Closing Bell - Closing Bell: 9/10/25

Episode Date: September 10, 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.

Hello and welcome to closing bell. I'm Sarah Eisen. In today for Scott Wapner, we are live at Post 9 of the New York Stock Exchange. This make-or-break hour starts with another run at records as the NASDAQ and the S&PI fresh record closing highs. Here's the scorecard with 60 minutes to go in the trading session. Utilities and technology, also energy today leading the way while Staples, health care, and discretionary in the reds. Among notable movers, FinTech Company Klarna popping in its debut, we'll have a lot more on that coming up. But the big story, front and center, has to be this monster move in Oracle. Shares hitting a record high on a bullish outlook for its AI cloud unit, which takes us to our talk of the tape.

We're getting new details on some of Oracle's cloud deals. Let's get right to McKenzie Sagalas in our San Francisco newsroom with the latest. What do we know, Mac? Hey, Sarah. So we're getting some clarity on Oracle's blowout earnings. The Wall Street Journal reporting that OpenAI has signed a $300 billion deal with Oracle for cloud computing power. that is one of the largest contracts of its kind and a staggering figure that far exceeds OpenAI's current revenue. This is a five-year agreement that starts in 2027, and it helps explain that surge in future contract revenue that Oracle reported last night that now totals $455 billion in backlog.

It also marks the first quarter where Oracle is seeing some return on investment from its massive Stargate Data Center buildout project in the U.S. and helps justify ramping capex to $35 billion this year. Oracle's CEO staff for Katz had said on the call after the bell that it signed four multi-billion dollar contracts with three customers were still looking to put a name to some of those big buyers. And at this point, Sarah, Open AI is not weighing in. So I guess the question there is how sustainable, is it? I guess people are pretty bullish and optimistic that it is and that it will continue.

I mean, what's remarkable here is the amount of risk that both sides are taking on. So, OIA has $10 billion in annual revenue. They're going to need to come up with $60 billion for this contract alone. And then on Oracle's side, they're probably going to have to take on debt to buy the chips that they need to meet this contractual demand. So they're putting a lot of eggs into one basket with this in order to fulfill what OAI needs here. Yeah, I mean, some pretty stunning commentary, including from the Morgan Stanley trading desk. an order of a beat that is hard to fathom the order of magnitude of this beat. McKenzie Sagalas, we see it in the stock today, up 35%.

Thank you. Let's bring in CNBC contributor, Trivariates, Adam Parker. I mean, it has been sort of an exciting AI cycle. And this today goes down as one of the highlights, I think, doesn't it? Yeah, I mean, we're big, first mega-cap company, biggest upward sales version ever was May 23 with Nvidia. Right? And so we're two years and four or five months into what is going to be a decade-long trend. And you're going to continue to see, you know, I think last week, Scott was in a dour mood and asked me if the AI trade was over because we had one down day.

And I had to say, no, you know, I mean, you know. You were right? No, no, I'm just saying we always, you know, we do that to each other. But, you know, I think we're, you know, we're really phases. So if you're running an equity book against the SP 500, by the way, you like how we talk about him when he's not here. So it's perfect. You know, I think we're going to be, you know, cyclical, but much higher as we go out, one, two, three, four, five years. You have to own AI exposure in an equity book versus SP 500.

Yes, but this is sort of a surprise AI equity exposure play, Oracle. I know it's had some momentum here, but it seems like their cloud infrastructure, AI play was underestimated. For sure. And I think they probably have some health care stuff underneath there that's underestimated as well. And they did that certainty a few years back. And so, look, it's not just five names. I think the challenge will be, and it always comes up even when you summarize that, story is like at what point will investors be concerned about return on the capital spending

and when will that kind of weigh on equities and how will we transition from the obvious beneficiaries to productivity beneficiaries where still more on the comp, second half, 26 and 27. And that will happen, but I don't think we're there yet. And I think you have to own a bunch of tech in your book. and I'm really not that surprised. I mean, the reaction itself is obviously big, but I'm not surprised you're going to see upward trends for a lot of these exposed numbers.

Well, Broad comes up 8% of this news, some of the AI players, NVIDIA, up sharply, AMD. It all makes sense to you? Look, we wrote, again, a few weeks ago, our North Star, we called it, is to own semis over software as a general rule. I mean, Oracle's a bit of a combo, but I just think semis compute, if you want to call it that,

grew for 30 plus years at 2% above GDP. it's going to grow 5, 6, 7% above GDP from two years ago until 5, 6, 7 years from now, and that growth is going to be at higher gross margin than it was historically because a lot of the businesses just to, you know, they don't make the chips themselves anymore, they outsource. So do I want exposure to a business growing that fast

make the chips themselves anymore they outsource? So do I want exposure to a business growing that fast above GDP? I think so. It doesn't mean we won't have some 20% or 30% corrections on that path. I guess it's at what valuation and until what point? I don't think valuation really matters a ton for security selection. In fact, I think it mostly helps people lose money. I think what matters is accelerating revenue growth, margin expansion, beating expectations.

