Closing Bell - Closing Bell 9/26/25

Episode Date: September 26, 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.

And welcome to closing bell live from Post 9 at the New York Stock Exchange. I'm Courtney Reagan in today for Scott Wapner. This make or break hour begins with a strong Friday finish. Stocks pushing higher as the latest read on inflation gives investors new confidence that the Fed remains on track to cut rates two more times this year. Just ahead, we will hear from the Wharton School's Jeremy Siegel. We'll get his take on today's PCE report. But first, your scorecard with 60 minutes to go in the trading session, you can see the major averages are higher. the Dow leading the way higher by eight-tenths of a percent, S&P 500 higher by six-tenths of

percent, and the NASDA composite higher by four-tenths of a percent. Every sector in the green today, except for consumer staples, consumer discretionary leading the way. Bon yields holding steady following that inflation report that we are going to talk about in just a minute, because we do want to focus there for the talk of the tape. So did this latest wave of data, just give the green light for more gains ahead? Let's ask Wharton School Professor of Finance and Wisdom Tree chief economist Jeremy Siegel. Professor Siegel, what was your take on the report today? Obviously came in line as expected, but year-over-year,

inflation at the headline up 2.9 percent, still above the Fed's target rate. Yeah, most certainly, but the news was good. It hit all the targets, nothing, no upside surprise. And yesterday, strong economic data, I think that both on the trade deficit going down and on the durable goods report, and I think all forecasters have now raised their GDP estimates for the third quarter. So with tame inflation, stronger real growth, I mean, these are all good signs for the stock market. And so you would call inflation tame because of the month-over-month number?

Well, yes, the month and over-month number, and I do expect the tariffs to cause a bump in inflation. But I think that the Fed has to look beyond that because tariffs are really like a tax. And, you know, that's not a sign that there's too much demand for goods in the economy. That's what the Fed has to look out for. Too many people want to buy things that are in short supply. But if prices go up because of a tax, that's something that the Fed should back away from. So X, the tariffs, I actually think the inflation numbers are coming in better than I and most others had anticipated. So earlier this week, it was a couple days ago now at this point. I think Michelle Bowman made some comments about thinking the Fed should actually de-emphasize inflation.

What do you make of those comments? Yeah. I mean, I think because of how much is going to come from tariffs, that's a noise that we don't know. And as a result, is that the information in the inflation news about permanent inflation, what the Fed should be concerned of, is not as good. Yet, now, we have the data on employment. It's been a lot of question about, you know, how good is that data, but at least that that doesn't have the same type of problems with a tax on it

the way that we do with the goods on the inflation front. Of course, you know, we all know the government shuts down that all important employment report Friday. Are we going to get it or not? I mean, you know, next week is an important week. Last week of the month, a lot of data comes through. That's hope that we can get a settlement there. Yeah, absolutely. That is something that would be sort of key for the market and investors that we would lose if the government does indeed shut down or stay shut down for that long.

You mentioned GDP. I'd like to circle back to that. We were talking about tariffs on goods, but the GDP numbers for services. I mean, pretty healthy spending there as well. Yeah, I mean, the GDP, now, we had a big increase in the estimate on the second quarter, but remember, the first quarter was negative. So actually the first half of this year was under 2%. Now, Atlanta Fed thinks this third quarter is going to be in the high threes.

They tend to be a little bit optimistic. Goldman Sachs thinks it's going to be sort of in the mid-toes. That's still decent growth. It's not runaway growth by any means. And I really think this fourth quarter is a real test for the whole tariff hypothesis, because we know how much retail spending goes on in December with the holidays. You know, I mean, like the firms, I think retail firms make all their profits in the month of December and they're going to hold even barely on the other 11 months.

So we're going to really, I mean, I think this fourth quarter coming up is really going to be the important tale about how much do tariffs really going to impact. consumer spending. Absolutely. So then in the meantime, before the Fed is armed with any of that information from retailers and from the full impact of tariffs, we think they're going to cut. I mean, it's very, very rare, only a few instances, I think, in history where the Fed cuts and then pauses for a while. So we think the cuts are coming, but does it feel appropriate to just stay with 25? Is 50 off the table at this point? What did they do in the vacuum of information about the impact of tariffs that's still, we believe, not fully baked?

