Closing Bell - Closing Bell: Bottom In or Bear-Market Bounce? 4/25/25

Episode Date: April 25, 2025

Have the bulls made the case that a bottom is in or is this still a typical sharp but fleeting bear-market bounce? We discuss with 3Fourteen’s Warren Pies, JP Morgan Asset Management’s Stephanie Aliaga and Truist’s Keith Lerner. Plus, the “Dean of Valuation” Aswath Damadoran from NYU tells us how he is navigating the tech trade this earnings season. And, Alger’s Ankur Crawford weighs in on the semi space and AI arms race. 

All right, welcome to Closing Bell. I'm Mike Santoli in for Scott Wapner. This make or break hour begins with stocks coasting to the end of a winning week with a furious three day rally carrying the broad indexes to their highest point since the Trump tariffs were announced on April 2nd. The S&P 500 folding above the 5,500 mark right now. It's also on pace for a 4% plus weekly gain.

You see it there at more than one half of 1% today. And unlike recent big rally days, volatility is somewhat subdued and the leadership is more narrowly focused on the popular tech giants. That would include Nvidia, Tesla, and Meta, pacing the Nasdaq's 1% plus advance on the day. The Nasdaq, as Brian was saying,

up well more than 6% on the week. Now, speaking of big tech, we'll discuss whether the recent correction has generated any bargains in that group with corporate valuation expert Aswath Demodaran from NYU. But we begin with our talk of the tape with stocks recent surge triggering some positive technical signals as investors look for some de-escalation of the trade war. Have the bulls made the case that a bottom is in for this market, or is this still a typical sharp, but fleeting bear market bounce? For answers, we turn to our panel. Warren Pies, co-founder of 314 Research,

JPMorgan Asset Management Global Strategist, Stephanie Aliaga, and truest Co-Chief Investment Officer, Keith Lerner, welcome to you all. Warren, love to check in with you here in terms of what your work is telling you about whether this rally has kind of, you know, surpassed the burden of proof that it's more than just a bounce

and, you know, more than just pricing out a worst case scenario in terms of trade impact on the economy. Yeah, thank you for having me. We're getting close. So, I mean, I think that the first thing we told our clients from the get go after April 2nd is that we're not going to navigate this thing by getting inside of Trump's head and psychoanalyzing the next move or the next tweet.

But I do think that the White House is trying to deescalate the situation. One of the markers we've seen is that Peter Navarro hasn't been on TV since April 13th and that's corresponding to this equity rally. So setting that aside though I think that the bottom a confirmed bottom has two components you need to see washed out sentiment and positioning we measure that a number of ways we know measured in inverse ETFs for retail we measured for vault targeting for institutions and CTAs for trend followers and across all those metrics, sentiment is depressed and that's phase one of a bottom. And then you look for technical confirmation. Philosophically we're always going to be late because of that ordering.

And I think we're getting really close to technical confirmation. We haven't closed yesterday. We didn't trigger the exact perfect thing we're looking for, but there's been a lot of talk about this wide breath thrust, which is a similar metric to what we look at. We have a bottom spotting breath thrust at 314 research. And there's been a few other things. We had three straight 1% updates

with the trailing negative 10 day performance, which has an excellent track record. Historically, there's no negative cases when that happens looking at one year. So there's a lot to like about it. And we just are waiting for that final technical confirmation. We'll see how we close today. Yeah, I was gonna say a lot of the work

is pointing in that direction that have positive implications for six or 12 months ahead in most instances, although of course, the interim might be a little toughener. And Stephanie, I mean, granted, nobody can actually decipher exactly what's going to happen based on the decisions of literally one person. But I guess you have to have some working assumption for how this might play out or

at least what's priced in for now in terms of where tariffs might land and what it's going to mean for the economy and earnings. That's the real difficulty. What's priced in right now? We think we're past the peak in terms of escalating tariffs, and we welcome a lot of the de-escalation that we've seen recently, but now I think we're shifting into the slower burn around digestion. This week, we've got more signals that all of this tariff turmoil is starting to really

impact supply chains, and it's already making companies today change their decisions. This week, in terms of what we heard from earnings, one thing that really stuck out to me was how companies are rebuilding their war chest. They're figuring out how do we increase liquidity. Maybe we're prolonging some hiring plans. Maybe we're enacting some layoffs already. And while the consumer hasn't softened yet in its consumption, the anticipation of a softer consumer is already leading to a softening in business activity today.

