Closing Bell - Closing Bell: 9/25/25

Episode Date: September 25, 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. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Brian, thanks so much. Welcome to Closing Bell. I'm Scott Wobner, live from Post 9 here at the New York Stock Exchange. This make-a-breakout begins with questions about this rally, whether it's increasingly vulnerable and what that might mean to your money. We'll discuss that with our experts, including Tom Lee and Adam Parker. Can't wait for that. Take a look at the scorecard. In the meantime, with 60 to go in regulation, we're lower across the board, have been all day. AI-related trade under pressure again. That has been the trend this week, as you know. Yields, they're higher again, and that's wait a bit on the next. NASDAQ and the Russell 2000. There's your move in yields. The 30 year coming off the high, but the five, the 10, two-year higher has been too. Russell, of course, especially sensitive to higher interest rates. The VIX, up again, above 17 at last check, dipped a little bit

below that now, but still a mover to keep an eye on. Banks are one of the few bright spots today, though private equity names are lower again in what's been in the especially difficult whole week there. It does take us to our talk of the tape. What has the AI mania? Has it gotten out of hand? Here's what the billionaire investor Ken Griffin of Citadel said on CNBC earlier today in an exclusive interview. There's obviously echoes of the dot-com bubble in this moment. All right? And let's take a step back. The dot-com bubble, there was a huge amount of capital that flowed into what today we referred to as the internet. Now, the true winners and losers were not readily identifiable at the start of that, of that whole bubble. But move forward 10, 15, 20 years later, there's no doubt

that the world was radically transformed by that moment in time. All right, that's Ken Griffin. Now let's welcome in Fund Stratt's Tom Lee, a CNBC contributor. It's good to have you back. I know you love this trade. But what do you make of what Mr. Griffin had to say? Well, I agree with them. You know, we're in a period where there is a super cycle and exponential growth opportunities within AI. But it doesn't mean every company that has elevated valuation today deserves to actually have the capital. And that company may not even reinvest that capital properly to be a survivor. So I agree there is going to eventually be a shakeout.

But I think valuations, strangely enough, are actually pretty reasonable today compared to 1998, because, you know, 1998 was that liftoff point before that final 18-month surge. And I'd say the best benchmark is Nvidia trades at 26 times forward earnings. Cisco, at that same exact moment, was at 60 times, and Cisco's PE peaked at 210 times forward earnings. So, Nvidia, to me, is still a bargain at 26 times. it's cheaper than Costco and Walmart, which are close to 50 times forward earnings. Sure, but all valuation isn't created equal.

And I'm not especially clear as to whether Mr. Griffin looks at the valuations of an Nvidia, for example, and says, well, that looks a little out of hand. It reminds me of late 90s activity before the dot-com bust happened. And as much as he looks at other names which have gone, you know, parabolic in and they're related to AI. And that's where he says, whoa, whoa, whoa, whoa, whoa, whoa, we're placing way too many bets on what might happen in the future. We think we know what's going to happen in the future as it relates to Nvidia and some of the other hyperscalers. But it's a whole host of other names that have literally ripped over the last three months at least that might bring investors a little bit of pocket. pause? I think that's correct, Scott. There's a difference between a company being scarce in the public market. Like, let's say there's an IPO of a company, and it's the only way for you to get

exposure versus that company being truly scarce to the ecosystem. So I do think investors have to discern, is this company going up a lot because this is the only name out of a possible bevy of private companies, or is this the company truly unique? and one that as so scarce, I've got to give it the N equals one valuation. I mean, I think he looks also at a stat like J.P. Morgan Asset Management's Michael Sembalist brought to us today from his report. And he's good at what he does, okay? Quote, AI-related stocks have accounted for 75% of S&P 500 returns, 80% of earnings growth, and 90% of capital spending growth since ChatGPT launched in November.