Well, I think there's three things that I argue for a continuation of the cut. Certainly, you know, payroll growth has come way down. I mean, the estimates for next Friday only 50,000. Remember, we used to be 15, 200,000, even 300,000. And also the fact that in general, short-term interest rate should be about a percentage point below long-term interest rates. And we have, well, we have the 10-year at about 4-10, 4-15, and that does argue for trying to, to target the low threes on that. And furthermore, what, you know, variable that I always look at, money supply growth has been sluggish, which means that I don't see really that this is anything like an inflationary surge that we saw in 2001 and 2002 that got the Fed and the economy in so much trouble. So for those three reasons, I think a 25 basis point cut

in the next two meanings is still appropriate. Okay, hang on with us right here for a moment. Professor Siegel. We are watching two other stories out of Washington. We've sort of mentioned some of them. President Trump announcing a new round of tariffs. Simon Javers is standing by with the latest. But we are going to start with Emily Wilkins because that clock is ticking closer to a government shutdown, as we just mentioned. Emily, where are we right now? And Courtney, I mean, right now we have less than five days to go before a full government shutdown. And there really does not seem to be a solution coming before then. Both sides have really dug it. dug in. And look, we know from past shutdowns that there will be wide-ranging impacts and they will only get worse the longer the shutdown goes on. But here's a little bit of what we expect. So the shutdown, if it begins Wednesday and continues to Friday, that means no jobs data come Friday. If the shutdown goes on for longer than that, you're going to start seeing delays and loans to small businesses and farmers. There will be a slowdown for the ability for companies to

go public, as well as there will be no pay for federal workers and contracts. Plus, since the U.S. national parks and monuments are also going to be shut, the U.S. Travel Association is estimating that the travel industry is going to lose $1 billion each week of the shutdown. Remember, this shutdown, it could be different than any we've seen before because the White House is now threatening massive federal government layoffs that could impact hundreds of thousands of employees. We don't know the exact number. But at this point, Democratic leaders, including House Minority Leader Hakeem Jeffries, have really downplayed that threat. The administration has been engaged in the mass firing of federal workers since the beginning of the year. The beginning of the year.

So the fact that they are threatening to do more of that simply relates to what they were already going to do and intending to do. The Senate is currently poised to take their next vote. on preventing the shutdown on Monday night. It's not clear at this point that they're going to get the 60 votes needed. Remember, they will need Democratic support to move that over the finish line. And at this point, there's just no sign that it's there. Courtney?

Well, Emily, thank you very much. We do appreciate you following the drama for us there. And now to Amon Javers. He's gotten more on this new round of tariffs that we first heard about last night, Amen. Yeah, Courtney, a White House official tells CNBC that the United States will honor specific caps that were agreed to in bilateral trade deals negotiated by the president this year, even as President Trump announces that new round of tariffs on a slew of product categories. So that means that the EU and Japan will both get to keep 15% caps on the pharmaceutical tariffs

that they negotiated into their trade deals despite the 100% tariffs that President Trump announced last night. And the White House says it will honor any other such specific caps that were negotiated into already signed trade deals. So to recap, here's what the president announced on social media last night. He said the U.S. will impose a 100% tariff on any branded or patented pharmaceutical products entering the country beginning October 1st, but that will not apply to companies building drug manufacturing plants in the U.S. And it won't apply to projects where construction has already begun. And separately, the president said he'll impose a 25% tariff on imported heavy trucks, also starting October 1st. And he cited National Security for new tariffs on kitchen supplies and furniture, announcing a 50% tariff on all kitchen cabinets, bathroom vanities, and associated products, and a 30% tariff on upholstered furniture, both of those starting on October 1st.

The president also announced so-called Section 232 investigations on Wednesday into imports of robotics, industrial machinery, and medical devices. Those investigations, Courtney, could be a precursor to tariffs on those products. as well. We'll have to wait and see. And, Amon, because of these that are brought in under Section 232, less of potentially legal recourse pulling them back like we've seen with some of the other tariffs? Yeah. You think of Section 232 as sort of going through regular order in the tariff process. It takes longer. There's a technical process that has to happen in terms of these investigations and then a finding and then the president authorizing tariffs.

But that gives him a much stronger legal footing to put these tariffs in place. Thank you, Iman. A lot to keep track of and interesting that those bilateral trade agreements will be honored over some sort of those higher rates announced last night. Let's bring it HSBC's Max Kettner and J.P. Morgan asset management is Jordan Jackson. Professor Siegel, of course, is still with us. Max, I'd love to get your take. I mean, obviously you are a global research strategist, but when we see these threats of the government shutdown, normally Wall Street and investors are able to sort of shake them off, it seems to be temporary disruption, but ultimately things settle out. Could it be different this time when you have a president like Trump in office, it seems like past history does not always repeat itself? That's true, but I think with government shutdowns, we've learned over the last 14 years. I think the first one was sort of the shock event.