And I think as you see, there's still a lot of upside potential. And that backlog number from Oracle is just massive, right? Like they're telling you. And look at what Jensen said at Nvidia, right? He started saying, we're what, what, 600 billion in global data center CAPEX now? I think he said we're going to have a trillion in 2028. Then he took it to 2027. And then people were saying, well, maybe there's three to four trillion.

in 2030. So, you know, you want to talk about valuation? How about something that's growing from $600 billion to $3 trillion in the next six or seven years? Like, do you want to short that as an exposure? Not really, right? You want exposure to that. So my view is this is a party. It's pretty fun.

But it's like 8, 9 p.m. Like, you still want to go to the party and have a good time. And own all, Broadcom, NVIDIA, Amazon, all the hyperscalers that are in this party. I think there's a lot of semis down the stack you can own, too. I mean, I don't see how the world can function without K. Black Lamb, Amat, ASML. I don't see that can function without cadence and synopsis.

I think there'll be things in there that, you know, obviously Taiwan's semi, which is probably the most important asset on Earth. I mean, there's a ton of things as you look down the road that are just going to continue to be sick going upward slope for some time. So, yeah, if I run an equity book and U.S. exposure is part of what I do, then, yeah, I'm going to own a lot of semis over the medium and long term to continue. I mention synopsis. It's down 35% today.

You know, something out of week. Yeah, I think over time these things just that you can't. function without EDA. So you're going to need those businesses. You know, they've had some company-specific stuff in there. Yeah. Yeah. Reminding us all that you were a semiconductor analyst when we first met. You know, when I covered them 20 plus years ago, I didn't, they weren't this important. But the challenge is not only they big, broadcom and a video, but the beta, meaning like how they act when the market goes up or down is even bigger than that. So you're talking like it's really hard for the market to go up a lot without, and semis go down a lot. I think at this

point. They're just so important to the overall AI trade. No one cared about semis when you were. Yeah, they were more just kind of a six-month rental than they were kind of a structural 10-month hold. And a lot of the businesses built the stuff themselves, so their margins got collapsed. I think the difference in this cycle with all the hyperscale or cap-X is if it turns out to really weigh on securities and people worry about the return, they're not going to go down anywhere near as much as the old-school semis did because their margins got killed. These guys are just funding it from the cash flow that's so massive from their other business.

And the revenue growth is incredible as well. All right, Adam, stick with me because let's hit Clarna, soaring in its Wall Street debut today. After pricing above the company's expected range, Leslie Picker here with more, another successful debut. Another successful debut, Sarah, perhaps the first of many to come this fall. Shares opening at about $52 a few hours ago, losing a bit of steam since then, but still up about 17 percent from the IPO price. Klarna has been no less volatile as a private company, launching a down round in 20. 2022 from an eye-popping $45.6 billion valuation just the year prior. Today's IPO price gave Klarna a fully diluted valuation of about $15 billion. Klarna's products are at the checkout everywhere from Walmart to Sacks to DoorDash. The company allows users to pay in full, pay later, or opt for longer-term financing. Klarna generates revenue, which was up 21% in the second quarter, in three ways. Fees paid by merchants, fees charged to

consumers as well as advertising. As Sequoia highlighted to you earlier today, Sarah, they see the two vectors of growth as being a Klarna card in every wallet and Klarna at every checkout. In the meantime, Klarna lost money in the second quarter, although it did show a profit in 2024. Sarah? I mean, the valuation, it's gone, where are we now? It's still a long way from where this was valued a few years ago, right? About $5 billion. 18 billion or so. So yes, still well below that $45.5.000. $5.6 billion. Anyone in that round is definitely out of the money if they're still in this name. All right, Leslie, thank you. Let's bring in B&Y's Alicia Levine and MetLife Investments, Drew Mattis.

Trivary's Adam Parker is still with us. It's great to have all of you here. Alicia, I mean, another strong sign from the IPO market. How important is that? So it's very important because we've had basically a lackluster, if not dead, IPO market for three years. And I think some of the the animal spirits and the bullishness that we saw in the market, ending 2024, going into early 2025 is finally happening. So we're getting the M&A, we're getting the IPO market, and we're getting a Fed cutting. And all that is very bullish for future price action in equity markets. So you're in a situation where earnings estimates are going up, the Fed is cutting.