Sure. Yeah. I mean, you saw the CapEx intentions really take a dive and things like that. To your point about companies deciding they'd rather maybe hang on to that cash a little more. Keith, it's funny because the market has seemed to be celebrating these just hints and maybe not very substantive ones that maybe we're going to be working towards some kind of cooling of these trade tensions. On the other hand, if we land at 10% across the board tariffs and then something way lower than where we are on China,

that's still a pretty stiff tax on global production and efficiency. So how do you try to think your way through how the markets are going to absorb all that? Yeah, well, first, Mike, always great to be with you. We use the way of the evidence approach. Some of the things that Warren talked about earlier I agree with, some of the technical momentum has been positive. But on the same token, when we look at the way of the evidence, we see more of a mixed picture and we think that the upside is somewhat capped. Maybe we squeeze above $5,500.

I think the upside in our work is likely ca squeeze above $5,500. I think the upside in our work is capped around $5,800. And the way we're looking at things is at the lowest, Mike, you and I spoke a few weeks ago, close to the low, we thought we were pricing in a lot of that bad news already. Now with this rebound, we're pricing in a better outcome at a time where we think the economy continues to likely slow later this year. We are concerned that we may see a little bit of an air pocket later in the year as we're bringing forward all this inventory. And there's also a risk that you bring all this inventory in now and that later on the demand isn't there to meet it.

And you have to start reducing prices, which is then the companies have to protect profits. And that's where the labor side could come in as well. You know, valuations are, you know, a condition. You can't get, you know, you can't, you have to be careful not to be too precise, but we are still above the pre-pandemic levels, the peak pre-pandemic levels,

at a time where forward earning estimates still need to come down. So listen, I think that 4,850% retracement is a pretty good low unless you go in recession. But up here, I just think the upside's capped, and again, the risk reward becomes a bit more less favorable as you use up some of that energy to get all the way back up here. We're up 14% off that intraday low now.

I was going to say, that does seem like it might be a pretty good floor, but the floor is not that close anymore, right? You're a good double-digit move from threatening it if we do roll over here again. Warren, I guess, you know, general rule of thumb, the deep corrections tend to be opportunities to add risk if you're not headed into a recession. And basically if earnings are not gonna take a dive, what clues are you attending to, to see if in fact that's the case?

Yeah, I think that's a good way to say it. We are basically recommending a benchmark weight for equities and we've been saying, have an offensive mindset, so I think we're more likely to upgrade to an overweight versus de-risk further. But the question is, what would get us to de-risk? And that would be signs, more tangible signs that we are going into a recession. I think there are three things that we're looking at to key us off there. And that would be number one, residential construction payrolls rolling over, getting a couple months in a row of

negative prints there. We're still at cycle highs. And we consider that the really the most important leading segment of the labor market. So even though there's a lot of problems in the housing market, haven't seen materialized labor in the labor side. Credit spreads have been well maintained, have been narrow, given the equity sell off, that would be a real time indicator. And most importantly is how we come through

this earnings season, forward estimates have started to hook lower. We track what's the recessionary path, what's the non-recessionary path coming out of these corrections. And what we've seen so far is this after liberation day has been this hook lower and forward EPS that's tracking closer to the recession side.

So if we see that maintain, then we'd have to consider the risk position we have. Yeah, obviously this reporting season is gonna have a lot to say about that. That's a key dynamic. Stephanie, it's easy to forget after three days of just furious upside, that Monday we almost had another one of these

sell America type of moves, right? You had the dollar and treasuries, as well as stocks, all caught up in this idea that there was just a flight from US assets. Now that's calm, treasury yields have come in, the dollar has bounced, gold has rolled over a little bit. But where are we in that?

And how do you kind of navigate it as an investor or tell investors how to try and assimilate all these things? Absolutely. I think this week really showed us this is not a market where you want to be all in or all out. You want to participate in the upside, like what we're looking at as of Friday, the close of this week.

But you also want to make sure you have some downside protection, particularly given these macro risks that are looming. We're not anywhere in the clear just yet. So how do you do that? How do you build a portfolio for stability? We think that involves high quality fixed income and credit. That involves international diversification,

particularly cheaper, more defensive markets like Japan, UK, Europe. We also think that involves alternatives or other hedged equity strategies that can help you with uncorrelated returns and maybe some more stability from income. And it also is a really ripe environment to lean into active management. Right now there are all sorts of headwinds that are going to be felt

unevenly across the market. There's a lot of opportunity as this week has shown. But selectivity is gonna be more important than just blind optimism going forward. And in terms of the non-US equity markets, would you be kind of overweighted them or just make sure you have your sort of standard helping of those? I think first you have to consider what kind of international diversification do you have? And so many investors, many of them at the start of this year found themselves with acute concentration exposure to US equities and just the Mag-7.

