Closing Bell - Closing Bell: Can Anything Derail this Record Rally? 6/2/26

Episode Date: June 2, 2026

We discuss what could be next for stocks’ record run with Schwab’s Kevin Gordon and Northwestern Mutual’s Matt Stucky. Plus, star analyst Dan Ives gives his instant reaction to the biggest headlines out of Microsoft’s Developer Conference. And, Goldman Sachs’ Greg Calnon tells us where he is seeing further upside in the market right now. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to closing bell. I am Frank Holland in for the judge Scott Wapner. We are live right here at post nine at the New York Stock Exchange. This make or break hour begins with another day of highs for this roaring market. Let's get straight to the scorecard with 60 to go in regulation. The SMP hitting a fresh all-time high. You can see it's up fractionally right now. Supported by some big moves in tech. The NASDAQ composite, however, pulling back fractionally. Marvell soaring on an endorsement from NVIDIA CEO. Jensen Wong is saying that maybe the next member of the trillion dollar club. We're also seeing the S-O-XX moving higher up almost 5% right now. HPE also surging on the heels of its results. Then we got the flip side of things. Alphabet, it's lagging. After saying it would raise $80 billion from stock sales to fund its AI buildout. We're also checking the sectors. Utilities and energy leading the charge with comm services pulling back a bit because of alphabet and healthcare also lagging. It all takes us to our talk of the tape. Can anything derail this record rally? We will ask our All-Star panel in just a moment. But first, we're getting some news out of Microsoft Developer Conference.

Kate Rooney is there and joins us now with the very latest as Microsoft is actually the biggest drag on the S&P. Kate, what are you hearing and seeing there? So, Frank, today for Microsoft, it's all about developers and really the big picture, long-term case for the company. These are the

people that are important. They're building the apps and the companies of the future in AI. Today, Microsoft unveiling seven new in-house AI models. It's really tries to diversify away from OpenAI. First is a reasoning model, says it's affordable, but at the same time built for efficiency and performance. They highlight the low token cost, which is especially important for developers for coders who are really grappling with

the rising cost of coding on AI, building on AI, also unveiling a video creation model, and then a speech-based model as well, plus an AI coding model for GitHub. This is very important. We talk about vibe coding. Developers are increasingly using AI to go off and write code. That area, an arena has really been dominated by Anthropics. So Microsoft today also rolling out they call Scout. It's an always-on personal AI agent working in the background, and then they are enabling OpenClaw to run on Windows. This is the buzzy open-source software that can direct essentially a group of AI bots

to do work on your behalf. OpenClaugh had really driven developers to the MacBook, the MacBook Mini in particular, Microsoft unveiling its own AI PC to compete with Apple, partnering with the MIDI on that. Finally, Microsoft making some waves in quantum. computing accelerating its projected timeline for a useful and scalable quantum computer taking that from 2033 to 2029. They say it's a 1000x improvement thanks to using AI actually full circle when we talk about AI for R&D. It's based on this new quantum chip that they just announced

called Myerana 2. We're going to talk about all of this news with Mustafa Selimian. He's the CEO of Microsoft AI alongside the CEO of Mayo Clinic. That is going to be coming up at its exclusive interview at 4 p.m. We're on 4.15, break. Back over to you. Are Kate, we're running with the very latest from the Microsoft developer conference. Kate, thank you very much. We're now joined by Star Analyst, Wedbush's Dan. Dan, nice to see you as always. Great to be here. All right. So, Dan, I just kind of mentioned Microsoft biggest drag on the S&P. Obviously, the SMP's higher, but it's one of the reasons why it's not higher as high as

it could be, I should say. You have a very bullish price target on Microsoft, 575, a more than 25% upside. What do you make of the announcements out that conference? today, does it change your view on the stock long term at all? Yeah, Frank, I mean, look, they're defending their turf. They're going after developers, and that's really front and center in this arms race that we're seeing play out. And I think these are the important steps, not just on copilot and build, but what ultimately will be Azure.

And that's why I think right now the market is mispricing Microsoft to what I believe is still going to be the monization phase that's going to happen next six, 12 months. We like everything we're seeing here at the developer conference. like everything you're seeing. I want to just very briefly, very quickly touch on that quantum news. Is that something that, because we're going to talk about cybersecurity in a minute, a lot of people see quantum as basically something that could really hurt the cyber sector. Is this quantum news significant?