You've got an open IPO window, and so we just see markets higher from here. How do you see, Adam, the move, you know, these great. great one-day moves, but of course the bigger question is how sustainable is it? Yeah, we were noted Traverit a couple of weeks ago on IPOs and the distribution returns. The average in the last year has been 32% day-one return. This one's worse than that. Companies that lose money at the time the IPO subsequently underperform. Performance day two and beyond has been really weak, particularly since late June.

You had monster moves out of the gate for Circle and Figma, but some of those stocks have really retreated since. So I think the IPO market is different than it used to be in that, you know, you just take that day when return and move on and it's like a free gift and you know a lot of these businesses have a lot of more a lot more supply coming along with follow on so people worry about that and like you said the valuations the private market got kind of crazy so yeah i think it's a good sign that deals are getting done i totally agree with alicia but i you know you know there's got to be some joke about you know you buy the stock now and you pay for it later or whatever with car no yeah obviously some some joke related to that i'm you know not smart

enough to write that, but we could probably ask Chad GPT to write that joke for us. But, you know, the IPO market just hasn't been good for businesses where there's, you know, not a ton of float and they lose money at the time of the IPO. So I think people are happy with the day one return, but let's look where it is three months from now. Yeah. I mean, Drew, we also got a PPI report today, which showed more good news on inflation, a negative sign in front of it, where everybody's been expecting this tariff inflation, at least at the wholesale level, we're not seeing it. We're not seeing it. And, And it's, you know, it's one of those things where everyone was so worried about it and we just haven't seen any inflation.

And the question is, you know, when consumer, if we get inflation, will consumers even notice it? Not because we're not expecting that there'll be some inflation pass through, but, you know, if a price of a TV goes down by 50% over the next year instead of going down by 60%, is anyone really going to think, wow, you know, that extra 10 percentage points, you know, was because the inflation story didn't play out. So when you're in a downtrend for a lot of the manufactured goods in terms of pricing and the downtrend actually moderates because of tariffs, are consumers really going to notice that? I think they're more likely to notice food and energy prices, and those have actually been much better than they have been recently. So Alicia, you said that now the Fed's cutting. We haven't gotten there yet, but next week the Fed is expected very much to cut rates. One question is, would they go 50? Let's see what CPI shows tomorrow. And will they cut at every meeting for the rest of the year?

How critical is that to your bull thesis? So I think whether the Fed cuts twice this year or three times this year is a little bit irrelevant because the data are coming in consistent with slow but positive growth and with the Fed cutting. So the market's pricing in something like 130 basis points of cuts from this year towards the end of 2026. It's just very bullish for the equity market, and you have something of a disconnect between the higher earnings and the higher margins and what's going on in the U.S. equity markets. And we should talk about this, like, craze about let's invest everywhere outside the U.S. and not the U.S. I think the earnings we've seen in this quarter is just an example of what these companies can do. You like the U.S. versus not the U.S. over the rest of the world.

Even though it's underperformed the rest of the world. Yes, and it will end that year this way this year because the U.S. U.S. dollar is weaker this year. Most of that move was in the first four months of the year, not since then. The earnings power and the dynamism and the capital markets of this country are just different than the rest of the world. Add to that a Fed-cutting cycle with worries. You don't have bullishness. You have people worried about the labor market. You have predictions of recession. There's a lot of doom and gloom around every table that we go to. And the fact of the matter is. Right. The doom and gloom is out there.

Every economist was worried about tariffs producing inflation. That's right. And so today's report was a shock. Tomorrow's CPI, we'll see. But to the point just said, you know, in the end, consumers talk about inflation as it relates to energy and food. And we know that from the last couple of years, and as that's coming down here, we think that the consumer is hanging in there. All the retail companies told us in the last few weeks, the consumer is hanging in there. even the low end, it's lumpy, it's stressed, but it's not under.

And this is just a great environment for investing. The CEO of PNC told me yesterday that they just saw last month record spending on their debit and credit cards. So what Alicia does for living is a little different than me because she does to do cross-asset a little bit. She has to think bond stocks. She's got to think, I really just focus on U.S. equities. And so I know it's a stark contrast. When I talk to someone who's got a fixed income background or does credit, they're always more embarrassed. They're always worried about economic stuff.