So it's about increasing some of that diversification because this environment has shown us the benefits of that zig and zag with international exposure. Yeah, absolutely, for the last few months. Keith, you know, we also were talking right in the kind of mini panic that we've had in these markets about Fed independence and whether the Fed was trapped based on where inflation is and the need for looking for more evidence of weakness before they cut again. What's your your theory of the case in terms of how the Fed moves from here? Yeah, and I'm glad you brought that up. I mean, our base case is still about two rate cuts.

And one of the reasons, like our technical studies say, six months, 12 months later, we should be up. But when we look at a lot of these past periods where we had this sharp selling, whether it's COVID or the global financial crisis in October, you had a fiscal or monetary policy response. And we all know they brought out the bazookas in 2020. And today we have constrained policy,

probably more of a lagged reaction on the monetary side. We're seeing fiscal spending come in as well. So I guess the question we're wrestling with is, is the deescalation of the tariff, is that enough? Is that enough of a policy change? And we're somewhat skeptical that's it. And if the Fed goes more aggressive later this year, it's probably because they're behind the curve

on the economy. So that's another reason why we think the upside is somewhat constrained. Real quick, Warren, I wanted to weigh in because I think you're on the camp that says maybe the Fed's gonna end up doing more. Yeah, I do. I think that the Fed's gonna cut four times. You know, we were of the belief that says maybe the Fed's going to end up doing more? Yeah, I do. I think that the Fed's going to cut four times.

You know, we were of the belief that the economy was was slowing as we came into this year, was decelerating. And we were seeing that show up, as I mentioned, in the housing market and some of those areas. So I think that obviously the one of the worst things and one of the reasons we downgrade equity is because the terror news flow took the Fed off its cutting cycle and so I think there's gonna be a catch-up as you get through the second half of the year and the Fed's gonna cut more in consensus expect yes. All right well we'll definitely be tracking all that Warren Stephanie Keith thanks very much really appreciate you wrapping up the week with us a pair of big movers we are tracking today Deirdre Boese here with a

look at Alphabet and Phil LaBeau standing by with a rundown on Tesla. Big mover today. Dee, let's start with you and how the market's digesting those Google numbers. Hey, Mike. So consensus for the quarter is that Google did deliver but did not settle some of the bigger questions that are still on the horizon. And that's why you saw shares give up their gains throughout the session today.

So while search ad revenue did hold up for now, executives barely address potential tariff impact and also while AI Momentum is building, monetizing that momentum is proving more difficult. Part of the problem is that Google doesn't issue guidance, so its executives can get away with some vague statements like we heard from Chief Business Officer Philip Schindler he said it's too early to comment in relation to tariff questions. Bottom line Google is resilient but the ground beneath it is shifting and he's been just moments ago Mike we got another headline on the antitrust side. May 2nd has been set for the ad tech trial to discuss remedies so that's gonna be

another headwind that Google is going to face that this past quarter just didn't address. Back to you. Sure. I mean, that obviously, that the potential regulatory issue, the breakup overhangs, not going to go away quickly, Dee. But I wonder how the market is treating

the continued CapEx plans. And even what Alphabet tried to convey was, look, not a bad experience in terms of their monetization of AI and the kinds of searches that go in that direction. Maybe you're not the ones that are looking necessarily for a commercial solution. That's fair. I would give it maybe an okay on how they addressed AI monetization. I think if you look at some of the specifics, yes, they're getting engagement,

but monetization may not be falling just as quickly. On the capex side, you're right. Senator Pichai and team reiterating $75 billion. That's good for the AI, especially the data center trade, but there's just been a lot of noise around it over the last few months. Six months ago, it was only one way but up, and you've seen this trade really lag in the public markets.

And I think that just kind of signifies some skepticism around it, even though you're getting these reiterations from the likes of Google and AWS, still noise around Microsoft. And it doesn't feel like the market's totally buying that. And there's still some questions, particularly as they look for return on investment, right?

That's still lost to us. Yeah, absolutely. I mean, it's been an for return on investment, right? That's a lot. Absolutely. I mean, it's been an absolute rethink. What's like nine months ago, we were saying how the market was penalizing companies for not spending enough. So obviously some shifting in the thinking there. Thank you very much. And Phil LaBeau, more on this Tesla move.