We see a lot of surges in the stocks from time to time, but the news out of the developer conference today. It's a step out of look at IBM's playbook with Arvin, right? I mean, you want to see more exposure to quantum, given where Microsoft plays. And look, it's our view. That's a derivative of the fourth industrial revolution that we're seeing. And not just what we're seeing from government side, but this is one where you want to see Microsoft dive into the deep end of the pool. And I think this is just more and more what we're going to see from big tech as we're continue to see innovation expand. And I think it's accelerating a lot quicker than anyone would have expected, even though quantum's obviously been focused on some smaller companies that have now become pretty large.

All right. Also I want to hit on Alphabet. Your price target there at 370, just about a percent or two upside in your view. What do you make of this $80 billion equity sale that they're doing? And the fact that it's going to be in tranches. Look, I think that's a smart way to do it. And obviously, you see Berkshire as another sort of backer of it. Look, this, I mean, we're talking about a trillion dollars that's going to be spent in big tech next year in terms of cap-back.

So you know, this is going to be, if you look at out of tech companies, you're doing this, partial debt, partial stock sales. I actually think the market shrugging this off pretty well relative. I think it just shows right now, you go back a year ago, New York City cab driver is Barras for an alphabet. Look today. I mean, they are in a phenomenal position, you know, when it comes on the clouds, when it comes to Gemini. And I think it's a smart time to do this. You want to see them go on the offensive, not defensive. All right.

So your point about the timing. Earlier, we heard from David Solomon or Leslie Picker doing a great interview. He's saying right now there's more greed than there is fear in the market. So actually, I email with Alphabet. They say the $40 billion of this is going to start after July 1st, as opposed to right now. I mean, are you concerned that maybe sentiment could change? Solomon also talked about the lens that people are viewing these AI investments. That could potentially change.

I know it's only a month. I know everybody's bullish. But these days, a month seems like a very long time. Are you concerned at all that sentiment may change when it comes to the AI trade and the AI build out over that time? And I get, like, obviously, some of the concerns out there. But it's my view. We're still a third inning of the AI revolution, right, relative to where the, nine inning games going.

And we could definitely have sort of ebbs and fluids in this market. But when you look where Alphabet's position, I mean, they are, they're kind of front and center. I mean, they're top of the mountain right now. Amazon clearly is made up, you know, sort of narrowed the gap. Microsoft, I think, you know, obviously he's doing a lot of great things in terms of Azure. But look, Alpert can't think about weeks or months. We're talking about years. We're talking about fourth industrial revolution in terms of what they're going after.

All right. Dan, please sit tight. We want to shift gears just a bit, looking at Palo Alto, up nearly 60% this year, thanks in part to strong AI-driven cyber demand. The company reports after the bell. Our Sima Modi joins us now with what investors should be watching. Seema. Hey, Frank. Well, Paula Alto Network, CEO, Nick Escherra needs to answer two important questions tonight. Two important questions tonight. One is how we have concerns around mythos drive concerns and demand from the enterprise customer? And what solutions or tools is Paula Alto harnessing to? ensure businesses remain protected. As JPMorgan writes, the attack surface is evolving and expanding at an unprecedented pace. They point out that Mythos has discovered critical vulnerabilities that survived decades of automated testing. And many, Frank, are pouncing at the opportunity. IBM revealing a new security platform to identify vulnerabilities in the open source software space. CEO Arvin Krishna telling me last week that Mythos really is the driving catalyst behind that new

product. Cyberstocks, as you mentioned, have rallied in recent weeks. Expect competition from the AI labs to come up on the earnings call. In terms of numbers, the big metric to watch will be guidance for the fourth quarter and the fullier outlook. Remember last quarter, Palo Alto Networks beat on all major metrics, but missed on its lighter guide, and that's what sent the stock lower. Arcea Modi, thank you very much. Again, Palo Alto reports after the bell. Dan, want to come back over to you, looking at your price target on Palo Alto networks, a bit muted, very similar to alphabet, 300, about a 2% upside or so. But you say they have a product that's a bit of a game changer, at least potentially.