It's probably very similar to what happened with tariffs, probably comparable to what happened with, remember five and a half years ago, COVID, the first wave, you know, we all freaked out, we didn't know what to do, first lockdown, you know, you have no idea what the growth impact is. It was the same this April with, you know, Liberation Day. So we kind of didn't really know what we deal with. And then, of course, came the second round of terrace. And there came the pauses and the kind of 90-day delays. And then that's when you start to see sort of the muscle memory kicking in. That actually people say, well, hold on, I can start looking through that because now I know what the impact historically has been.

So should I learn from that? Should I price it accordingly to what has happened in the past few years? And I guess, you know, it's a similar thing with the government shutdown really. When we look at the government shutdown, let's be honest, that sort of stuff is happening once or twice a year these days, right? And we're not really seeing a particularly strong market impact normally. Now, you could argue 14 years ago, the composition of the equity market was very different. I think that's what's also different these days is when you look at the SMP, almost 50% of the SMP, almost half of the SMP's market cap is actually directly related to AI. is directly related to that sort of mega theme.

And that's even the bigger question. Does a government shutdown really affect those kind of stocks? Does it affect really that kind of mega theme, even if just temporarily for a couple days a week? Not really. And the other thing, the final thing is, we know that, of course, with the government shutdown, the US Treasury has to tap normally the Treasury General Account.

Now, the Treasury General Account has been restocked by $500 billion from $300 billion to $800 billion. So it's a wash. It's flush with cash. So the reality is, going forward, that if we do see the government shutting down, even for a couple of weeks, and the TGAs or the Treasury General account, that liquidity is actually entering the system, is entering the real economy. It's both real economic stimulus. It's certainly a liquidity tailwind. So you can spin this whole thing around that actually it might be a bit of political uncertainty.

Fine. But what it does is, number one, it creates that political uncertainty, which means it probably dampens positioning and sentiment, because investors are a bit like, I don't know what to do. Not sure if I should really build more exposure now. No, I'm going to wait. So it dampens sentiment. That's really good. And the second thing is that liquidity tailwind.

Wow, fascinating. Jordan, thank you for joining us here. I'd love to sort of get your take on the market action today after we got the latest read on inflation, the PCE, the Fed's preferred gauge of inflation. Coming in as expected, relatively tame, let's say, month over month, although I look often at that year over year number. and at that 2.9% at the headline, definitely still higher than the Fed's target rate, but still market shrugging it off and moving higher. No, that's exactly right. You know, I think in this backdrop in which, you know, we'll continue to focus,

perhaps a little bit more so on the labor market than on inflation. A very much in-line reading, I think, was, you know, well received by the market. But I think we've got to be very, very careful here. When we look at the growth side of things, obviously second quarter GDP numbers were revised higher. The Atlanta Fedge GD Now Pracker has just below a 4% growth for the third quarter. And I think us as economists, we need to maybe soften this sort of growth slowdown that we've been calling for for the second half of the year, particularly because the bump higher that we've seen in some of the figures are driven by consumers. And arguably consumers are

still going out there and spending, even though we've got a much lower overall job creation. So, you know, on balance, you look at how everything is trending, it's going to be difficult for the Fed to defend itself continuing to cut rates for the balance of the year. You know, obviously the markets have baked in October and December, but if we get this government shutdown, now they don't have or have a delay in some of the data that we get reported, you know, October is still a bit of a bit of a wildcard if the Fed continues to ease. And I think that could be what sort of joltz the market and we get a bit of a bit of a market wobble over the near term. Hmm, really interesting. So, I mean, it does seem like the market obviously has baked in the Fed's cuts, maybe the next two. But after that, you're saying the Fed needs to be careful because there are some potential speed bumps. Well, it'll be difficult for them to justify, you know, continue to cut rates. Inflation's not where they want it at. And it perhaps could start to be inflected higher. What I will acknowledge, though, is that it does appear that retailers have been very hesitant to pass on price pressures onto the end consumer. They continue. sort of absorb those in overall margin pressures. And that also perhaps puts a bit of a dampening on margin growth estimates as you look for to fourth quarter, perhaps next year, next year earnings.