Obviously, this is a stock that runs in streaks and it's on one now. Yeah, up 26% since Monday. I remember on Monday people were going, ooh, is it possible they could go under $200 a share? Look at it now, 283. And why? Yeah, they didn't have good results when they posted them earlier this week,

but investors have made a decision. You know what? We're gonna look past the week first quarter because the first quarter is primarily focused on the traditional EV business. And if you look at Tesla, if you were a bull about Tesla, the three drivers of potential growth, they remain in place and those three drivers being autonomous vehicle technology,

AI, and robotics. Has anything changed with those? No, nothing has changed. And you also know you have confirmation that the RoboTaxi rollout is scheduled, it's going to stay on schedule to happen in June. And so that'll be in Austin, Texas. Yes, it'll be in small numbers, model wise at first. But the point is they're going to be hitting what at least is a near term benchmark in terms of their development of autonomous vehicle technology. As for

the cyber cab, that remains on schedule for production in 2026. So all of these questions that were out there, is it going to be the cyber cab in June? What's going to happen? Yeah, we've got a little more clarity there, but nothing's changed if you are optimistic about the future of autonomous vehicle technology and Tesla. Keep in mind that Elon Musk also said this week he's going to be scaling back his work in terms of the Department of Government efficiency. And you had one last thing, Mike. Yesterday, the DOT put out new rules for the development of autonomous vehicle technology.

Today, the state of California said it's going to rewrite its rules in terms of reporting incidents etc in the development of these vehicles. I mean that's good news for Tesla. So if you are a bull Mike and I know we've talked about this before long term nothing has changed nothing at all you still believe that Elon Musk will deliver. Yeah and nothing has changed I think is probably both the bull and the bear case I I guess, because it's not going to be settled anytime quickly and the stock got cut in half. So here you have this bounce off that level, Phil. Appreciate it. Thank you very much.

Let's bring in the Dean of Valuation, Aswath Demodaran of NYU Stern School of Business to weigh in here. Aswath, pick it up right there. I know you had sold Tesla. We now had this quarterly results, which really there was not much there in terms of the business that would have given you a whole lot of encouragement. But what's your read on how it's valued now? I didn't sell it because I didn't like the company.

I sold it because I don't like politics to become part of my investing. And so no matter what your story is about Tesla, you can't say it hasn't changed because it's become the center of a political firestorm and that's not going away. So I think from my perspective, that is the biggest challenge with Tesla is how does that play out in whatever they choose to do, whether it's robotics or automated driving,

I think it's going to stay in play for the long term. And I don't think Elon Musk going back to Tesla is going to change any of those dynamics. Yeah, and again, I mentioned that the stock kind of just goes on these runs. It's obviously the favorite of retail investors and it gets some rebuilding of momentum. It doesn't have to have a Y attached to it all the time,

not a Model Y, but a Y is it happening. And let's just move on to Alphabet here because even going into this report, I mean, it was easy to observe that by traditional valuation metrics, this is stock was cheap versus its history and relative to the market and its peers. Question is, is that for good reason or not?

No, I think the first quarter numbers kind of settle the fact of the near term is that damage so far, no damage. The problem with Alphabet and I would say with Apple as well is what we're worried about now is not showing up in that first quarter earnings report. With Alphabet, it's the antitrust stuff coming into play. With Apple, it's how will they deal with this China issue because they can't move their production of smartphones overnight to India, Vietnam, or wherever they plan to move it. Those things are not going to get resolved,

whatever the numbers look like in that first quarter earnings report. So people might be celebrating the earnings per share beat, but the big issues still stay on the table. And I think it will take a while longer for that to show up in the numbers. When you look ahead to something like Amazon reporting next week, on the one hand,

you mentioned all the challenges on many fronts, they're not gonna be able to escape a lot of the tariff issues, a lot of the e-commerce vendor stuff that's going on. On the other hand, they're the biggest and most financially equipped company to deal with any of those things. So in a weird way, maybe they can consolidate their advantage. In a weird way, again, all these troubles

might play into the hands of the MAG-7, because the more troubles there are, the more flexibility gets rewarded. And as you pointed out, these companies are incredibly flexible, incredibly adaptable. We saw that with COVID. We saw that in 2022 with inflation. And I'm convinced you're going to see it again. Doesn't mean you load up on the MAG-7, but if you've never owned them, you had a chance to buy into at least one or two of them

in the last month. You might've missed that chance, but the chance was there. So I wouldn't give up that easily on the MAG-7. You know, obviously you're looking at, you know, making very educated guesses or quantitative evaluations on these companies. How would you recommend that an investor think about just the huge range of probabilities on the policy front