I want to make sure I'm pronouncing it right, Adira. You say they're the only vendor that's offering unified coverage across network cloud and identity at scale. Yeah, and Frank, also the cyber arc acquisition as well. I mean, that puts them in pole position along with Crowdstrike when it comes to cybersecurity. And I, you know, we talked about the SaaS apocalypse and what would happen to cybersecurity if you go back to March. That was way overdone.

It was a golden opportunity. I think, look, we're going to have a Jalen Brunson-like week for cybersecurity when it comes to Powell Alto and then Crowdstrike tomorrow night. And budgets are just going to increase with AI, with Mithos. We think going from 5% and budget is 10%, which is why this is going to be a golden aid for cybersecurity for the ones well positioned like Powell Alto. Dan, I really appreciate the metaphor. But by the way, I'm calling it. Spurs and 5. I know it's not popular around here, but Spurs and 5.

I think Nixon 5. We'll have to argue about that offline. I want to talk to you about the broader AI trade and just sentiment. Are we getting into bubble territory? A lot of people talking about just over enthusiasm, over exuberance. Earlier today, we had Rick Reeder talking about the momentum in the market. Then he also added, hey, I'm kind of concerned about so much momentum, but at the same time, the valuations don't seem to be overly stretched, specifically when it comes to tech. How are you viewing it? Well, Frank, I just go back to like 27, 28 times earnings, right? Relative, if you look at broader tech, and from all of our time in Asia, demand the supply is still, what, 12 to 1 for chips? When it comes to Nvidia and ultimately what we're seeing across the food chain, that's why the memory super cycle is going to continue to play out. And as the demand continues to outship supply,

that's not going to correct itself. And I think investors, we're looking at numbers that are probably 20% underestimated when you look at the next one to two years. And I think the bears will continue to be in hibernation mode when they can see AI in the spreadsheets. And that's why it's our view. We're going to see NASDAQ 30,000, driven by stronger earnings, stronger growth monetization, not hype.

All right, Dan, I'm saying this cycle is going to be longer than Wembegiana. Dan, always good to see you. Thank you very much. Thank you. All right. By the way, the Palo Alto CEO, he's going to be on Mad Money tonight at 6 p.m. Eastern, certainly in the Kesheurora, is going to have a lot to say about the Corps.

All right, switching gears once again, Goldman Sachs CEO, David Solomon, sitting down with our very own Leslie Picker at the Economic Club of New York. She joins us now with the highlights. Leslie. Hey, Frank. I was curious what Solomon made of all the new equity issuance expected to hit the market, most, if not all of which Goldman is working on, from SpaceX debuting next week to Anthropic, filing confidentially yesterday, and Open AI, reportedly looking to do the same as well as Alphabet's $80 billion equity raise. I asked him what he thought about the overall impact.

We are definitely in a moment where there's more grieve than there is fear. Okay. And, you know, that's one of the reasons why people that need this capital are coming to the markets, because the capital's available. And so if you're advising companies that need capital, one of the big piece of, like, base advice for 42 years of doing this, when capital's available, if you're capital consumptive and it's available, take the capital. Okay, if you know that you're going to need it. And so, you know, given the way equity markets are robust, debt markets are robust at the moment, I think you're going, you are seeing a lot of activity, and I think you're going to continue to see activity. Solomon also said there's unprecedented liquidity and wealth in the markets

to absorb this. He said he's encouraged by what he's seen so far. However, he notes something could change that creates more volatility given the size and scale of a, quote, capital speed race, Frank. our Leslie picker leslie picker leslie great interview just really insightful great stuff there at the economic club of new york thank you again thank you all right we want to bring in our panel schwabes kevin gordon and northwestern mutuals matt stuckie a lot to talk about gentlemen thank you both for being here uh kevin you're right here why don't we start with you what do you make of what we're seeing in tech today specifically Microsoft and alphabet it seems like investors well it's pushing back a bit we've got to keep in mind where the markets are pretty much all-time highs but pushing back a bit

today alphabet and Microsoft the two laggards and the s&p yeah it's interesting because, you know, whether it's the industry, at the industry level or the sector level, or at least thematically, if you think about something like semiconductors or, you know, big tech, if you want to combine tech and comm services and even parts of consumer discretionary, you're still getting a pretty significant lift from those parts of the market that are elevating the cap-weighted S&P 500. But I think that some of these, you know, more extreme moves for individual companies, even within the Mac 7. Sort of underscores a theme, I think, that we've been seeing for, frankly, the past year or two,

where there's been more dispersion and there's been more of a fraying among those names where they're not necessarily moving together as a monolith. There's a pretty big gap, actually, between a name like Nvidia versus a name like Microsoft in terms of their performance this year, but also just their contribution to the indexes return.