And then again, on the growth side, if the Fed continues to cut rates, you know, perhaps this is somewhat stimulated for the demand side of inflation. So they certainly don't want to be contributing to added inflationary pressures over the next couple of quarters. So again, I think I think October is, you know, hard to potentially justify. We'll see how the data evolves. But, you know, I wouldn't bake in or put a stamp on a clean set of cuts over the next several meetings. Interesting. Professor Siegel, I want to go back to, you know, we heard from Eamon Jabber sort of detailing these new tariffs that the president sort of first outline last night and then

we got some further details today. Amon telling us that these bilateral trade agreements will be honored. So maybe some of these countries will not be faced with 100% pharmaceutical tariffs if they have some other deal that's already in place. But we previously were talking about the impact to the consumer. I'm thinking about the tariffs on upholstered furniture and bathroom vanities and kitchen cabinets. That worried me, admittedly, when I first saw the headline, Mark, doesn't seem to care so much. What's your take on that specifically as we speak about tariffs?

Yeah, and that's why we have to be careful. There are a number of bumps. And first of all, the government shutdown, and from what I understand, to come to an agreement, that's only for six or seven weeks. I think another decision has to be made in November. And as I said, I really think the first serious price effects of those tariffs are going to be felt in the fourth quarter, in the holiday season. And so, you know, I mean, you've got to be careful about market psychology sentiment with low, you know, labor market growth, things could turn down. So, you know, let's hope these things get resolved. But, you know, everything, even though I think the bull trend is definitely still.

on, you know, there are potential bumps in the road going forward. And Max, give us some actionable, investable advice. So we sort of have laid out the whole macro theme, but also speed bumps, as you and others are pointing out. Where should you look to put money in the market if you were interested in doing so right now? So look, the first thing is that we're actually seeing the U.S. I think a lot of signs are the U.S. re-accelerating. So clearly what we, I think, how we started the second half, all of us, or consensus, was the US is going to slow down, you get to buy the rest of world equities over the US, short dollar, all those sorts of things, right?

So really going or pivoting away from the US. Clearly, none of that is working, let's be very honest. It is actually looking like, if you look at credit card data, if you look at loads of high frequency data, you clearly are seeing, there are signs of very clearly reacceleration in the US data, certainly against consensus expectations. We were talking about Q4. Well, Q4, if you look at consensus expectations, that only has a one percent. cent quarterly annualized number. So that to me, to your question, what that means is you want

to rotate actually back into the US and not just AI, not just tech. It doesn't mean I want to sell AI and tech. No, I want to stay long that mega theme, but at the same time, rotate into some of the cyclical sectors as well. Think your banks, your financials, your industrials, because what if we are seeing not just the services rebound, but also when we look at GDP numbers for Q4, consenters are saying there won't be any comeback of investment. And that to me makes no sense because if we have a little bit less economic policy uncertainty now, certainly compared to April, that actually there is a basis for perhaps some of that investment, not just an AI to come back. And that should be good not only for the banks, but also for the industrials. And it also, I think if you look across asset, every sort of scenario that I really can think of, whether that is continued concerns around Fed credibility and Fed independence, or whether it's things like, let's say, re-acceleration of growth, high nominal growth continued. Stackflationary concerns around tariffs.

All of those things argue basically for continued bull run in gold, but also continued underperformance of the 30-year bond. If you have stackflation, what do you do? You need a real asset hedge. You go long gold, you get short the 30-year. Same thing with Fed Independence and all these other scenarios. Yeah, the run in gold has been very interesting, especially as equities have been so strong.

Max, thank you so much. Professor Siegel, Jordan. We're going to have to leave it there. Lots of news on this Friday. And as a matter of fact, we got a little bit more. A big move in shares of electronic art. Steve Kovac has more on that for us. Steve, what's going on here? Yeah, and those shares are up. I saw it as much as 17 percent here. This is after a Wall Street Journal story, Courtney, that said electronic arts is nearing a deal to go private. This would be a $50 billion deal. That's $5 billion to give you some perspective there. EA's market cap at the close of the markets yesterday was about $42 billion. Now, the market said it sitting behind me here. They tell me this would be the largest leverage buyout of all time.

And the deal, according to the journal, is being backed by the Saudi Public Investment Fund and Silver Lake. Now, just a little interesting thing here about the Saudi private public investment fund here, Courtney, is they are enormously interested in making big video game deals. Earlier this year, you might remember that Pokemon Go game that went viral several years ago. They actually bought that game for $3.5 billion from the U.S. startup that was developing it. They also own, for example, Monopoly Go, a massive mobile game. And on top of that, they have a lot of business with e-sports and things like that. So enormous interests and money from the PIF investing and buying all these gaming companies.