of 2022. Now, some would say, well, obviously, and all of that might be justified, but those are large numbers. Those are really large numbers that have carried a boatload of the weight of this move in the market since then. Yeah, and that's a moment in time, Scott. I mean, just to give some perspective, Nvidia is about 8% of the S&P 500 market cap weight, but it also has 7% of the the earnings. So it's not necessarily distorting equity valuations. And in terms of what companies are excited about, you know, if companies are saying that AI is something where they're actually allocating capital and many of course are seeing productive gains, I think it's justified that that would be what you'd expect to be the first wave of investment in spending is around

directly into the ecosystem. But of course, over time, we'd expect to that spending then to deliver productivity gains and other benefits. So that means if AI, and I'm comfortable with the idea it's a super cycle, we should see a broadening of the benefits and then also the broadening of opportunities over time. So it's probably a moment in time makes sense, but it should be broadening. I mean, I look at a stock like Oracle, for example, only to pick it out because it's up more than 30% this month. Now, it obviously had the moment around earnings where it added such a tremendous amount of market cap after that event. I bring it up, if only because it was initiated sell today at one firm on Wall Street,

in part because they suggest that you've got some really aggressive assumptions that are coming with this stock. Now, it's down 5% today because a lot of these names in what you would consider, the momentum basket, have rolled over a little bit. But the notion that the assumptions are so big that there's inherent risk in and of itself within that. Scott, I think that there is going to be moments where it feels like we're possibly topping. And today is coming at a time when we have this Oracle report and stocks are generally soft. But number one, I think it's always really healthy to see correction.

in a super cycle. But I do think it's really difficult for someone to actually ring the bell at the top. And in fact, I don't know, like if we look at Palantir or Tesla or Nvidia, I think that there have been, you know, 25 bell rings at the top at every waypoint along the way. To me, I think the real test is going to be that we see a day where investors are convinced there's absolutely nothing that is wrong with the thesis and it's bulletproof, and yet stocks make announcement announcements and they go down and companies actually have negative returns. I have not seen that yet. In fact, to me, it's reflexive to see that every time markets flatten out after posting gains, we have a lot of people declaring the top. To me, that's a really healthy sign that there was

very little conviction about this bull market, and I do think it's healthy to actually see skepticism. So I'm not opposed to seeing like these reports, but it's healthy. Do you think that equities are especially vulnerable here as we wrote in our intro today, as BTIG suggests they are the most since the April low? Do you feel the same? I should also mention it comes within the same context of commentary recently from the Fed share, who didn't go out of his way when he answered the question about the equity markets to suggest it's wildly overvalued, but nonetheless, he did say that stocks are fairly, highly valued. He could have said, I think they're fairly valued.

He didn't. He said they're fairly highly valued when he answered that question. You put that into the mix, too, when you consider your answer. Yes. Well, I have a lot of respect for Fed Chair Powell, but I don't remember the last time any FOMC member actually said stocks are attractively valued, because I don't think it's their job to comment on equity valuations that way. And if we think about where, again, market valuations are, I'd be very concerned if the most important stock, like NVIDIA, was trading at a multiple

that couldn't deliver returns. But it's the most important company in the world, 40% plus revenue growth, it's trading it 26 times forward earnings, which is hardly demanding for a company that makes a product that every single company in the world that is involved with AI actually needs. They can't replace it with anything else. So I don't think it's expensive. When you ask about April lows and valuation vulnerability, I think there's really two big differences. You know, one is monetary policy was actually quite tight in April. And the risk was actually the Fed wouldn't even consider intervening, and yet markets managed to stage a 30% rally.

Today we have a Fed that's not necessarily pounding the table that it's in a dovish cycle, but they've understood that they need to now use their hand to support employment. That's a sea change actually, and as we know, ISM's been below 50 for 31 months. It's the longest stretch in the history of the ISM index. I think if the ISM breaks above 50, that's a recovering confidence in capital spending. That would support a broadening of the economy, and I think that would be good for equities. Well, speaking of Fed policy, and you stay with me, Tom, for a moment. Ken Griffin also gave his outlook today for what he thinks the Fed will do after cutting rates last week.

The billionaire investor said he sees only one cut over the remainder of this year, outside chance of two, as inflation remains higher than the Fed's target of 2%. and may still get worse. The belief is that the inflationary impulse from tariffs has only passed about 50% through the economy at this point. So you see it coming? Oh, it's still coming. It's still coming, he said.