When you just talk to what I do, like, the U.S. equity markets, a lot of growth stocks, and, like, people come to my idea, and our clients come, and they're pitching apple loving and nebias and, like, stuff's good. So I don't see quite as much bearishness in the U.S. equity-only world as I do when I do the cross-sets and stuff, I see a little bit more bearish at those tables. I agree on the Fed and, like, is this. It doesn't matter. So I agree with what everything she said, because at the end of the day, like, do you think the skew toward the Fed in the next year is going to be more dovish or not? I mean, we've all, we've had those debates about independents or not. We've had debate about new people coming in. It's going to be more dovish. It's going to be more dubish.

So I'm with, I'm with her. Like, do I want to own a market where the median company has gross margin expansion? Where the dream of AI productivity coming in 26 and 27 is high and where the Fed skewed to more dubish? Yeah, yeah, you want to short-dive market, good luck to you. It doesn't matter what the Fed does. I mean, if you want to own small-caps, they're going to get more duff. They're going to get more duffish. If you want small-cap earnings to improve and their, you know, interest payments to go down.

Why would they own small caps? So you only want to own semiconductors and AI places? No, I'm saying there's a lot of stuff in the SPIP. We own health care, financials. There's a lot of stuff you can own. But I think small caps work only when you're six months away from a recession bottom and you're playing for incremental fiscal and monetary policy. It helps you.

Yeah, you can get a trade on that. We saw it around the election or whatever. But the core things, and I totally agree with your view on non-U.S. versus U.S. the core things that grow fast, the big cap U.S. equities are overexposed them. So do I want exposure to awesome stuff or terrible stuff? That's the answer. Awesome stuff. Yeah, awesome stuff.

Drew, last word to you. What do you expect for CPI tomorrow? It really doesn't matter, you know, but I would make the point on the Fed that why they're cutting matters. So cutting because the economy is weakening is not traditionally a good thing. And just because they're easing and people are getting excited because there's going to be this easing cycle, they're not easing because things are great and productivity surging. They're easing because the economy is rolling over in terms of the labor market. And that's a very different outcome.

And I think people are undercounting the amount of risk out there. So that's the face income. Right. Ideally, you would want a cut, like an insurance cut, when things are okay, to sort of protect us from getting weaker, which would be, I guess, the best case for the markets. Alicia, Drew, Adam, thank you all very much. Great discussion. Good job.

Great to see you. Thank you. It's great to see you, too. We're getting some breaking news. Megan Kisela has that for us in Washington, Megan. Sarah, some heavy breaking news here on a fast-moving story coming out of Utah. We can report a single shot was fired at the right-wing political activist Charlie Kirk as he spoke at an event at Utah Valley University this afternoon. Now, that's according

to police and to an alert put out by the university, which also says now that a suspect is in custody following the shooting. Kirk is known for founding and leading the conservative group Turning Point USA. It tours college campuses to share views on hot button topics, immigration, and abortion. He's also an outspoken supporter of the president. President Trump did put out a statement following the shooting and confirming it as well, saying on true social, quote, we must all pray for Charlie Kirk, who has been shot, a great guy from top to bottom. God bless him. Now, Sarah, we don't know Kirk's condition at this point. What we can report is that the Attorney General Pam Bondi has posted on social media that FBI agents are on their way to the scene.

FBI director, Cash Patel, also said that the Bureau is closely monitoring. reports of the tragic shooting. He says agents will be on the scene quickly and that the FBI stands in full support of the ongoing response and investigation. So more as we have it, Sarah, very fast-moving story here out of Utah. Yeah, terrible. All right, Megan, thank you very much. Megan Casella. We'll be right back here on Closing Bell. Welcome back. Holiday forecasts and surveys are officially rolling out, hard to believe. Courtney Reagan is here with what could be in store for the retail space. Courtney, I guess we are going into that all-important time. I know. Our kids' crayons aren't even dull yet from back to school,

but Deloitte is already forecasting holiday sales will grow between 2.9 and 3.4%. They look at it for November through January that's compared to last year's rate. Now, that is the lowest growth rate since 2018. And at the low end of that range, of course, is only slightly better than inflation. Now, last year, the actual holiday sales did come in above Deloitte's forecast. The year prior, actual results were about in line with the firm's forecast. We should also say that consumers are telling PWC. So this is a survey that they expect to spend 5% less this holiday season over last year. And this is the first year-over-year drop in that survey since 2020.