That's also why you might be seeing shares of Roblox and take two interactive to other major gaming companies. They're on the rise today on the back of this news as well, Courtney. Wow, interesting stuff. Yeah, we're definitely off the highs maybe that we saw initially on that surge of EA, but still a really strong move. you very much for bringing us the latest. We are just getting started here on Closing Bell coming up next years of Tesla popping star analyst Dan Ives. He's making a big call on that name. He'll join us after the break. We're live from the New York Stock Exchange. You're watching Closing Bell on CBC.

doubling down on the name. Let's bring in Wed Bush Global Head of Technology Research, Dan Ives. Dan, you are getting even more bullish on Tesla. Tell us why. I mean, look, I think this is now going to be the start, probably the most important chapter of growth ever for Tesla. In terms of autonomous, I believe we're going to see 30 cities, you know, potentially over the next three to six months. And that's going to be the start. Because, Gordon, my view is that they will own 80% of the autonomous market. And that is not being factored into the stock. I mean, that's why I think this is $2 trillion, for starters. Ultimately, it will be a $3 trillion mark cap.

This continues to be, in my opinion, the most undervalued true AI play in terms of physical AI play out there. But how long is it going to take them to get to that type of market share and autonomous? Oh, I think as we go into later this year, and I think especially once we go through the shareholder meeting when Musk gets paid package and ultimately Tesla gets approved for the XAI, investment. I think investors are going to start to realize when this gets rolled out to another eight to ten cities over the next few months, and you start to see the scale of ultimately cybercabs, I think that's where the bell goes off. I think investors right now, there's still skepticism

because of the core business, which is actually stabilizing. We'll see that next week. But I think this is all about autonomous and robotics. I think this, along with Nvidia, the two best physical AI plays in the market. And Musk now is back to wartime CEO. And that's what you need in terms of this AI arms race. Wow. And so your target is going from 500 to 600. And I think the average analyst estimate is somewhere around $342. And you think that is all because of autonomous. Well, yeah, because I think when you look out the two, when you're doing a golden goose for AI, it's autonomous and ultimately it's robotic. And that's going to be optimist.

And I think Tesla right now is on the verge of what I think is going to be a period of hypergrowth. And I think that's something that's not being factored in. There's a lot of investors just continue to paint it with the same brush. And all the work we're doing is showing that this is an acceleration that's about to happen. That's why we're raised price to our continues to be one of our top picks in this fourth industrial revolution. Do you think that there's still some political backlash with those that didn't agree with, Elon Musk or don't agree with Elon Musk and his association with the Trump administration, whether they're enemies, friends, frenemies, I don't know where they are right now.

But how does that play out into demand for the vehicles themselves? Yeah, I think you almost have to separate. I think, look, in Europe, there's clearly still brand damage. And we see that in terms of the numbers. But I think some of that is going to fade, you know, over time as well as in the U.S. Look, they're still could be, like we said, five, seven percent permanent brand damage. But I think the broader view here is that they're really going to own what I've used, the autonomous world, the autonomous market. And you talk about it with Trump and the BFF to the enemy and back now.

I think it's all about regulatory. I think Trump administration is going to accelerate the federal roadmap in terms of what's going to be bullish for autonomous. And that's going to be, you know, very important in terms of laying the groundwork for what I believe is going to acceleration of this autonomous strategy. And I think that is how Tesla is going to be viewed. This is not just for Tesla, but for Musk, most important chapter of growth in its history. Yeah, I can see how that certainly would help fast-track Tesla if that goes as you think it will go. But, you know, you never know with this administration or the way that they view past friendships or forward-looking friendships. Good luck to Penn State.

Big game tomorrow. We are. OH. Thank you, Dan Ives. Thank you. Well, coming up, shares of Boeing soaring in today's session. We'll tell you what has that stock moving higher when closing bell returns. Coming up next, President Trump slapping new tariffs on key parts of the retail space.

We're breaking down the fallout ahead. Closing bell will be right back. We're getting more breaking news out of Washington. Amon Javvers has that for us. Hi, Aymann. Courtney, the Department of Justice has just made a new filing in the ongoing Supreme Court battle over the president's effort to fire Lisa Cook from the Federal Reserve Board of Governors.