He also weighed in on the issue of Fed independence. Listen. If I were the president, I would let the Fed do their job and I would let the Fed have as much perceived and real independence as possible. Because the Fed often has to make choices that are pretty painful to make. And if the president's perceived as being in control the Fed, then what happens when those painful choices have to be made?

Joining me now is the Wall Street Journal's chief economics correspondent Nick Timmeros. It's great to have you back. Nice to see you. Thanks for having me, Scott. Seems like Mr. Griffin is aligned with many on the Fed right now. Maybe you'll get one, but there seems to be caution, expressed by many of the Fed speakers we've heard this week, including today Austin Gouldsby said, quote, I'm just a little uneasy with too much frontloading until we're sure that inflation is coming down.

Yeah, that's right. I think what you're hearing is there's a debate about whether you cut in December, you know, October seems priced in here. It's hard to see what would change the committee just because there's not that much data. And if there's a government shutdown next week, you know, who knows what data we're going to have in hand. So it feels to me like there's a debate around, do you do more than two this year? Do you do December? If you do three this year, what's your stopping rule, right? The Fed, when they're cutting, the question is, when do you stop? When you're holding, the question is when do you start either going up or down? So to me, that's the key question right now, is it going to take, you know, more deterioration

in the labor market for them to keep cutting, or do they need to see evidence that things are actually stabilizing before they go back on hold? Well, I mean, they're in an especially tricky spot, don't you think? And it's, I think, why the chair himself has gone out of his way to make it clear

when he says there are risks on both sides, that nothing is firm on where all of this is going. If they cut too much because they end up more concerned about the labor market and that spikes inflation, then they've caused a mess. That's right. You know, I still think the Jackson Hole speech was important. The shift at Jackson Hole was really the first time Powell came out and said,

we think we can treat this as transitory inflation as a base case and will have to be proven wrong. And of course, you know, no matter what you do, you're going to have to wait some time to see if your initial assumption was wrong. So, you know, how long is the Fed going to be comfortable taking that view, given, as, you know, Ken Griffin just said, it could be a while before we really see the peak, even if it's sort of a longer and flatter peak on the, you know, resumption of inflation pressures. So the issue there, I think, is what is the Fed going to see that's going to tell them you

could be nourishing a cycle of more persistent inflation as you continue to lower interest rates. Is it something in the labor market, the housing market, doesn't seem to be a threat here to reanimate price pressures. So where is that going to come from? You think that the Fed chair fears what Ken Griffin said earlier today. It's coming. It's coming when he talked about inflation from tariffs is just yet to show up in any meaningful way. Well, you know, you hear people say that it's coming with respect to more labor market fragility. So you're, you know, when he says there's no risk-free option here, look, in eight months or nine months or year, it's going to be obvious what the Fed should have done. But sitting here today, you know, a couple weeks ago, people were reacting to the pop-in jobless claims.

You know, you can find measures of labor market slack opening up if you look hard enough. And so maybe that's maybe that is where you should be worried right now. And then, of course, you do have this concern that inflation's been away from the target for a while. I think the key question, though, Scott, it's going to be what would actually nourish inflation pressures from a one-time increase in goods prices? Lastly, Nick, would you make of the Fed chair saying of stocks, they're fairly highly valued? As I suggested, I don't want to make too much of it. He didn't go out of his way to offer this up, but it is how he answered the question. And when he speaks about something like that, we listen.

You know, it didn't make much impression on me because this is something that's been in the Fed's financial stability report for a while now. They've been referring, at least the staff has been referring to asset prices, you know, risks around those valuations is notable. So it sounded to me like he was sort of repeating something that the Fed has been saying, really for several quarters here when it comes to the stock market. But obviously a lot of people glommed on to it. So, you know, maybe I missed something there. Well, you know, it's the Fed chair.