It's the youngest respondents that are planning to cut back the most. They're really dragging down the average. So it's the Gen Z cohort. They say they plan to spend 23% less than last year. But millennials, Gen X, baby boomers expect to maintain or even increase. holiday spending. But remember, for both the forecast and the survey, the U.S. consumer has been remarkably resilient in the face of economic headwinds. They're still spending more than many had expected, whether it's an economist or a retailer. And Sarah, I know you've spoke with the

CEO of Tapestry. She keeps using that word choiceful like so many of the other CEOs are. So they're spending, they being the consumer, but doing so maybe carefully when they think it's worth it. Yes, choiceful. She did use that today with me. And I have heard that. And so of you across retail value, choiceful, priorities. Like, those are the kind of things. Exactly. Courtney, thank you. Makes sense.

Thanks. Our next guest has his finger on the pulse of the latest consumer trends, and he does see some surprising activity among high-income consumers. Let's bring in Consumer Edge, Head of Insights. Michael, Gunther, Michael, it's great to have you. So you guys pour through all the data and the information. What are you seeing with regard to high-end shoppers? So companies like Walmart, Dollar General, Dollar Tree,

are seeing an outsized share of their new shoppers. We're talking in the latest fiscal quarter and then continuing into August, coming from high-income shoppers. So this is trade-down. It's relative to their overall customer basis, and it could be that even though high-income consumers are performing better

and holding up better than lower-income consumers with rising asset prices, they're still looking to manage spending. They're still looking for deals. And it also is an indication that the efforts that these companies have been putting into attracting high-income consumers with expanding assortments might be working.

Right. That has been a story for a few quarters now, I guess, with Walmart. I mentioned the tapestry interview. They had their investor day. I talked to Joanne Kervoisera. And I was asking her, you know, these luxury companies, especially in handbags, have raised prices to crazy levels. It's become unaccessible. And maybe one reason coach is growing double digits is a $600 handbag looks a lot better than, you know, $4,000. No, absolutely. I mean, we've seen among other areas that have seen weakness. Luxury has been consistently weak. Now, for several quarters in a row, that doesn't seem to be turning around. And yeah, there's this sort of middle ground as consumers seem to be pushing back on those price increases that have been moving up,

up, up to a point where they may turn to a different type of company. I'm thinking about who else benefits from this. T.J. Max has had a, T.J. X has had a great run. Absolutely. So off price. So, you know, T.J. Max, Marshalls, Burlington, resale companies. So we're talking, you know, Savers Value Village, Deepop, which is owned by Etsy. That's one of the best performing sectors of the year. It continues. It's accelerating. And actually, high-income consumers are actually spending more at resale and increasing their spend more than the rest of the consumer base. So that shows that in addition to, you know, sustainability, high-income consumers are looking there for deals. They like the throw of the hunt, and they're just looking for ways

to stretch their dollar further. What about low-income consumers? What do you see in the data there? Yeah, I mean, they are not holding up as well. That's sort of like a story that we've seen a lot of commentary on from a bunch of these retailers. I think, you know, one of the concerns is going to be if this high-income consumer engine that's been powering consumer spending starts to falter, then that starts to become an issue. And we've seen them pull back on more discretionary items, travel like airlines, lodging, full-service restaurants. So we'll have to see if that actually, you know, plays out in a negative way for the rest of the year. I do wonder if this is why we're just not seeing as much inflation as expected with regard

to the tariffs. And that is, it's a tough environment if you're a retailer to pass on these price increases. Right. Yeah. I mean, we monitor pricing very carefully, you know, across the board, but also at places like Walmart at Target specifically. And there's been weeks when pricing is moving up a little bit, but it's sort of been range bound. They haven't really passed along price increases outside of some specific categories. It's not been broad-based yet, and it's, you know, benefiting, you know, consumer spending overall. But we'll see if that really, you know, continues to hold as inventories whittled down and they have to, you know, manage margin. Even with some increases in prices that we've seen across the good sector, apparel really hasn't, it doesn't feel like it's seen it.

Yeah, you've seen it here and there. I mean, you know, when you think about fast fashion in particular, you know, after the de minimis exemption was removed, she and raised prices, they actually didn't really suffer too much in terms of fast fashion market share after they raised prices. So it seems like those were successful and consumers absorbed them. So net net, how is spending overall, given some of these trends that you just talked about? Spending is holding up relatively well. I would say better than feared. You know, as I said, there's sort of, you know, there's categories that are performing well that are more affordable. In other words, how much overall spending is driven by a low-income consumer?

Oh, I mean, not spending by much. Yeah, no, I mean, the high-income consumer is much more important to this. Yeah, they've been carrying it. That's why we're so focused on what are they doing and what might that indicate about how they're going to behave in the holiday season, because if they buckle, that's an issue for the entire retail landscape. So holiday winners, resale, big box. Resale, big box, off-price retail. If trends continue now, then they'll certainly benefit into the holiday season.