Here's what the president's side is arguing here in this ongoing case. They say by authorizing the president to remove Federal Reserve governors for cause, Congress required the president to provide a cause, something more than a more than a mere policy disagreement, but Congress otherwise respected the president's constitutional authority over principal officers of the United States by declining to limit him to specific causes or specific removal. procedures. So what the president's side is arguing here is that, yes, they need to have a cause, but it can be pretty broad range of causes that the president can use here. They say

the president acted entirely appropriately. They say furthermore that Lisa Cook, despite this allegation of mortgage fraud hanging out there for weeks and weeks now, has not really defended herself on the merits. They say Cook has still not attempted to deny, explain, or justify the facially contradictory material representations and two mortgage agreements. that she executed just two weeks apart. There's another point in here that I want to bring up, Courtney, because this is directly at financial markets. They're arguing here.

The Lisa Cookside argued that any effort to remove her shakes Fed independence and could rattle global financial markets. The Department of Justice on behalf of the president now arguing the opposite. They say it's not apparent why financial markets would be spooked by removals for pre-concurements. confirmation, but not in office financial misconduct or why they would derive comfort from the prospect that newly detected fraudsters could serve on the Federal Reserve Board so long as the statute of limitations has run. So the president's side here, Courtney, arguing that in fact it's maybe worse for markets if somebody is detected to have committed fraud and be allowed

to stay on the Federal Reserve Board. That's the argument just filed by the President's team. Okay, got it. So the saga continues. Thank you so much. the latest. Retailers coming under pressure today after President Trump announced a 50% tariff on imported kitchen cabinets and bathroom vanities and a 30% tariff on imported furniture. Joining me now to discuss the potential fallout, Evercore ISIs, Greg, thank you so much for being here with us. I know that you cover Home Depot and that was one of the names that came to mind for me as soon as I saw some of these headlines. What do you think the impact will be? You know, we think for the retailers, especially one like Home Depot, they have a big, broad enough global supply.

base. And the case of Home Depot, the majority of what they're doing, they're sourcing here in the U.S. already, we think it's pretty muted. If it's a big enough gap, you'll probably see some production move back to the U.S. and other areas, you'll find vendors that are able to find a way to take out some more cost. If it's more efficient to import it, then they will. I mean, after the latest round of earnings reports, and we've got a little bit more detail of at least some of the tariff impact starting to leak in through the company's businesses and the consumer's reaction, I've been really surprised, frankly, at how strong companies have been able to be when it comes to their mitigation strategies and where there are price increases,

consumers don't seem to be rebuffing. They are continuing to buy. Do you think that will continue as we see the full impact going into the back half of the year for your coverage? I mean, Christmas is coming, and we still haven't seen the full impact of the tariffs. It sure is. And frankly, we do think retail sales are going to decelerate from the 5% growth that we saw in August or a really strong back to schools you described to something with the three handles we go towards holidays. So we do think we're entering a bit of an air pocket into the fourth quarter. And it's really going to be a function of some of the, you know, what isn't mitigated is eventually does pass through. And we do think that puts a bit of pressure

consumer. What we don't know is whether consumers are going to spend less on retail goods or could they take some spending out of other areas of consumption. So that's, that'll be a key air as we watch into the fourth quarter, but we think it's a deceleration, not a disaster if you think about holiday. So you have a pretty wide range of coverage here, but you've got sort of the everything places like the Amazons and the Walmarts of the world, but then you also have the O'Reilly names. Which do you think are best positioned, both with their businesses and as well as the macroeconomic headwinds they may be facing going into the back off of the year? I think that's a perfect question, and the key is to keep your eyes on the prize.

we'd like to say is play but play it's safe. Walmart is gaining share. They have plenty of new businesses and traffic growth that's allowing them in automation to basically eat some of the pressure of tariffs and still grow their margins, and we think make their numbers into year end. And I would say as you go to next year, you know, keep an eye on Home Depot. That's a category that is underperform for some time. The stock multiple has not been bid up. And, you know, we think you could have some sort of a nice home improvement recovery next year. Remember, there $125 billion of stimulus that we think will be even larger than the pressure of tariffs on consumers that will be coming in the first quarter of next year.

So once we get through this air pocket, we think you do need to play a little bit of offense. Home Depot does this is a good one. And on auto parts, you look at, that's a need-based category, and basically the price elasticity that we've seen from AutoZone just earlier this week is zero. So to the extent they have to raise price, the consumers saying, you know what, that's better than paying more for a new car or even a use. use car. So I'll just fix up the one. It's all fascinating. And as we look into the holiday season, I'm going to be really

interested to see the interplay between promotions and tariffs and what ends up happening for the prices that consumers are willing to pay. Greg, we have to leave it there. We've got a busy day of news, but thank you for joining us today. Thanks, Courtney. Have a great weekend. Thanks, you too. Well, next, we will tell you what has shares of Intel rallying again today. Closing Bell, we'll be right back. We're back and we're tracking another big move in Intel today.

