Office for that ceremony, which marked the official launch of the Trump accounts. And the mood, I would call it celebratory. The president saying he hopes this becomes his signature economic policy. Some kids you can see there were in attendance to highlight who will benefit from the program. And there was Michael and Susan Dell. They're giving $6.5 billion to help fund some of these accounts. Now the top line on the policy is that

US citizens born between 2025 and 28 will be eligible to receive a new investment account seated with $1,000 from the government. Families can contribute up to $5,000 a year and all cash contributions will be invested in the SMP. But a number of private companies now are announcing that they'll match the government's contributions for children of their employees. You can see those here. And then speaking of SpaceX, add that to the list. SpaceX President Gwynne Shotwell saying today that she'll gift a share of SpaceX stock to each of more than 2 million children across the country. Scott. Okay. Megan, thank you. It's a big day. Megan Casella. Now to Christina Parts of Nevelos for a look at the biggest names moving into the close today. Hi.

Hi, Scott. Well, let's talk about Ford and Micron because both shares are moving higher on a long-term agreement, specifically for Micron to supply auto memory chips to Ford. Micron landed just a similar agreement with General Motors last week, and it's all part of Micron's ongoing investments into U.S. manufacturing, as well as an example of a memory maker signing long-term customer contracts, which is a break from, let's say, the cyclical nature. of the industry. Broadcom shares gaining after the company said it's expanding its partnership with Apple through 2031 to develop and supply custom chips to the iPhone maker. Apple has been one of Broadcom's leading customers since 2010, but the deal really cements Broadcom as a critical supplier for Apple going forward. Some questions raised. Maybe there's some more chips involved, too, and that's why you're seeing Broadcom up 4.5%. And last but not least, IBM shares. Also up on a price target increase from Bank of America, the firm predicts a guidance hike in

its next quarterly report it's going to happen this month. It sees upside driven by stronger growth, specifically in software, as well as power and storage shares up 3.5%, Scott. All right, Christina, thanks. See in a little bit. Christina Parts of Nevelos. We're just getting started here. Coming up next, FIFA's controversial, red card reversal, what it means for the betting markets ahead of tonight's U.S. World Cup match. Dessa Brewer, following that story, she'll join us with the latest next. All right, welcome back, betting markets going wild after FIFA. overturns a red card penalty. It would have suspended America's top goal score from playing in tonight's

pivotal World Cup match against Belgium. Contest a Brewer following that money for us, joins us now. So flow is a go and the big implications for prediction markets. I mean, what happened was, I just heard this from Caesars today. They said, look, we were expecting the U.S. to go in without its leading goal score. I'm just looking at my notes. Okay. With Balagans' red card rescinded, adjustments were necessary across nearly every market. So the bookies have to go back, and they have to quickly go, wait a minute. Belgium versus USA, how does that change the odds?

Look what happened on Kalshi when the announcement was made that FIFA was going to rescind its ban. You see how USA, the blue line pops up. From underdog to favorite. Yeah, exactly. Okay. So Fandle told me. Alleged underdog at that. Whatever.

Just throw that out there. Allegedly. Fandall told me yesterday that Balligan, in a day, went to getting four times the handle, the amount wagered as the next most popular bet on a scorer, which was Christian Policic. Meanwhile, you've got all of this enthusiasm over World Cup, Scott, and a betting bonanza. Kalshi just had its most lucrative market ever. Who will win the finals of the World Cup? That has surpassed a billion dollars in trading volume.

Of course, we have a commercial relationship with Kalshi here at CNBC. Piper Sandler analyst said that Kalshi did more than $5 billion in trading volume this past week. And that's up 45% over last month when, remember, we were in the middle of NBA finals fervor, and they kept setting record after record. Polymarket also up 24%. And you've got the sports books now just raking it in. Again, back to Caesars. They said the England versus Mexico match last night.

set new records for most unique visitors to soccer. Most number of bets on soccer ever. Most soccer handle. The amount of money wagered again. Fandul says almost 90% of the World Cup handle is coming in on USA. And so now you've got USA taking on Belgium tonight. What's that going to do to these records? Better is very happy.

Casinos and those that are paying out potentially, potentially not very happy. I mean, I've already heard from Doudder saying, no, no, no. The house always wins. they can structure the odds so that they're making it up in other ways. But the truth is when earnings come around, we've heard this from draft kings, we've heard it from Fandul, customer favorites can hit profitability. So if all the USA money is going in on USA and USA wins, the house has to pay out.