Really interesting. Michael, thank you very much for joining us. Thank you. With a read from Consumer Edge. Up next, top financial advisor, Rich Saperstein, standing by with how he's advising his clients with stocks at record highs here. He joins me after the break at Post 9. Closing bell will be right back with the Dow Down 281.

But the S&P 500, it's remaining positive. near record highs. NASDAQ also losing some of its gains. We'll talk about it in just a moment. The S&P 500 in NASDAQ, losing steam, as we mentioned. The S&B is still positive, but we did hit intraday all-time highs again earlier today. Joining me now is top-ranked financial advisor, Treasury partners, Richard Sapperstine, to discuss how he's advising his clients.

When you see equities like this at a record high, I know you've been pretty bullish of them, all invested in equities. What do you tell them to do? Well, the current environment just reinforces the benefits of holding stocks right now. So we have moderating inflation, accommodating Fed, great Q2 GDP and earnings. Next year we're going to have the benefits of deregulation, tax policy, ease of permitting. So stocks are at highs to reflect a lot of the benefits in the investment in climate. So our clients are fully invested with an overweight in large-cap technology right now.

And what about bonds? Well, we own municipal bonds. We've been buying bonds for quite a while. And, you know, on an asset allocation basis, when clients have stocks and they keep growing and it becomes a larger part of their portfolio, there's a point where you have to sell some stocks, reallocate into municipal bonds. Notwithstanding the fact that, you know, the market's up 103% over the last five years. and what? Earnings are up 95%. So a little bit stretch on multiples, but we think it's an

excellent market to own stocks. So stay in stocks? Absolutely. And sector specific? Well, we're long-term holders of technology. It's very important to be in that sector. We're in a paramount period to own technology stocks. We're seeing it today with Oracle. But it's not all technology. I mean, some of the software stocks definitely have and kept up? Absolutely. And look, it's not only software. There's a lot of peripheral names around the primary data center providers. So we own, as I've said previously, the independent power producers. They're in great need because we're under-electrified in this country. And so utilities and the peripheral companies that support the growth of data centers and the electrification of

the country are sorely needed right now. Yeah, I saw the electricity costs. We're actually one of the contributing factors in inflation today in the PPI. So I guess that trend continues around AI, data centers, investment. So the ones we own Vistra, VST, NRG, these companies generating 9-11% operating cash flows. They're 70 and $30 billion companies, so they're small, but they're redeploying that extremely effectively. For example, Vistra's retired roughly 30% of their float since we started buying it in 2021. So it's a capital allocation, it's a demand play, and it supports on a periphery

the growth in data centers. I noticed that you recently trimmed some of the asset managers to add to technology. Was that more about the asset managers or about the AI exposure? Yes. So the asset managers had to go because we wanted to add to IBM and Amazon. So given a fixed amount of capital, we had to find a, you know, a source for it. Plus the asset managers haven't been trading well and, you know, we wanted to reallocate to more of a large cap tech overweight. Interesting, IBM is one of the topics. Yeah. I often wonder whether it gets credit for the sort of expanding AI business that it's built out. It doesn't get enough. Roughly 35% of the revenue is recurring. They have 64 billion total in

revenue. It's an AI infrastructure software play. They do AI consulting and also they are coming out with the next gen mainframe. So IBM is one of the sleepers. It's down 20% after they announced their last earnings. Probably a good company. Again, peripheral right of around the core of data center growth and that whole technology sleeve. Yeah, and a software play, but not necessarily in the same way that the work days and sales forces are on that front. So what would make you feel less confident? You sound very bullish.

Yeah, we've been fully invested for a long time. What would do that? It would be some, you know, cataclysmic trade war. But the tariffs in April, when everyone got spooked, that didn't make you nervous? They've been tremendously overblown because they haven't shown up yet in the inflation. I've heard the end of American exceptionalism, capital flight, everyone's going to sell U.S. dollar assets. Well, the market got a little jittery for a minute.

For half a minute, okay? But look, for example, if inflation comes in higher than expected, right now in the market, Fed cut is probably reflected in stock prices right now. So, you know... I think three cuts this year now is reflected, right? Yeah. So, you know, if inflation is a surprise to the upside, that could be a tail-risk event. But right now we're following earnings.

Earnings have been growing. Cash flow is very strong. And, you know, that's what's keeping us in the game. But do you worry about earnings and specifically margins, which have been strong for the last few years, given some of the absorption of the tariffs that companies are going to have to deal with? Margins could be impacted. the tech margins are running 20%. The non-tech in the S&P are 10%.