When he talks about the equity market, we glom onto it. Nick, I'll see you soon. Thank you. Nick Timmeros with the Wall Street Journal. Of course, Tom Lee is still with us. Let's wrap this, Tom, with your reaction to a little bit of what Ken Griffin said. If he's right, and we have one cut for the remainder of the year and that in his words, it's coming about inflation from tariffs, would your forecast for this market be wrong? Scott, if the Fed does one cut, I think that markets would interpret that in a good way in the sense that they'd rather.

see the Fed cutting into a strong economy rather than weak. So I don't think that that's necessarily a negative. But I think one thing that needs to be clarified, because I'm listening both carefully to what Nick said and what Ken said about inflation coming, there is this idea in Fed Chair Powell talked about it, which is that there's the imputed effective tariffs coming because these tariff costs have been absorbed, and now they're working their way to the consumer. That's what the Fed would call an imputed inflation rate. You know, the effect was already felt. The charges are in place, but it takes a while for it to show up in a statistical way.

That was exactly what happened with the housing prices. That housing prices surged in 2021 and 2022, but it became imputed inflation in 2023. We know that the Fed was lagging in its easing because of that imputed shelter inflation, But the reality is they should have been easing sooner, maybe not 50 initially. And so I think that we have to be careful. When the Fed's talking about that imputed effect, it doesn't mean we have to start a new hiking cycle just because it takes a while to show up. And I think that's why markets are going to see through that.

Tom, we'll see you soon. Thanks for being with us through our A block. That's Tom Lee of Fundstra. We're also tracking the big move today in CarMax, the worst performing stock in the S&P 500, which is why we wanted to tell you about it right here. Phil Leboe with the details of what's going on here, Phil. A terrible quarter, Scott, any way you look at it, because all of the key metrics, they missed. And if you take a look at earnings per share, revenue, unit sales, all of them were below expectations.

EPS of 99 cents. Street was expecting a buck five, revenue below expectations, vehicle sales down 4.1% compared to last year. By the way, that's wholesale as well as retail vehicle sales. But this is the stat that really spooked the street about CarMax and the results that they posted. Loss provisions for the quarter up 26.3% compared to last year. Clearly, they're not seeing the performance that they expected out of loans written in 2022 and 2023. It has some people saying, now wait a second, are we going to start to see even greater delinquencies out there? So we checked the data with Experian in their most recent report. It's at 2.54% down, that's an

increase from the second quarter of 2023. versus 2021, but Scott, go all the way back to the recession in 08, 2009, and 10, and people will say, well, everybody was, you know, delinquencies and defaults on loans. It was over 3%. So we're not far from there, but we are not at those 2008 and 2009 levels. By the way, there was a concern that this might be wider in terms of the used auto market, and that's why you saw a little bit of pressure on Carvana, AutoNation, Group. one. Most of those stocks, by the way, they came back a little bit more as the day went on.

The average used auto loan right now, $529 a month, Scott. Any way you look at it, not good numbers from CarMax. Yeah, well, this news, and speaking of loans as you did, coupled with the journal story earlier in the week, quote, Ford courts, riskier borrowers with lower rates for F-150s, just makes people stop and say, okay, what's going on here? Keep in mind, keep in mind with the Ford news in terms of the riskier borrowers. It's not like they're going out there with something they've never done before. They have done this

from time to time at the end of the quarter in order to increase volume at the end of a quarter. It is worth noting, but it is also not something that we're seeing for the very first time. Phil, thank you. All things autos. You bet. Phil LeBoe, appreciate you.

We're just getting started here. Up next, top technician Jeff DeGraph is back. He's got some new charts. He says there's a big opportunity. in the AI trade. Are enough people focusing on it? Well, we will next. Welcome back with U.S.-based AI stocks pulling back this week. Some say the better trade might actually be in China-based names now.

Joining me now, Jeff DeGraff. He's a Renaissance macro research chairman. It's good to see you. We've been talking about this on halftime a lot. You look at Alibaba and some of these other names. They look pretty good. You suggest from the charts. Yeah, 100% Scott. And I think, you know, unlike what we're seeing here in the States, which these AI names have been leadership now for, you know, two or three years, you're just seeing these big base formations in China start to break out. So you can make the case that they're really just starting. this journey after these long consolidations and, you know, frankly, a bare market that went on after the 2020 peak. So I think they're set up really, really nicely. Obviously, I am all for the U.S. winning the AI war, but certainly we haven't won it yet, and you can see that