That's not true for the prediction markets. It does feel to some degree as though this is a transcendent event in that, you know, soccer's been popular here and there have been moments. The women's national team has done incredibly well. They've won World Cups, obviously. But that this feels like it could dramatically increase interest and then thus bets related to soccer going forward now so that whether it's the prediction markets or the casinos themselves, they are going to pay attention to that and then offer more products related to it.

The sports books anticipated that this was going to happen, that you would have all of these Americans in so many places with games happening in your backyard and that you would be sitting there watching it and watching these other teams play and really get into it. It's happening on our home turf, and it's happening on our home turf for the first time that gambling has really been legalized in so many states where it's part of the national zeitgeist.

It's part of our culture now, and it does increase enthusiasm for the sport and for seeing your money go to work on the sport. It feels like, and the American story here is like the icing on the cake of what's already. been a really incredibly popular World Cup. I mean, the games have been amazing. I know all the TV ratings for all of these games.

I mean, you talked about last night's game was electric. Did even involve the United States, but I'm sure viewership is going to be huge when those numbers come out. The fact that the United States is performing incredibly well is an incredibly huge gerry on top of this whole thing. And I told you before the World Cup began that reservations for hotels had come in much lower than expectations. FIFA had canceled room blocks and big swaths.

The hotel owners were very upset. It turns out that now that we're into it, that spending has actually come up to speed, it's meeting expectations, that out-of-town visitors are spending 17% more than they normally do because of World Cup. It also helps that the greatest players in the tournament are performing up to their great expectations.

So that just helps with all the buzz. I can't wait for tonight, and I'm sure you'll be watching. Yes, I will as well. And all of you too. contest the thanks. Sure. Top technician, Jeff DeGraph's next.

Welcome back to the bell. Is the momentum trade done for now or showing signs of a more sustainable rebound? Let's ask Jeff DeGraph, the chairman and head of technical research at Renaissance Macro. Welcome back. Good to see you. Thanks, Scott. Feeling I get from reading your notes is that the crack in the high momentum trade is far from over. Is that right?

I think so. And part of it's just the extremes at which it reached, obviously, it was, on par with some of the levels that we saw back in 2000. But as much as anything, it really became the same trade. You had beta and momentum and some of the low quality stuff all become part of the same trade. And that's usually where it gets dangerous. So does that mean they're done forever? I don't think so. But it certainly means I think there's enough people off sides that that needs to be probably more level set for the remainder of the summer. And I think there's some danger in those names. So you're seeing it, I think, go ahead. No, I'm sorry. I didn't mean to interrupt you. I was just

going to ask you to explain, you know, when you make a comparison back to what you saw in 2000, how can we distinguish between price runups and valuation runups? Because this appears to me to be more of a price run up than a valuation runoff. It's not like you can look at Micron and say, well, it's nine times earnings, but the stock chart and the valuation look like two totally different conversations. I think back in 2000 would have been more of a valuation issue because there were ostensibly no earnings for a lot of these companies that ran up crazy, that this is different this time in that regard. Can you distinguish between the two if there is such a thing? Well, I think you can. I think that's more nuanced when you look at just what

momentum represents. That's where you start to worry about its sustainability, right? When the momentum factor becomes dominant. That's the point at which there's usually some type of mean reversion embedded in it. And I think what you're getting to, which is the valuation story, the sustainability story is probably a better story for the next, say, year to two years than it is for the next one to three months, where those things can correct pretty hard. And I think that's what we're really looking at. One of the things, just to keep in mind, we just did a big report this weekend on the semiconductors. And I think one of the things to keep in mind is fundamentals usually are lagging. And they're going to lag by about two-quarter.

the price top or the price peak, right? So you have to just be very careful of believing that in some way, shape, or form the fundamentals are going to turn prior to the stocks turning, that the stocks are much better at giving you some type of flag than the fundamentals are. And the one thing I would say about Micron, and particularly these memory names, is high gross margins are a feature of tops. They're really not part of the sustainability story,

and that's just part of what tends to happen to bring in competition and the like. So there are some flags there that concern us. It might not be a valuation call per se, but there are some of these other flags that generally do associate themselves with peaks in those stocks. But what happens if the supply shortages, for example, in the memory chips like Micron persist for more than another year? So maybe making that calculation on a gross margin today is too soon? It might be.