So that's why investors should really think about it. Even though these stocks are selling at high multiples, it's very important to look at margins and operating cash flows, and they're using all that to reinvest back into their business. So take Amazon, $163 billion in operating cash flow, they're reinvesting $120 billion right now. And think about the trend of Amazon, whether it was e-commerce, to distribution, to AWS, the cloud provider.

And now we have Kuiper, where they have 100 satellites already airborne, moving to 3,200 satellites. So they're going to be providing satellite-based internet as a competitor to Starlink. So, you know, we like the margin expansion and the operating cash flow on large cap tech, even though they're at higher multiples. All right. Well, good day for that. Rich, thank you very much. It's good to see you.

Likewise. Up next, we are tracking the biggest movers as we take you into the close. Christina Ports and Evelas standing by with that. Christina. Sorry, no mercy. One stock that actually grew sales and customers still got crushed 17%. Another company is sitting on half a billion bucks in Bitcoin and rewarding shareholders. And the day's biggest loser, down 35% after missing by a mile.

We'll break down why beating expectations just isn't enough anymore right after this break. Got about 17 minutes here until the closing bell lost some steam. Let's get back to Christina Parts and Evas for a look at the key sectors to watch. Christina. Let's start with some names. Chewy having a rough day. Shares are down about 17% despite actually growing sales, adding customers. They even raise their revenue guidance, but margins disappointed and expectations are actually sky high going into the print.

The stock was already up once, so 25% year to date. So investors were, we could say, somewhat priced for perfection. Meanwhile, synopsis, that name is plunging big time, down 35% making it the worst performer in the S&P 500. The semiconductor design software company missed earnings slashed its outlook as sales of design IP intellectual property dried up, heavy selling volume, also pushing it below its 50-day moving average. On the flip side, GameStop shares jumping after beating expectations up 4%. This video gamer retailer is really just now at proxy for Bitcoin. They're sitting on over half a billion in Bitcoin and plan to give shareholders warrants as a special dividend.

And lastly, Boeing shares turning around right now into the close after reports of a tentative deal. Ah, they were turning around. Now it's still down 1%. A tentative deal to end the strike with defense workers. The strike of over 3,000 workers who assembled military aircraft had just entered its sixth week. So some changes there, but shares are still lower. Sarah? Okay, thank you, Christina. And, of course, another quick check here on Oracle shares.

This is the stock of the moment. They surged, of course, after earnings and guidance yesterday, still up 37 percent. Was up more than 40 earlier. Still ahead, we'll tell you how that big bounce is impacting Oracle Chairman, Larry Ellison's net worth. Pretty historic day when it comes to how much he's made today. Closing bell will be right back. Quick programming note, do not miss a CNBC exclusive Goldman Sachs CEO, David Solomon. That's coming up 4 p.m. Eastern on overtime.

Up next, here on closing bell, shares of trade desks sinking as we head toward the bells. What's behind that drop coming up? That and much more when we take you inside the market zone. Stay with us. We are now in the closing bell market zone. CNBC, senior markets commentator, Mike Santoli, here to break down these crucial moments of the trading day, plus Julia Borsden on what's behind this big drop in trade desk. And Robert Frank, looking at the big money in Oracle's big move.

First up, Mike, we've lost some momentum. We hit record highs on the SMP and the NASP. felt like it was a good setup between the Oracle rise and then the sort of renewed enthusiasm around AI and then weaker, lower inflation, which is also a good setup for the Fed. Absolutely. You know, there's a concept in sort of technical market jargon

called news failure, which is when you have news that hits the market and you think it should actually drive a particular price response and it doesn't. I would not declare that we have a news failure here, but it definitely is a little bit of a signal that, in fact, a lot of the good news, the benign bullish case, which continues to more or less be confirmed by the data, by a lot of these corporate results, is to some degree already baked in.

I don't think that means, you know, a price for perfection or anything like that, but simply that the market is very selective in what it's rewarding and what it's punishing on a given moment after this run we've had since April. We haven't had an appreciable pullback in August, September, as many would have expected. We've kind of just enabled ourselves to go rotate and go sideways. So, you know, I think you're on alert about that. And as you know, the move and bonds have been so dramatic going into PPI that even this little bit of downside and yield we've gotten is still telling you that the sort of disinflationary argument is sort of, you know, prevailing.

Yeah, 4% on the 10-year. And still a great day if you own any of these AI stocks. Broadcom up 9%. All the energy stocks powering the data center boom. Let's hit the trade desk. It is a loser today, down more than 10% here on some new. Julia Borsden, news that shows the growing competition from Amazon's platform. Yeah, that's right.