in the charts, that the tech stocks, the Chinese tech stocks, relative to the U.S. tech stocks, are right there. They're performing very, very well with the Russell won. They're performing well with our tech as well. So, you know, I think there is this, instead of a Cold War, a compute war going on, and it's neck in neck at this point. I mean, investors are going to always, not always, but they're going to bring up the issue of can you trust this trade? What looks great today may not look great tomorrow. Can you trust investing in China? Just given the current environment, there was a, it's not investable moment that seemed to have lasted for the last couple of years until now. How do we deal with that when we just look at charts that look

okay? Well, I think you have to ask, is it in their own self-interest to have those investable or not? And I think it is. It's in their self-interest to at least compete on the AI front. It's, you know, obviously politically, it's in their interest to stay in power. And I think all those things are above and beyond kind of the rule of law or some of the concerns. that are here. And keep in mind, Scott, those concerns or that narrative that China's uninvestable really started closer to the bottom than the top, right? People didn't worry about it when they were making money. And I think that's one of the dangers is that you can create a narrative to kind of fit what's happened to price. And I'm afraid that that's what's going to happen

here is that, you know, these stocks will double or maybe even better. And suddenly people won't care about is it investable because they've missed out on it. So I think that's a healthy skepticism. view that in light of the charts as just another reason why these things can move and be pretty substantial from here. But they've are like Baba is a perfect example. We have it on the screen. Guys, let's put it back, please. The move has been parabolic. Look at it. I mean, especially as we've entered the latter stages of the summer and into the fall, a move that's taken the stock up, you know, it's a double year to date. You're suggesting that it can go up a lot more than we've already seen? I don't know how good your guys are. If they can pull up a three-year chart,

I'm going to tell you, I think you can double. I think you can double in the next 18 months. So I think this is just the beginning of a huge, huge move that goes back. And if you use it on a pair of, I'm sorry, in a logarithmic scale, it looks a lot better. It always looks more extended when you use an arithmetic scale. But, you know, if we take this back, you're going to see those old highs and they're basically a double from here. And I think you've got to look at challenging those old highs from here. That's how good they are. Not only can they do it, they can do it right after you say it. We'll see you soon. Jeff, thanks. Jeff DeGraff.

Thank you. We have breaking news out of Washington. Amon Javers has that for us. Hi, Amon. Scott, Lisa Cook's side has responded with a brief in the Supreme Court just a couple of moments ago posted on the docket. And what Cook's attorneys here are saying is that the president's stay application. Remember, the president is looking to try to force Lisa Cook off of the Federal Reserve Board while this case is being argued before the Supreme Court. and he wants to stay from a lower court ruling.

They say the president's stay application asks this court to act on an emergency basis to eviscerate the independence of the Federal Reserve Board. For decades, this board's insulation from direct presidential control has allowed the American markets and economy to thrive. And as the court recognized earlier this year, the board's independence is uniquely entrenched in the nation's history and tradition.

There's a line here, Scott, this is a 51-page document, so I'm not going to read it all to you. But there's a line here that might be interest to investors, particularly focused on financial markets and the application of this case to financial markets. They say, finally, a stay from this court would signal to the financial markets that the Federal Reserve no longer enjoys its traditional independence, risking chaos and disruption. So that's the argument from Lisa Cook's side, which is that this is improper on its face

and it risks economic chaos if the president is allowed to move forward. And it follows Scott, that briefing that we saw earlier. earlier in the day from all of the living former Fed chairs, an unprecedented document, also arguing that Lisa Cook should be allowed to stay on the Federal Reserve Board while this case is adjudicated, Scott. All right, Amon. Thank you very much for the update there. That's our Amen Jabbers, North Blonde of the White House, as always.

Up next, the latest big deal in the NFL, yet another team selling a minority stake at an eye-popping valuation. The details are coming up. The bell is coming right back. We're back on the We're back on the bell. More big deals today in the NFL. Robert Kraft agreeing to sell a stake in his New England Patriots at a $9 billion valuation.