I'm not an individual stock analyst, but looking at it from the standpoint of how much is one subtracting versus how much is one adding to the S&P, this is another year in which you're seeing that dynamic take hold where there's been a pretty big split between the two. So I think it's a theme that will probably continue because those names are just not moving together as a monolith and they haven't been for the past year and a half.

You mentioned extreme moves, Matt. I want to come over to you. Marvell today. Last time we checked, it was up 20-something percent. A lot of people see that as potentially a poster child for some of the frothists in the market. It may be over-exuberance. When it comes to the chip trade more broadly, are you seeing that in this? Well, certainly those names have moved up quite a bit over the last couple of months.

A lot of it has been fundamental, though. We've seen CAP-X revised higher for the hyperscalers in 2026, and that expectation is getting more solid as you look into 2027. That's going to be a very strong growth year as you look forward to next year. And so while pockets of names like Marvell are certainly moving quite a bit higher in today's market, and overall, I say fundamentals are pointing to that direction. Maybe it's a little bit overextended relative to where numbers have been trending. But, you know, I think if you're looking at numbers where they sit today versus where they're likely to land over the next six to 12 months, they're likely going to be upwardly biased.

And so there's fundamental support behind this move, but, you know, certainly sentiments playing into it as well. All right. I do want to talk to you about the bubble issue. You gave us some great stats from January to February. We're talking about breath. 66% of SMP 500 constituents outperform the index from March 1st until now that fell down to 24. Should that be a concern? You know, I think it is somewhat of a concern. I think narrow markets just all else being equal are a little bit more fragile than the markets that are broadly participated in through high levels of breadth. And, you know, the lever for that has been just this movement rates. It's been somewhat a function of rising inflation expectations as a fallout from the conflict in the Middle East. And so as a result of that, you see interest rates move higher, breadth move lower. Hopefully what we see is some sort of resolution of the Middle East that pushes down inflation and expectations. that pushes down rates that broadens out the economy and broadens out markets. I think there's just naturally more sustainability in that type of market advance versus what we've seen in the last couple of months. All right, Kevin, I want to come back over to you.

I asked you about Alphabet of Microsoft. You gave me a kind of a stoic answer, but earlier on X, you weren't so stoic. He said things are getting silly again and non-profitable tech. Tech is back in kind of its 2021 territory. What does that mean? Well, I mean, I think it highlights in this whole discussion that you've been having, whether it was with Dan or Matt just now or even the interview. that Leslie had with David. I think the discussion around the sentiment environment, you know,

it's appropriate to point out some of the behavior that you're seeing that does harken back a little bit to 2021. And this run that you mentioned or highlighted in non-profitable tech, I mean, that's happening also with, you know, the heavily shorted names and the weak balance sheet companies, all of which were rallying in an extreme way off that 2020 low. Obviously, there are many differences today in the economic backdrop versus back then. So it's not a perfect analog. But I do think that this discussion around, you know, breadth and how many members are outperforming the index, those are more objective measures that you could just look at and compare it to any period. So, yes, it is the case that there is a weaker bread profile to the market

today, the fact that you haven't seen a material pickup in the percentage of companies above their 200-day moving average, certainly nothing consistent with the strength that you've seen at the headline level for the index. All of that starts to add up a little bit to, you know, make some more worrisome signals and signal that there's probably some sort of air pocket that's not far from us if that doesn't converge at some point soon. But, you know, that's very different than saying you're about to go into some severe recessionary bear market because the economic data don't support that case yet. Yeah, I mean, your nose to us, the economy looks pretty strong, but I do want to go back to that Solomon interview. You were watching it as well.