that we're dealing with here that seem as if that's gonna hold the key to how the actual real economy performs from here? You know what, the S&P 500 might end this month at where it started. And we think about day to day, the trauma we went through. Maybe the best thing investors could have done is left at the start of the through, maybe the best thing investors could have done is left

at the start of the month, gone somewhere without internet service and come back at the end of the month. Because everything we do is reactive and often when you're reacting to day-to-day events, you're going to end up doing more damage to your portfolio than helping. So when the earlier speaker mentioned about this being good for active investing, I think you think of this as the perfect ad against active investing because a wage and wager in the last month active investing lost you money relative to just leaving whatever you had at the start of the month where it was all month. It's certainly true that over the long span of time that that's basically the way an investor

should should treat it but what about the other side, not so much panicking out, but looking at a 15, 20% decline in several weeks in the S&P 500 and saying, I'm gonna take that as a gift and bet that the crowd is wrong about this. I know you had some thoughts about just trying to be a contrarian in such markets. I think that a drop is always an opportunity, but you have to use a scalpel, not a bludgeon.

Going and buying everything that's down just because it's down doesn't strike me as a recipe for success. So my advice is, pick a group of companies that you've always wanted in your portfolio. When you have these drops, view it as an opportunity to buy those companies. I call this opportunistic contrarianism. We essentially use the market drop as a chance to buy those companies you've always wanted but were never able to buy because of a price too high for you. Yeah, so yeah kind of opportunistic contrarianism makes some sense. Aswa, thank you very much. Great to catch up with you. Thank you.

All right, we are just getting started here. Up next, Algers' Encore Crawford is flagging a big thread to the AI trade. She joins me at Post 9 next to talk about that. We are live from the New York Stock Exchange. You're watching Closing Battle on CNBC. Tech stocks rallying today actually double the performance of the S&P 500, but still

down roughly 12% on the year as China tariffs and looming U.S. export restrictions weigh on the once hot semi-space. Algiers, Encore Crawford is here with me at Post9 to, I don't know, sift through some of the damage and really just maybe offer some thoughts as to whether you think there is a broader rethink going on of the big themes, of the AI themes, of the things that have supported this market for a while, or is it just caught up in the wash

of what's happening with the market? Sure, I think whenever you get volatility, you have to, everyone starts to rethink their themes and tries to poke holes in what their thesis was. However, let's just ground ourselves in what is actually happening. I mean, the AI theme is alive and well. You've heard it from Google, you've heard it from Amazon, you've heard it from Nvidia recently

in LinkedIn posts and last night on the call. So I think that, you know, as much as you want to rethink your theme, this train has left the call. So I think that, you know, as much as you want to rethink your theme, this train has left the station. I think there's no stopping it. But there are geopolitical kind of ramifications of what is happening. And so, you know, there are impacts of that on this AI trade. When you say that the train has left, these companies are resolute, they're not stepping away from their investment.

That suggests that the AI theme in terms of this build out and these companies determination to fund it and race to wherever they think they're going, that's intact. I guess the other the bigger question is, are investors giving them credit for that? Are investors being more demanding about knowing exactly how this is going to get a payback? Of course. Of course, investors should always be asking how they're going to get a payback.

And but one of the things that I think is lost on some is that some of the spend is existential. Google must spend. It doesn't want to spend. It has to spend. And you go down the list of spenders for AI, there are a lot of have to spenders that will continue to spend over the next three, four, five years because they can't miss the boat on AI, because it puts their core business at risk.

So that would suggest that you still think the highest conviction should be in the beneficiaries of that urgency to spend as opposed to those companies that feel like they're under existential threat or all of it? I think you should be investing in those that are the beneficiaries of the CapEx for sure, all the way downstream to the utilities

and the semiconductors and the veritives of the world. So all that infrastructure is actually, we think that it's gotten thrown out, like a baby's gotten thrown out with the bath water. Now you mentioned policy influences on this. How does that come into play when it comes to things like semiconductor exports getting caught up in some of the back and forth.