Let's get to Christina Parts in other list with more. Hi, Christina. Hi, Courtney. Intel is up again today on reports the U.S. is considering new semiconductor tariffs. This is according to the Wall Street Journal. The proposed policy would impose 100% tariff on imported chips that exceed what a fad produces domestically. So one for one. If implemented, this really creates a lot of clear winners and losers.

And what I mean by that, companies with existing U.S. footprints like Intel and global foundries, which is up 7% today, benefit competitively. Taiwan semi is down about 1% though. Large fabulous players like Nvidia, Broadcom, AMD, Marvell would likely redirect more orders to TSM's U.S. facilities in Arizona. But execution is going to be tough. Most chips are imported, embedded into Finnish systems, so they're already in the servers and laptops.

So system manufacturers like Dell or Super Micro would really have to track down semiconductor origins across their entire supply chain. That is not easy. Separately, also adding to Intel's share price, Intel CEO reportedly approached TSM about a potential partnership, TSMC not commenting, but recent cash injections from NVIDIA, SoftBank, the U.S. government last month, are really making investors view Intel as a government proxy, which could mean attracting even more partnerships from companies that are seeking White House favor. But the bottom line for chip companies right now expanding U.S. manufacturing capacity, or at least credible. promising to do so is becoming the clear path forward under Trump's trade policy, Courtney.

Very fascinating. Interesting story going on there with Intel. Christina, thank you. Well, coming up next, President Trump takes aim at Big Pharma, at top health care analysts is standing by with reaction. Closing Bell will be right back. We are now in the closing bell in Market Zone. CnC. Senior Markets commentator, Mike Santoli, is here to break down the crucial moment. of the trading day. Plus FEMO capital is Evan Seagerman on the fallout for Big Pharma, following President Trump's latest wave of tariffs.

And Philibault on what's behind Boeing's big breakout. We're going to start with you, Mike. I mean, obviously, it seems like the action started this morning with that PCE rate and markets felt pretty good about it going into the weekend. Yeah, Carter, definitely reassuring, not necessarily a blowout, but incrementally a little bit better than expected on the spending and income side. PCE inflation's been hanging around these levels for a while. and the equity market's going to be fine with that

as long as the bond market doesn't get over-excited about it, and so far it's not. So I think in general, you'd almost consider it a net win that the S&P's down only a third of a percent this week. It's less than 1% off its highs, given that the setup was you had this pretty extended rally, some seasonal weakness coming in, and I would say around the margins this week,

we got less certainty around the bulletproof nature of the AI trade and perhaps exactly how. many Fed rate cuts we're going to get this year, but it was all enough within the bounds of expectations to keep the index on track in general, even if we're not out of the woods seasonally. Fair enough. Mike hang tight with us for a second. We are going to turn to Bemos, Evan Segramman. For his reaction to President Trump's new tariffs on the pharma sector, some pretty big numbers,

but then Eamond Javers is telling us bilateral trade agreements will be honored, so maybe not as bad as feared. And it doesn't seem like the stocks themselves are really worried here either. Evan. Explain to us why. Exactly. So it's a 100% tariff, but it doesn't apply if a pharmaceutical manufacturer is building or is broken ground in the United States. And literally every company I cover that sells drugs has manufacturing here, so I'm sure there's a carve-out. And then, of course, there is, to your point, that 15% bilateral trade agreement, which would supersede any of this. So it's more, I think, bark than bite at this point. But when you look at what a potential

tariff would be, is it on the API that's imported, on the cost of goods sold? I think the biggest issue is if there were a tariff on, say, a transfer price, which could hurt her name like Merck. But again, they have manufacturing in the United States, so all of this seems moot. And what about sort of the materials? I mean, if the final good, the medication is made in the United States, what about what's brought in to actually make that? Where does that stand? Sure, there could be a tariff on that, but that's such a small portion of the cost of a, you know, a pharmaceutical product. I mean, the gross margin on these products are, you know,

85, 90 plus percent. So that API component is maybe a percent or percent or 10, 15 percent on a percent of, you know, the overall cost isn't a ton. Again, we're not super word. We're more focused on the IRA negotiated prices, which is coming up next month. And of course, any potential drug pricing negotiations

pegging our prices to those prices outside of the United States. Got it. That'll make sense. Where is sort of your thesis? for the strongest names, knowing that we still have a lot of question marks to come here, as you point out. For sure. So we still like Willie, but it's not our top pick.