It was really interesting when he said there's more greed than fear in the market. And of course, for a healthy market, you need kind of a balance of both. Yeah. Where does that kind of demonstrate itself, the greed over the fear? And where should investors be cautious when it comes to the greed versus the people? So I still actually find, you know, I've been on the road almost every week for the past two months speaking, a good chunk of that speaking with, with, you know, our individual retail investors. And I find that right now, in a behavioral sense, there is definitely more of the greed aspect showing up. You look at fund flows, especially in the tech space. It's pretty stretched. It's pretty extended in favor of just that area. What I find is that there's still a relatively

healthy amount of skepticism and fear on the attitudinal side. You know, there's times when you have big splits between the two, but I find that, you know, you're probably not going to get into that more euphoric phase until you see everybody sort of jumping in on the attitudinal side. Not that, you know, the conversations I have are the only gauge for that, but, you know, there's still a little bit of a mismatch where I think there's some skittishness around, whether it's some of the large, you know, IPOs that are coming on, how much that might, you know, make even for more a frothier environment, or what you've already seen in some of the runs, whether it's in semiconductors in the U.S. or, you know, the 226 percent year-over-year-year

in Korean stocks. So all of that is still fueling more of, I think, a euphoric sort of nature or mindset on the behavioral side, not yet as much on the attitudinal side. Man, I want to get over to your attitudinal. You're a bit of a contrarian. So you like the small caps and the midcaps, and you like a sector neutral approach and kind of a equal weight approach. You're kind of going against what everybody else in the market's doing right now. Everybody else diving into big tech. Why do you want to take that stance? Look, you know, I think this stuff's at the margin. But yeah, I think direction. That's where we want to be positioned. And part of it's just the profile of concentration that we see in the market today continues to get even more concentrated with this move than last

couple of months. And, you know, history is a guide to us. I think narrow markets tend to broaden out over time, and we want to be positioned for that. And so despite things like, you know, the interest rates moving higher this year, oil prices and inflation expectations moving higher this year, you know, that backdrop shouldn't coincide with small cap outperformance. But in fact, that's what we've seen so far this year. And I think a result of that is, is just do different levels of expectations priced into those asset classes, small versus large. You know, if we start to see stabilization and interest rates and potentially even a roll over in rates because inflation expectations roll over as a result of oil prices moving over.

Let's just play out that scenario for a little bit. I think you start to see a resertion in a pickup in small cap relative outperformance, something that we had seen since the midpoint of 2025 carry in through 2026. So to me, I think it's a combination of things. It's a way to be a little bit contrarian. It's a way to look for diversification outside of concentration in the U.S. large cap space. And you're paying a lower price point, all else being equal.

And so to us, we like that combination. We still like, you know, cap-weighted S&P is in our portfolios. But, you know, at the margin, we're leaning into those opportunities outside of that space. All right, Kevin Gordon, Matt Stucky. Great to have you both here. Thank you very much. We want to send things over to our Christina Parts and Evelist for a look at the biggest names moving into the close. K-Parts.

Hi, Frank. Well, Jenerak Holdings. up about 5% after announcing its supplying power for an unnamed leading hyperscalor data center operator. Generac CEO telling CNBC earlier that the move towards powering data center infrastructure is going to fundamentally change the face of the company. Marvell technology surging roughly 29% almost 30% after Nvidia's CEO, Jensen Wong, said the semiconductor firm is set to be the next trillion dollar company, adding that Marvell's networking and connectivity chips are essential to computing tasks in data centers.

Marvell up 360% just over the past year, but if it needed to get to a trillion, the stock would have to go to over $1,100, far from there right now. Lastly, shares of Shake Shack are dropping roughly 8%, almost 9% after the fast casual burger chain cut its full year earnings outlook and second quarter revenue guidance,

Shake Shack, citing macro uncertainty and competition for the lower forecast. Frank, you a Shake Shack guy? You know, I'm not really a Shake Shack, I don't hate on Shake Shack. I'm not really a Shake Shack for it. more like five guys when it comes to a fries, maybe? I do like the fries there.

They make really good fries. Christina, we'll talk about our restaurant preferences when you come back. All right, we're just getting started here on closing bell. Coming up next to retail names moving in opposite directions with latest earnings are revealing about the consumer today. We are live from the New York Stock Exchange. You're watching Closing Bell right here on CNBC.