CNBC senior sports reporter Michael Ozanian is here with more. This was kept really quiet. Yeah, this one really flew under the Raiders, Scott. And yet we're seeing yet a. new record for another minority stake sale in an NFL team. As you mentioned, $9 billion for an 8% stake in the team. That's an

incredible valuation. As you and I know as football fans, it's been a while for the Patriots, even though they're tied with the Steelers for the most Super Bowl wins in football history. The team hasn't been quite the same since Tom Brady left. I think there's something

very important we need to point out here. As opposed to most of the other LP deals of NFL teams. This is shares, primary shares. In other words, this is new capital that's being given to the buyers of this team. So the cash that the Kraft family is getting from this sale, they're not putting in their pocket. It's going on the balance sheet of the Patriots. So the post-money valuation of the Patriots is going to exceed $9 billion. And this is money they could use if they want to renovate Gillette Stadium, which they own, or for operations or anything

want to do to help the football team. I mean, that's why these types of deals are so transformational to these owners who look at their stadiums as outdated properties in, you know, reasonably short order. And rather than having to go to the public for, you know, a tax item from a jurisdiction, they have capital at the ready that doesn't have to, frankly, come out of their own pockets to get projects done. No, that's a great, great point, Scott, because in this particular case, the Patriots privately financed their stadium.

And they also own the Major League Soccer Team, the New England Revolution. So it houses two professional sports teams. They've spent a lot of money, I think it was about over $230 million, finishing at one renovation in 2023. But you continually have to renovate your stadium and modernize it. because if we go into the age of technology and people wanting to, you know, be on their phones all the time

and, you know, you want premium hospitality and lounges and all these things you're always investing in in your stadium. You need to keep it modern to be on the top in the NFL in revenue. So this money coming in will be several hundred million dollars will be very useful to the Kraft family.

So lastly, we've been talking this week about the potential of the NFL trying to renegotiate its media rights deal years before they had the opt-out available, right? How does that factor in for you, when you're thinking about the overall valuations of these franchises, you're going to have to consider the possibility of some large numbers earlier than maybe you thought, right? Yeah, when I did our valuations at CNBC a few weeks ago, I already knew, you know, talking to people in the industry that the NFL's rights were way undervalued. They were going to get a huge increase. Whether or not that increase started two years from now or three years wasn't that big of a factor.

So that's why when we did our valuations, you know, we had the Patriots at $9.25 billion because buyers are going to look at those rights that you mentioned as being undervalued and they're going to discount and get the present value of those cash flows. And so it's going to be interesting what those rights come in. Now, if they have a huge upside surprise like the NBA did when they did their rights, you know, we could see the NFL valuations go up significantly again next year or the year after. Yeah, it's amazing, which means you're going to be a busy man in the months and years ahead, which is good for us.

Mike, thanks. Thanks, Scott. Mike Ozani. And up next, playing the pullback stocks heading for a third straight day of losses now. We'll talk to Adam Parker of Trivarian. He'll tell us where he sees things going from here. Welcome back, the major average is heading for the major averages heading for their third, day in a row here with where he sees the market heading now trivariet research and cnbc contributor

adam park it's good to see you hey scott how are you does that smile match how you feel currently about the stock market or are you a little concerned that we might be vulnerable the smile was because i was happy to see you the vulnerability i think is look what am i worried about i'm worried that you know when i do my meetings now people who were cautious six months ago are bullish, that it's hard for people to articulate a bare case, meaning I can tell you what I'm worried about, but it won't be something I can preposition for, meaning, yeah, sure, the Carmack's auto loan number, it's a little worrisome. If these are MasterCard slow, if 90-day credit card delinquencies grow, we can point to things that contemporaneously would make

us worry, but people are struggling to point out things that proactively make us worry. One of the things that I've learned doing this for all this time is there's two things that are always in place when the market sells off. One is hubris and two is debt, right? You get arrogance run am up, crazy stuff happening there, and you get too much leverage. On the margin, I'm a little bit worried about some of the debt stuff coming in. You look at Oracle's big number. There's some other things that are happening. I don't think it's time to say, hey, this hyperscale cap-x is phony, and I don't think that's right. But I do know everything cyclical, and the whole debate in my meetings down here this week, et cetera, has been, how am I going to time when I get worried

about this investment. My answer is not yet, but it'll be in the next two years because everything is cyclical, not structural. Because you're having those types of conversations, does that suggest that the AI trade, sort of everything hinges on that, and if that cracks, we're in trouble? I mean, you pointed it out earlier in the show, and I think the challenging or worrisome thing if you're a portfolio managers, all of the gross teams are correlated. What do I mean? Electric Pacean, Industrials, Eaton, Power, Consolation, Vistrigi, even over, semis, NVIDIA, and the group, and then alternative asset managers, right?