But I think what you have to keep in mind is, you know, I believe the capital markets work, right? And I think what you'll end up with is people finding a way to, you know, as Jeff Bezos said, right, your margin is my opportunity. And I think other firms will look at that and whether that's, you know, something completely different that doesn't require that kind of memory or, you know, something as innovative as just kind of figuring out how to work around these supply guts. And I think that's one thing. It's easy for us to sit here today and kind of believe whatever we've seen in the past has to happen as we go forward. But all that kind of creative destruction takes place, particularly when you have these. types of shortages. And I think that's what we have to be, you know, really wary of. What's it mean for the rest of the market? When you, you know, you've got targets now from some

that are eclipsing 8,000 for the S&P. Does that seem plausible to you? And if we get there, what gets us to that level? Yeah, I mean, we're in the 7,700 camp. We were when we started the year there. We haven't proved from that. That's where we are. I think the one good thing that you're seeing is breadth. So as some of this momentum comes out, it's not people taking their ball and going home. They're actually looking at other areas. So you've seen health care be a big beneficiary of this momentum decline that we've seen. You've seen financials doing well. I think the one kind of hold out that hasn't done well that you'd expect to do well

has been discretionary. So we'd like to see that, you know, in terms of kind of the broadening of the cyclical tape. But the good news is that the money is staying within equity. So even as some of these high flyers came under pressure, that is finding its way into other areas of the market. And frankly, other areas of the market that tend to be, you know, pretty resilient in terms of what the messaging is for for equities. So, uh, we're sticking to our 7,700. We, we feel comfortable with that. But, uh, you know, that said, I don't, the sense to say that it has

to stop at 7,700 by any means. There's, there's really very little distribution in this market. And I think that's something that the bulls, the bulls can rest on. Well, they'll rest, I think, most, uh, comfortably on the fact that earnings expectations continue to go up, right? And until there's a change in that story, the overall market performance story shouldn't change either. Most likely, but again, the revisions and the expectations will tend to lag the peak. So I look more at breadth. If you're seeing revisions go up with breadth narrowing, then you've got a problem.

But that's not what we're seeing here. The Russell 2000 is making a new high. The S&P is right there. I mean, you know, this looks pretty good. I would just caution me today, you know, you've got more decliners and you have advanced. So you're seeing, obviously, this reversion of that momentum trade have its way on the overall. index. But that said, what we're seeing overall, when we look at the Russell 3,000,

is really the benchmark that we pay attention to, you're still in a very, very good spot. Jeff, we'll talk to you soon. Thanks again. Good to see you. Jeff DeGraff. Up next, the biggest movers as we head into this close today. Dow looking to close above 53,000. Christina Parsonson-Evelos is at the NASDAQ, taking a look at the stocks that are moving the most. What should we look out for? We're on AI infrastructure deal sending one stock storing, a presidential endorsement lifting a tech name and he's blockbuster, $12 billion acquisition, really reshaping the material sector. We'll have all those movers after this short break.

About 10 to the closing bill. Let's get back now to Christina for the stock she's watching. What's at the top of your list? Terowulf, because those shares are rising, specifically after Anthropics signed a 20-year lease to use Terawolf data centers in Kentucky. Shares are up about 5%, but the lease is expected to generate roughly $19 billion in revenue just over the initial term, Terowulf, a tire wolf pacing for its best day since February. Shares of Dell moving higher after President Trump said, once again, quote, go out and buy a Dell.

The comments came during the launch of Trump accounts at the White House today, joined by, of course, Dell CEO Michael Dell and his wife, Susan Dell, among others. Last but not least, shares of Solstice dropping after it agreed to buy specialty chemicals maker element solutions for more than $12 billion bucks. Solstice is a maker of refrigerants and advanced materials and was recently spent out of Honeywell, the move aims to expand Solstice's footprint in high-growth electronics.

And of course, don't miss our CNBC exclusive with Solstis and Material CEO tonight on Mad Money 6 p.m. Eastern. All right, Christina, thank you very much. Christina Parts of Nevelas. Market Zone's coming up next. All right, we're now in the closing bell market zone. Mike Santoli and Capital Wealth Planning's Kevin Simpson

here to break down these crucial moments of the trading day. Oliver Renick is always standing by at the CBO in Chicago. for some options action. Kate Rooney looking at the job cuts. We mentioned at the very top of our show in Microsoft. First though, Mike, your take on this market today. Well, first of all, a real reminder of how quickly, really overnight, the market complexion and storyline can change. We have the NASDAQ 100 up percent and a half, equal-weighted S&P, which was the star of last week, is dead

flat. So you have this huge outperformance by the few, over the many, reverse of the broadening trade, the backlash of the backlash, whatever you want to call it. And I think it nets out to a market that is willing to kind of stay in place, let the most overheated stuff cool off. And the question I've had for a while is, is that process of unwinding some of the most crowded areas of the market going to knock something loose in the rest of it? The answer so far is probably not, or at least not yet. As we head into earning season, when you tend not to have a lot of macro influences driving the tape all in one direction, it feels like the market is in a decent place. But do you believe today's move more than you believe Fridays in terms of what the message is of what leadership is going to be?