And welcome back to Closing Bell. We're tracking two big moves in retail today. Our Brandon Gomez is following what's dragging dollar. General shares lower, but first, Gabrielle Fon Rouge, on what has Victoria's Secret, headed for its best day ever, best day since the spinoff in 2021. But that's ever, Gabby. Yeah, no, so shares in Victoria's Secret are surging today after better than expected Q1 earnings. The laundry retailer posted earnings per share of 60 cents, which was double consensus estimates. It also saw better than expected sales. The strong quarter,

along with lower tariff rates, led the company to raise its guidance and issue a bullish outlook for the current quarter. I spoke to CEO Hillary Super, and she said the growth the retailer is seeing is across all income groups. But crucially, the highest growth is coming from two distinct segments, those making under $50,000 in income and those making over $200,000 in income. She said it shows, quote, in a world full of choices, she's choosing us. Now, during the quarter, we did see higher tax refunds benefiting a lot of retailers, but finance chief Scott Sakella told me the extra stimulus didn't have a major impact. He said trends have so far remained consistent in the current quarter,

even after those tax refunds have dried up. Now, it's also important to note that the short interest on this stock was high coming into the print. So that is playing a big role in this move. Frank. Yes, very high, up to about 19 percent, I believe, according to S3 Capital. So that could be a factor. By the way, Victoria Seeker ringing the bell here at the New York Stock Exchange. So we're going to see Hillary Super on this super day for Victoria's Secret. All right.

Now let's get to more on that Dollar General moves. Our Brandon Gomez right here on set with this, much more on that story for the discount retail. Yeah, Gabby really hit the ends of the income spectrum. Dollar General had commentary on what's happening in the middle there. Delivering stronger than expected earnings, beating on profits, raising its full year earnings outlook. As more shoppers continue to look for value, now shares are lower after initially rising on higher traffic and larger baskets. More consumer commentary was on the call. CEO Todd Vassos saying the company's core lower income customer remains under pressure telling investors

there's a lot of distress right now with sustained inflation and gas prices largely above $4 a gallon. At the same time, the company says it's seeing an accelerating trade in effect, with higher-income shoppers increasingly turning to discount retailers. I've also saying the largest increase in customer counts come from those households earning more than $100,000 a year, adding that the drug and grocery side of the business is where it's really seen the most trade-ins. Now, still, management did not raise sales outlook, which may have spooked investors throughout the day, along with warnings of more volatility ahead. Again, consumers are having to deal with

these higher prices, fuel, whatever, what have you. All right, so you're talking about those consumers making over 100 grand, so it sounds like they may be trading down. I was just looking at the price of gas. A year ago, it was 314 a gallon for regular. Now it's at 429. Did management say that's a factor in any way? They definitely talked about it as a factor, not only in what folks are putting in their shopping carts, but also the frequency in which they are taking trips to the store, right? You have a more cautious consumer about how many times they're leaving the house, how they're actually using that fuel. So they're going to places like the discount retailers,

like a dollar general, or even some of the wholesale retailers like Costco and BJs, where they can fill up on that fuel and do their grocery and necessary shopping. I know I'm getting much more mindful on how many trips I'm taking everywhere. I mean, you look at those gas prices. I think you just have to these days.

All right, Brandon Gomez, thank you very much. All right, still ahead. Greg Collin of Goldman Sachs joins me right here post nine as we close in on the record highs across the major averages. Closing Bell. We'll be right back. And welcome back to closing bell.

Markets are extending their record run today with the S&P hitting a new all-time high. That's bringing Goldman Sachs, asset management's head of public investing. Greg Collinanin. Greg, great to have you here. Good to be here with you, Frank. All right. So how should we decipher what we're seeing here? We're at war.

Obviously, we see inflation. There's a lot of concerns about the AI buildout and maybe being a bit frothy. Still, S&P hitting a new all-time high. Yeah. The most common question that we get from clients every day is how do I reconcile what I read every single day in the news with what I'm seeing in markets. And today is another example of that. And then what we say to clients is, look at earnings. Earnings are the story of this entire moment right now.

We came into this earnings season expecting 12% earnings growth, and we're going to see something close to 27%. That's a significant number. That will be the sixth consecutive quarter of double-digit earnings growth. So that's the piece of information to watch for. You may say, well, it still feels frothy. It still feels like there's a lot of momentum and movement in that. And what we would also say to that is the S&P is up something like 11% this year,

and valuations have actually come down. So it is all about earnings, and that's the thing we would focus on with clients. Okay. Does it feel frothy or is it actually just frothy? You look at a stock like Marvell, you look at the chip trade. Also, Kevin Gordon from Schwab, he was here earlier talking about non-profitable tech, kind of moving up to the highs that we haven't seen since 2021. Isn't that officially frothy?