You said they're struggling. They're all the same trade. And I think that's the biggest problem is so much of the market cap and the momentum or around what you think are in different sectors of the market, but really are associated with the AI trade. I think that's the biggest risk that you get fears about the productivity. and you need some proof cases. On the contrary, I still think that these current fears aside,

that the two things that are the tenets of the bull thesis are in place. One, the distribution of outcomes for the Fed is skewed to being more dubbish. That's usually supportive of risk-taking. And two, that we've always known that AI productivity was gonna be 26, 2027 probably, and it's still too early to fade that dream at this point,

that that'll ultimately be what buoys people. So what do we need? We need it next year in 2026, some cases from Walmart or McKesson or other businesses that have a lot of revenue and low margins and lots of employees telling us that they're being more productive. If that's in place, of course, we'll end up at a higher place than we are now. But I am a little bit worried that we will get a first half of 2026 concern if we see more debt and more arrogance come through. So that's sort of the balance here as we try to thread the needle. I mean, as we continue to get these headlines of, you know, we can just frame it as the president versus Lisa Cook, where does Fed Independence factor in to how you see the current environment?

If it ends up that the Supreme Court says that the president has the authority to fire Lisa Cook, is there an impact in the market one way or the other? How do you assess that? I try to think about it as a distribution of outcomes, meaning what could happen under different? scenarios what probability do I sign to each scenario and when I kind of do that thinking it makes me think the skew is to more dubbish independent or not it just seems like we're gonna end up with folks who are more duffish one thing I know I won't fight is balance sheet expansion so if they get that if that

changes we'll have to get you know even more bullish but I think right now that bias is to be a little bit more skewed to dovish from where they are now and you know the 10 year yields been very stable I think there's a difference between steep of the curve where the economy is great and the 10 year yield backs up versus just the front end comes down. So I don't know. What I'm worried about, yeah, sure, I'm worried as an American about that. But I'm not as worried about it from that risk-taking perspective is I think the skew is more dullish and that's probably good for U.S. equities. I mean, if you worry at all about a backup in yields, which are up since the Fed cut. Be quick,

if you could, please. I'm going to say no. No. Okay. Adam will see you soon. Hopefully back here in person. Great to see you. Yeah, you two, AP. See you next week in person. Okay, look forward to that. All right. Up next, we check the biggest move is into the close today.

Christina Parts of Nevelos is standing by with that. I'm standing by, and I'm smiling. A major chipmaker exploring big money partnerships as pricing pressures mount. Plus, quantum computing showing promise in bond trading as Wall Street tests next generation tools. They're coming for your job. Details next. All right, 10 from the bell back to Christina. And now for the stocks that she is watching, top of your list is what?

Intel, because there's some news jumping on a report that it not only approached Apple, but now TSM about investing in the chipmaker. The Wall Street Journal saying these chats were already happening before President Trump showed an interest in Intel just last month. Additionally, I think this is important. No one's really mentioned it. There was a Digi Times article saying that Intel plans to raise prices of its processors by more than 10%. So you saw the news first about Apple come out yesterday afternoon and then midday for TSMC shares up 9%. Meantime Oracle, though, sliding after Rothschild and Co. Redburn initiated the stock with a sell rating.

Analyst over there are saying the market is just overestimating the company's contracted cloud revenues. And so that's how you're seeing shares down almost about 6%. Also down with the greater AI unwide, but up 77% on the year thus far. Lastly, HSBC announcing its trial with IBM's quantum computer. computers, and it's showing promising results in predicting bond trade fulfillment. The algorithm saw about a 34% improvement compared to traditional methods, maybe people, IBM jumping, 5%. John Ford almost jumped on the shot on set for its best day since April.