I think one of the things that is an unintended consequence of all of this, and let's just take Nvidia and what is happening with Nvidia. You know, over the last few weeks we've seen the H20 ban. In the next few weeks we'll see the diffusion rules, the semiconductor tariffs. And at the same time what we've seen is Huawei, which is a Chinese AI semiconductor

manufacturer, they do a lot more than that, but that is one aspect, has introduced a chip and a rack that is actually not that much worse than an Nvidia rack. So we want to count out the Chinese and say, you can't do it without us, so we're just going to ban H20s. But actually, they't do it without us so we're just gonna ban H20s but actually they can do it without us and by stopping the technology Nvidia's technology which is truly our you know our pride it should be our pride of innovation of the US we are pushing an urgency in the Chinese to develop faster and faster because they can't rely on our technology. And so I think we need to kind of understand what these consequences are of limiting technology to cross borders,

whether because of the diffusion rules or because of China. I mean, China is spending over a trillion dollars in AI between now and 2030. They are serious about being leaders in this field. Does that mean though, does that suggest that it's almost kind of too late? In other words, if Nvidia were allowed to sell as much as they could in China, it wouldn't necessarily stop that, that domestic

development in China of competitors. Well, I think what it would stop is the urgency by which they're doing it. And it would also, if the diffusion rules go through, we're basically asking India to go work with Huawei, right? Instead of saying, you know, we should be developing on US-based technology. Not to mention that Nvidia's business now is largely predicated on installed base and software and the ecosystem, right? It's not just the one-time sale.

That's right. And so I think we just have to be careful and whoever is putting this policy in place needs to understand exactly what we are doing and not play political football with Nvidia. Yeah. Do you think just quickly that Nvidia right now in terms of how the stock is situated and how it's valued and where the estimates are, accounts for that already or do we still

have a shoe to drop? I mean, sure. I think that Nvidia, if you look at the valuation, it is a sub-market multiple at this point. Yeah, right. It has been a sub-market multiple. There's a lot of fear that is baked into the stock. And you know, if they come out and they have to take down numbers because of diffusion rules, will the stock go down?

Probably. Is it going, is it getting cut in half? No. Sure. Yeah. So. Ankur, great to see you. Thanks a lot. Have a good weekend. All right. We are just getting some news on Novavax half now. Sure. So. Ankur, great to see you. Thanks a lot. Good to see you too. Have a good weekend.

All right, we are just getting some news on Novavax right now. Angelica Peebles here with that story. Hi, Angelica. Hey, Mike, the Wall Street Journal's reporting citing people familiar with the matter that the FDA has asked Novavax for more randomized clinical trials

to prove that its shot is effective. Remember, that's its COVID-19 vaccine, and that was supposed to be approved earlier this month and Novavax saying that that was delayed. Now, it's a little bit unclear exactly what the FDA might be looking for here. The journal is saying that this could be so prohibitively expensive that Novavax might not be able to run this type of trial. But Novavax the other day put out a statement saying that they believed that its application was approvable and that they were in talks.

They did receive an additional data request, but that was in the form of a post-marketing commitment. So not necessarily something that was necessary in order to get that vaccine fully approved. So we've reached out to Novavax. We'll come back, but take a look at shares right now, down about 4%. Mike. Yeah, trying to come back a little bit.

Yeah, still well down on that news, Angelica. Thank you so much. Up next, Apple might be making a big pivot in its iPhone production. The details and what it could mean for the stock amid the tariff uncertainty. Closing bell, we'll be right back. Welcome back.

We want to introduce CNBC's newest subscription streaming product, CNBC Plus. You can stream Closing Bell and all of your favorite CNBC shows anytime, anywhere, and also on demand. For more information, just scan the QR code on your screen or head to CNBC.com slash plus. Meantime, new reports saying Apple is looking to shift iPhone production out of China.

Steve Kovach is here with what details we know. Hi, Steve. Hey there, Mike. So this one came from the Financial Times overnight and they're saying Apple is planning to make all of their iPhones sold in the US in India now. That would come to about 60 to 65 million phones. That's according to research firm IDC.

That's what they sell just about every year here in the United States. Now, Apple doesn't have that capacity yet and the Financial Times is reporting this isn't gonna happen for another year or so. And in the meantime, there's supposedly that trade deal in the works with India and the United States as well. We know Vice President JD Vance met with India

Prime Minister Modi earlier this week and made some progress there reportedly Meantime Apple is gonna need to ramp up quickly in India They only made about a fifth of global iPhones in the country last year and many of those are sold internally in India and Apple began this expansion by the way during kovat after learning that really tough lesson during China's lockdowns that really slowed the production of devices in that country. China though is obviously an efficient supply chain

for Apple, but still very susceptible to geopolitical instability. And by the way, Mike, this is not what the White House wanted. A US made iPhone just isn't possible now. So instead of going from China to US, we're seeing them go China to India instead, Mike. Right, exactly.