We're really bullish on Gilead. We think that their long-acting prep launch is going well. We also highlight top, you know, favorite names like Vertex, for example. Pfizer also, we love the deal that they did earlier this week. I feel like they're starting to get out of the doldrums that they've been in for the past year and change, but we do need to see execution there. Okay, fair enough. Evan, thank you so much.

Appreciate you joining us here on this Friday afternoon. I want to move on and talk to Phil Abo. Phil, shares of Boeing. What's going on here on this one? Well, a big move by the FAA to give partial certification authority back to Boeing. So this is what it means. They now will have the ability, which they had back before the max crashes in 2018 and 2019, for some 737 maxes and 787s to issue final certifications.

In other words, the ticket before it is handed. over to the airlines or leasing companies. And this, in theory, should speed up final checks. The FAA says, look, we're confident that they can do this and they've made the changes in terms of manufacturing processes. For the 737 max, the implications here are clear. They currently build at 38 per month. In the next couple of months, if the FAA says okay, they'll move up to 42 per month. Year to date, their deliveries are 285. As you take a look at shares of Boeing. Keep in mind, they are on track right now to surpass 2023, which I think was their all-time best year for 737 max deliveries, also had a big order today

from Turkish Airlines for 75-7-8-7s. All around, Courtney, a big day for Boeing. Yeah, absolutely. It shares more than 3.5% here going into the close. Thank you so much, Phil. I'm going to turn back to Mike Santoli. Mike, interesting here. We have most of the sectors higher here except for consumer staples. Earlier on in the day, I think energy was the leader. It's moved around. Then it was consumer discretionary. Now utilities. But not that big tech. that we have seen so often, the AI trade and otherwise, and maybe spreading the wealth a little bit. Yeah, absolutely, Courtney. And there is a kind of a best case scenario in terms of how the market deals with this little moment of fatigue or flattening out of the indexes, which is to

allow the Mag 7 type stocks, the semis, and the AI plays to cool off a little bit, have everything else take up the slack, whether it's lagger, it's like energy getting their moment, or it's just in general, maybe a broader set of financials and consumer cyclicals and things like that. That being said, it doesn't always, the choreography sometimes breaks down. So I do think that they'll try it. The market's tried to rotate around. You do have the NASDAQ 100 underperforming for the week. The Equal 8 S&P is actually flat. It's not even down on the week. So there has been a little bit of a kind of a pickup in the slack by the average stock. Don't know if that's the trend, but I do think that it shows you the market. He's just not had a huge across-the-board

selling impulse, even though, as everybody will recite, valuations are at a high, we don't really know if we're sure about what the Fed's going to do. And there really is a debate as to whether the soft labor stats are going to translate into broader economic weakness. So far, everyone's comfortable with the data they're seeing. Recession risk looks low. Credit risk is very much contained at this point. So it feels as if you're a bear, you're not quite sure where to go. And that's why I think a lot of the conversation has been around is the AI trade just jumped the shark. And is it a bubble? And do we have to start worrying about that? And this was the week where all of that argument broke wide, in my view.

And you talked about valuations being high, but you also note that, you know, some froth has been skimmed in some areas, at least. That's exactly what this market has tended to do. It gets a little bit frenzied in some pockets, like, you know, the quantum stocks or the crypto asset treasury companies. or whatever it might be. Sometimes it's the robotics, names, and things like that. And they sort of retrace and they go down, and they almost live in their own little world.

You know, I noticed this week Palantir has been on the defensive. That's been a moonshot stock. So all this stuff, again, it works in this kind of harmony if the rotation stays in gear. And, you know, so far we have, and we're going to wait and see if the macro picture does clear up at all. Market doesn't seem too concerned as it typically isn't about a government shutdown. Maybe we'll have to live without that job number next week.

could complicate the picture, but maybe in that instance, no news is good. Yeah, absolutely. Usually we do shake that off. But, of course, if we're missing that jobs report, that's some key data for the markets and for the Fed. Like St. Foley, thank you so much. We really appreciate you being here with us today on this Friday. That does it for the closing bell with the average closing higher. Dow Jones is higher like 7 tenths of a percent. Let's send it over into Morgan and John in overtime.