All right. You missed it. He was right here. I believe you. I believe you. Thank you very much, Christina Ports and Nevelas. Up next, we'll get you set up for Costco numbers. They come out in OT.

We'll take you in the market zone next. We're now in the closing bell market zone. CNBC senior markets commentator. Mike Santoli is here to break down these crucial moments of the trading day. McKenzie Segalos on Amazon's multi-billion dollar settlement with the U.S. government and Melissa Repco, setting us up for Costco results in overtime. Mac, you first on Amazon. Amazon. Yeah, those shares trading lower after the company agreed to pay $2.4. $25 billion to settle federal trade commission allegations that it duped users into paying for prime

memberships. Now, the surprise settlement comes just three days into a trial in Seattle, sparing Amazon from a jury verdict that could have carried even larger damages. Now, under the deal, Amazon will pay a $1 billion civil penalty and refund $1.5 billion to about $35 million impacted customers. That's $51 a piece. Now, Amazon admitted no wrongdoing, but agreed to new requirements around transparency and easier cancellations. The penalty is among the largest ever imposed by the FTC, but at just 0.1% of Amazon's $2.4 trillion market cap. It is a drop in the bucket.

Still, investors are not happy. Those shares down just about 1%. And Amazon still faces an even bigger antitrust case headed to trial in 2027. McKenzie, thank you very much. All right, Melissa, tell us about Costco. Most important to look for is what? Yes, hey, Scott.

So Costco is going to live, the latest, on its business, of course, and also the U.S. consumer. The Warehouse Club is known for bulk items, cheaper groceries. But interestingly, it's growing digital sales, and it's attracting younger members with its wide range of merchandise. It's also on track to open about 27 new clubs this fiscal year. Yet even with that growth, Costco isn't immune to tariff pressure. About a third of its sales come from imports. And last quarter, the company said it rushed orders to the U.S. to get ahead of tariffs and rerouted some imports bound for the U.S. to clubs in other parts of the world. Shares of Costco have jumped 180% over the past five years. Yet so far this

year, Costco's trailed the S&P 500. Same store sales are growing, but they've decelerated for the past two quarters when you exclude gas and foreign exchange. And with high valuation, investors bar is high too, Scott. Melissa, thank you. Melissa Repco, bring in Mike Santoli here. Do you have a thought on Costco? These comps decelerating are important to watch. You watch this stock. I do. And really, it got arguably overinflated in the mania for mega cap quality. It definitely was at basically its top premium to the overall market and to things like Walmart for a while. And it really has had a pretty significant rolling over there in terms of bringing that premium back. So it does seem as if, you know, that sort of quality trade and the idea that it was kind of this all-weather name.

I don't think the fundamentals have really deteriorated very much, but people are less willing to pay for it. It's also seen as maybe just kind of not as much in favor politically. I don't know that that's really borne on its business, but that seems to me what's undercutting it. Yeah, what else sticks out to today? All sectors red, but energy. Yeah, exactly. I mean, look, the market has had every excuse to have a more meaty pullback this week. It came in overbought.

You obviously have the seasonal weakness. A lot of these technical upside targets were hit, but it's really not an across-the-board retreat. It is just still kind of rotational. Things have stayed orderly. You do see some of the Fed cut beneficiaries giving back some gains. So you have the Russell down 1%. You have regional banks on the defensive. Homebuilders are getting hit as yields leak higher.

So to me, it's more just a general cooling off, a rethink of how far we've come in this market based on the known catalyst that we've already kind of digested. And from here on out, it's kind of nip and tuck in terms of the interplay between how much is the Fed going to do, how strong really is the economy, and we did get that response today from the upward revision of second quarter GDP. That's old data, but it definitely showed that the baseline economic growth coming into the second half of the year was pretty good, and the market

kind of registered that in higher bond yields and less fed, at least in terms of what it's anticipating for the rest of the year. Meanwhile, just cleared away a lot of the froth. I think the best case scenario is we reset sentiment here, get some of the crazy stuff in line. Michael, thank you very much. Mike Sancholy. The bell's ringing. Some of the frosts coming out of certain areas in the market today. We'll be down across the board.

Dallas and T.M.N.A. and the Russell. It does it for us. The O.C.