And I guess I'm wondering if we know much of anything about the comparative economics of producing in India versus China. You mentioned China obviously has the scale and has been very efficient. Not just the scale, it also has the workforce that's needed for this. So when we talk so much about what would it take

to build an iPhone here in the United States, let's forget about the supply chain for a second, talk about the labor needed. We just do not have that kind of skilled labor necessary, and India does. And Tim Cook, the CEO of Apple, has talked about this numerous times over the last couple of years, especially as they were ramping up in India about two years ago or so, and saying he really views India the way he viewed China back in the day when they were ramping up there. It's got the growing middle class, it has the growing workforce they need in order to make all these phones, so they're highly optimistic in the long run about India even if this trade war wasn't going on

in the first place, Mike. And you know obviously no iPhone production here that's just not really feasible, but of course Apple has made a you know a bit of a fuss about half a trillion dollar investment over four years now What's included in that? I mean at one point I remember even the retail stores Maybe we're in there, but what else might be as part of that? It's really tough to tell what exactly is in there There are a number of different ways Apple could be calculating that that could be taxes They pay that could even be the payments they're paying to Qualcomm, for example. There's licensing fees when they use Qualcomm chips.

What is new and unique here for and kind of a gift here for the Trump administration is Apple did say part of that investment is bringing AI server production from overseas to a new facility they're building down in Houston, Texas. So that is something tangible, new, that they're going to be making here. Not iPhones, but it is something. Gotcha. Steve, thanks very much. All right, up next, we are tracking the biggest movers

as we head into the close. Christina Partanavellos, standing by with those. Hi, Christina. Hi, Mike. Well, investors hit the panic button. As uncertainty around tariffs forces a major manufacturer to abandon its financial forecast for the year, year, lackluster shipment growth sends a freight company stock to its worst single-day performance in over two decades.

We'll have those names after this short break. Coming up on 15 minutes till the closing bell, the S&P holding to a half percent gain. Let's get back to Christina for a look at the key stocks to watch. Mike, those shares are falling what, 5% now, sliding after the shoemaker withdrew its guidance for the year amid the uncertainty from what else, the tariffs. In its most recent annual report, the company said it sources almost all of its inventory from overseas, with most of it being manufactured in China and Vietnam. And so that's why you're seeing the stock down about 5.

Sia shares plunging after the shipping company reported a big miss on earnings for Q1. The company said it didn't see typical growth in shipments due to the macroeconomic environment, but analysts at BMO actually downgraded the stock to market perform, saying it's actually issues are company specific, and that's why shares are down get this 30 percent its worst day since 2002. Mike? Wow. No wonder they were looking for something else to blame. All right, Christina, thank you very much.

Still ahead, a double dose of healthcare movers, Geliad and AbbVie, moving in opposite directions. We'll tell you what's driving that action when Closing Bell comes right back. Up next, we'll drill down on the big drop in Intel stock today. That and much more when we take you inside the market zone. We are now in the closing bell market zone. Christina Parchinevolo is on what's behind Intel's big sell off today.

Plus Julia Borsten on why Charter and T-Mobile are swinging in opposite directions and two big movers in the healthcare space, Angelica Peebles will have those details. So Christina, Intel, I guess some high hopes, new CEO, but again, disappointment on the day after. Yeah, which is why maybe some are saying the honeymoon period is over, but Intel's latest earnings call painted a gloomy picture that stands oddly alone right now in the chip sector.

The chip maker blaming Tariff Uncertainty for their cautious outlook, which was short by a billion dollars compared to street estimates. One of the few companies though explicitly acknowledging demand pull-forward effects. They're saying that people are buying a little bit more PCs and data centers because of the looming threats of tariffs. What's striking though is Intel's recession warning from

CFO David Zizner about quote fluid trade policies increasing the probability of a recession, the R word, while other chipmakers like Lamb Research, TSMC, Texas Instruments, I know they all fall into different categories, but they all said they see somewhat of a recovery on the horizon under identical economic conditions. CEO Lip Boutin is just five weeks on the job and is definitely pivoting towards a cost cutting and balance sheet focus rather than his predecessor foundry and product ambitions. The company went from net zero to net negative $30 billion in net debt in just three years,

but today's stock plunge suggests investors weren't prepared for his warning that this turnaround, Mike, is just going to take a while. Right. I wondered if there was something that Wall Street in particular was looking for in terms of you know forward going announcements whether it would be on the magnitude of job cuts

or other investment plans mean you know we probably should remind people that this stock trades like below book value whether in fact that's meaningful or not it really has been depressed for a while. It has which is why the stock