Shares down over 10% in reaction to this news that indicates that Amazon's ads platform is a growing rival to the trade desk. Now, this morning, Amazon ads and Netflix announced they're partnering for Amazon to offer programmatic buying on Netflix's ads platform. Now, this gives advertisers using Amazon's DSP access to Netflix's ad, inventory. Now, Netflix is also partnered with the trade desk, along with Yahoo and Microsoft, but this news feeds growing concern about Amazon eating into the trade desk's market share. Now, ahead of this news, the trade desk was already down. Chairs were off about 4% this morning

on a downgrade by Morgan Stanley cutting its price target. Morgan Stanley writing, quote, Amazon's DSP is expanding faster than expected, and the key questions now are whether restructuring can meaningfully re-accelerate growth in the near term and whether the trade desk can defend its leadership in connected TV against competitors, including Amazon. Sarah? Okay, Julia, thank you very much on trade desk today. In meantime, Oracle, the move of the day, Larry Ellison, topping Elon Musk to become the world's richest man. Robert Frank has been tracking the fortunes here, tick by tick. What a day. Sarah, what a day and what a night for Larry Ellison. and Ellison adding over $100 billion to his net worth just over the past 24 hours.

That is, of course, the biggest one-day gain in history and brings his total wealth to around $400 billion. Now, he has rarely sold shares since co-founded the company way back in 1977, so he still owns 41% of Oracle. And at 81, it is his first time topping the rich list. He posted on X back in July that he plans to devote most of his fortune to the Ellison Institute, of technologies. This is great for philanthropy. That institute focuses on climate change and poverty fighting disease. Now, he may not top the list for long. Musk has some big pay packages coming up. That's both from the 2018 one that is being fought in the courts and the new one that we just heard about last Friday. Either of those could eventually make him a trillionaire, Sarah. So for now,

though, Ellison, enjoying this nice day for the first time at the age of 81 as the world's richest man. Yeah, not too shabby. And then you were also saying Saffra Katz, who's the CEO. Obviously, she has a, she's having a good day, but she has, she's could have had a lot more. She did not sell. She could have had a better day. You know, she sold over $5 billion worth of, sorry, $1.8 billion worth of shares and then another $700 million beginning of year. So two and a half billion dollars worth of shares that she has sold this year as part of a share sale program. She has and shares in the company still nothing like Ellison, but yeah, she's probably wishing she hadn't sold all those shares way back in June and July. I mean, that is so crazy. And when Ellison has held from day one, it's more than 40% of the company.

It's wild stuff. Robert, thank you. Robert Frank. Mike, as we head into the bell, I mean, I guess the risk here is around CPI tomorrow. We'll get this consumer price data. I don't know. It has to be pretty bad to cause a rethink. and what the Fed's going to do, doesn't it, in terms of higher inflation? Yeah, I do think that's the way to think about it. I mean, we were saying this on Friday, remember, like how great would the jobs number have to be to really knock loose this notion that we're getting a rate cut of at least 25 basis point next week?

I think it's similar with CPI. And I don't think that you can really extrapolate the downside surprise and PPI into the CPI numbers, a lot of calculation differences. But I do agree that essentially what we're talking about is the speed and depth of the overall rate, cutting campaign that's about to start not so much what happens next week. Maybe if we get a hotter number, it cools off this notion of a 50 or 75 in September. So it could complicate the picture. But I think at this point, the market's locked in to this notion that the Fed is

going to be taking the pressure off on the short end on rates at the same time that earnings are still growing. The AI theme is still rewarding investors in the right places. And the overall economy despite the soft labor market is kind of hanging in there based on the tracking numbers. In fact, there's a case, as you know, for a sort of reacceleration in some activity in the last few weeks, too. So it's a pretty benign scenario, and the big fight now is how much of that is already priced at. And I guess if it's a weaker inflation and lower inflation report, will we get dissent in favor of 50 basis points? Will that become more of a chatter to have a double interest rate cut? It's in the mix, for sure, that we'll be talked about if we do get a soft

member of the moment. All right, Mike, thank you very much. As we head into the close here, the downbound 200 points, you do have some tech losers weighing on the market, like Apple, Amazon, Netta, Netflix. They are not up despite the third in Oracle, in Broadcom, Invidia, talent here. A very good day for that group. It looks like the S&P 500 is going to close positive, up 3 tenths of a percent. Earlier in the day, record highs for the NASDAQ and the S&P. That's it for closing bell.