Because today, all the defensive and cyclical stuff is taking a back seat while on Thursday and Friday, it looked like it was telling you a different story about broadening and the macro cyclical move. What do you have coming up in overtime to take a look at this? Because you're going to probably get, well, you're definitely going to get a record close on the Dow, but you may very well get a close above 53K for the very first time, too. Yeah, for sure. So obviously try to, you know, kind of microanalyze exactly what's driving all this. We also actually have an analyst who lowered a price target on Microsoft today,

which is a really interesting test case because it's not benefiting from the move back to the megas because it's mostly a hardware move. But he's saying even though CapEx spend is going up, and memory prices are flying that it's still a buy. So we'll see if there's any traction there. Yeah, I mean, it's the only of the MakerCaptex down today. So we'll see you in just a little bit. Michael, thank you very much.

That's Mike Santoli. Oliver Acebo, give me some options action, please. Yeah, Scott, we're watching Nvidia today, which is up despite a report last night from semi-analysis that its next server rack is facing a year-long plus manufacturing setback. The company said that's not. Not the case. And that's all options traders apparently needed to hear. Calls more than double puts today by volume with about two-thirds of the $600 million of Nvidia Options Premium tied to calls,

and almost three times as many calls bought versus puts. Six of the top 10 trades by volume are zero-day options. Seven of ten are calls, and the most popular July monthly expiry is the 200-strike call. We saw what looked like the same trader by three legs of roughly one million dollars worth of those strikes each for a total three and a half million dollar trade. Those contracts cost just under seven bucks each at the time they put that position on, meaning the trader still needs about 5% more in Nvidia to pay it off by the end of the month, Scott. All right, Oliver, thanks very much for that.

That's Oliver Renick. Kate Rooney, Microsoft standing out today, I guess, for all the wrong reasons. Yeah, Scott, so some major job cuts over there. Microsoft eliminating about 4,800 jobs. That's roughly 2% of its global workforce, but the impact is much deeper if you look. look over in its Xbox gaming division. Microsoft cutting about 20% of gaming staff. The tech company says this morning, or it said in a memo that its four game studios are going to become independent under new management. As part of this broader restructuring that they're doing,

CEO of Xbox wrote to staff this morning that this is part of a turnaround for that division revenue over the gaming unit has shrunk in recent years while Azure and the cloud business is really the growth engine at this point. Microsoft, the latest mega-cap tech company to college workforce as it starts to refocus more on AI, but the company making it clear in this memo to employees that the roles being eliminated today, they said, are not being replaced by AI. Microsoft, the worst performer. If you look a little bit more long-term at the mega-cap tech name so far this year, it's down roughly 20 percent. Scott. All right, thanks. Kate Rooney. Kevin Simpson, how are you trading this market?

Well, we'll work on Kevin's microphone. issue, but I can give you an update on what's happening right now because we're still pacing for that close about 53,000. It may go right down to the wire, of course, as we try and settle out. 53,000 and 25. Kevin, I'll come back to you. I'm told we're good now. Tell me how you're trading this market. Yeah, sorry, Scott. I think we were looking at the breadth of this market, maybe a little prematurely carrying over into this week. But I'm looking ahead to next week and the following week for earnings. I think that the tech trade has to continue to be front and center. that's where the earnings are going to come from.

That's where they've come from. So they've been the ones driving the market. But the one thing that I think has shifted, Scott, from the beginning of the year to the second half, is we're going from just pure expectations to executions. And what that means is I think that the stocks that will deliver on earnings will be the stocks that are most greatly rewarded. And even the stocks that deliver,

but if they miss, even by a hair, if they miss their whisper numbers, I think we're going to see them get really beaten up. So for me, it's about a validation. It's about fundamentals. And I think you have to be a very much more selective stock picker within tech and not just throwing a blanket over the entire trade, expecting it to work out. So earnings are going to be huge this time. I know they always are. But I think especially guidance, most of them we've seen, with the previous few quarters.

Industrial average above $53,000 because we're moving higher.