actually did better than the SMH ETF going into earnings I think it was up 5% on the year versus negative 17%. I think the first was a number for job cuts and the company committed to saying that there's going to be job cuts. They didn't say where it was going to be. I know some Wall Street analysts were saying that they wanted the foundry business to be you know possibly removed, sold off, joint venture with TSMC. And so I think that that dynamic, if it's questionable, TSMC denying any type of joint venture, I think that is a little bit alarming to some on Wall Street and the fact that the

company said they're still committed. So they're going to keep spending a lot of money on this manufacturing business that has yet to really take off. Right. Yeah. With very much unknown returns on that capital. Christina, thank you very much. Julia, T-Mobile charter diverging reactions to numbers here. Yeah. Different reactions to those earnings reports. Let's start first with T-Mobile. Shares the telecom giant sinking today despite being on the top and bottom lines, with been weighing on the stock now down 11.5%, disappointing wireless subscriber growth. T-Mobile reporting

495,000 postpaid phone additions for Q1, while Wall Street was expecting 504,000. Echoing AT&T and Verizon, T-Mobile saying that customers will have to bear the increased costs of devices due to tariffs. Now on the flip side, shares of Charter soaring double digits despite missing expectations in the bottom line. The stock up 11.5% after it lost fewer video subscribers than anticipated. The cable company continues to suffer from cord cutting, but it's been benefiting from the investments it's made in its mobile business as it works to lure over customers from the telecom giants.

Charter adding 514,000 mobile lines in the quarter that's higher than the 467,000 that Wall Street expected. Moffitt-Nathanson calling out the re-acceleration in mobile growth this quarter as its key takeaway from this report. Back over to you. Yeah, altogether, Julia, it paints a picture of these companies that are obviously operating in each other's space, right? T-Mobile selling the broadband and the cable companies trying to make something in mobile. It sort of feels like not maybe zero sum, right? I mean, every time you have these reports, it's a matter of who got a slightly bigger piece

of a pie that's not growing very fast. Yeah, and look, this also plays into the conversation around Comcast earnings, which were this week as well. And this question about which customers are they fighting over now? Is it video customers? We know that video customers are in decline due to cord cutting.

For a while, the thought was that broadband was going to be the thing, and now it's really seen, the focus has shifted over to mobile customers as the growth opportunity. But I think what we're seeing with charter is this idea that if you could bring in mobile customers, it's another way to, through a bundle,

keep customers hooked through your service and to keep them from churning out. So I think that's why we've seen both Charter and Comcast make such significant investments in the mobile space. But yeah, you could only have so many mobile carriers. Every customer only needs one mobile phone. Exactly, they get swapped around. All right, Julia, thank you. Angelica, these big pharma movers today.

Yeah, Mike, you have two companies on opposite ends. So Gilead, they had an okay quarter. Its HIV business was mostly in line with estimates, but there was weakness in its cancer business, particularly one drug, Tridelvi, and that raised some questions. Overall, the company's revenue is falling short of expectations.

Now at this point, investors are focused on the upcoming launch of Gilead's once yearly shot for HIV. The FDA is supposed to decide on Lena Capovir by June 19th and Gilead is saying that all interactions with the FDA are on track at this point despite the shakeups at the agency. Of course that's been a big concern and a real risk that the industry is facing. Then on the other end you have AbbVie and that company raising its full year adjusted earnings outlook by 10 cents a share after a solid first quarter. The company is continuing to impress with its newer drugs Skyrizzy and Rinvoque those are both for autoimmune conditions despite shrinking sales of

its longtime bestseller Humira that was also an autoimmune drug and it's now facing biosimilar competition and both Gilead and Abbvie were really asked over and over about tariffs and downplaying the effect of any possible pharma tariffs that we might see from the Trump administration. They were both chalking up their US manufacturing and Gilead actually positioning itself as less exposed than some other pharma names. And Abbvie saying that its biggest drug, Skyrizy, is actually made here in.S. So a lot of focus on tariffs and everything that's happening in Washington. Yeah, I guess that is certainly an asset. Angelica, thank you very much.

As we hit into the close, the S&P 500 extending its gains up about three quarters of 1%. You see it there at 55.26. That's the highest level we've traded at since the decline following the April 2nd announcement of those tariffs. Still a little bit to go to get to that closing high that day, 56.70. But there's definitely been a little bit of a tension release in this market. The volatility index in four days is down from 34 to 25. Market thrust middling today, but very strong in the last few days. five.

More than half.