Anytime you have markets at record highs, it's important to be vigilant on risk and to be humble as investors. And so that's what we take the approach on today. We would still say that there's plenty of opportunities around the world to invest, and we bucket the categories into three. Investing for opportunities for growth, investing for opportunities for income and being intentional about income, and the third is to be thoughtful about how to be defensive in your portfolio.

All right. You like emerging markets as well. Outside the U.S., other central banks are actually hiking. Doesn't that kind of hurt the narrative when it comes to emerging markets? Not necessarily. Emerging markets are a key example of playing the AI trend outside of the United States. And so if you think that AI CAP-X is going to be something like a trillion dollars globally, two-thirds of that is going to be spent on data centers and AI hardware. And AI hardware in particular is predominantly built in emerging markets in Asia.

And so we're preferential towards emerging equities. We're also preferential towards emerging debt. And so if you look at emerging debt, this is another example where you can get three to 400 basis points above U.S. Treasuries. You look at the fiscal position, which is, quite frankly, better off than a lot of other developed markets. And you get real income or real growth, read the GDP. That's also, you know, sometimes better off than other situations as well. So we think emerging markets still present lots of good opportunities, and that's a recommendation that we're making to clients as well. All right. So great, I know you've been watching CNBC all day because the boss was on.

Yes. David Sullivan was on. I know you saw the whole thing. In case you're watching, David. He was watching everything. Isn't what you're talking about when it comes to the AI trade in Asia, even here in the U.S.? Isn't that the greed that he's talking about that seems to be overcoming the fear? Is it possible that right now we're at the peak of this AI trade and that maybe it's

time to pull some chips off the table and maybe play the broadening trade? We heard another guest say he wants to be positioned for the earnings growth to go to other parts of the market. David is a thoughtful risk manager and what he's trying to emphasize to all the leaders of Goldman's and to market participants more generally, it's incredibly important to be diligent on risk when you have markets at these levels. He's not calling it a bubble per se. He's not calling it anything else like that.

He's just saying focus on risk, be humble, and that's what we're doing at Goldman's Xx. You're also a bit of a contrarian. You're kind of bullish on things like levered ETSs, you know, buffered ETFs, I should say. You're trying to get into debt right now. Everybody else is excited about these IPOs, SpaceX, Anthropic, OpenAI. Why are you kind of pushing towards these other kind of hedges, if you will, when everybody else is kind of going to the moon? Because, Frank, we try to build entire portfolios for our clients.

We're not just trying to get at the hot dot or whatever is, you know, on the news today. So we're trying to build portfolios that focus on growth, income, and being defensive. And so income is another place where we think it's also very important to be intentional about your allocation. Municipal bonds, for example, they have four to four and a half percent after tax yields on a tax equities. on a tax equivalent basis, that's like six and a half to seven percent. That's a good opportunity set for all investors and investors in particular in higher tax brackets. We'd also say it is important to be thoughtful about risk and thoughtful about valuations more generally. And so having investments in there like buffered ETFs, like diversifying alternatives,

is also an area that we think makes a lot of sense. All right. So with the markets at record highs, I think we'd have to talk just a little bit about downside protection because there is that risk. a lot of notes about the potential for a pullback. What's the play for downside protection in this market? When we see the equity market just moving high, how do you protect yourself? You protect yourself through some of these strategies that I was just talking about. So buffered notes, buffered ETS, I should say, also liquid alternatives. The main piece that I would point out here is how do you be thoughtful about building a whole portfolio,

being mindful of diversification? This is a moment in time when individual investors have more tools in the toolkit than they've ever had before. And so either using an advisor, doing these things directly, individual investors used to just focus on investing in a 60-40 portfolio, and that was kind of their set-it and forget it. There's way more tools in the toolkit today, which I think is a great advantage for individuals. I want to say, you said direct indexing is one way to play this. We just heard some other guests say, you don't want to be in the index. It's just too much differentiation between different stocks, whether it be valuation performance. We're seeing stocks with good earnings actually pulled back because they just weren't good enough.

When you're saying direct indexing, are there certain indexes that you favor more than others? Direct indexing is really a concept that's focused on tax lost harvesting. So as an individual, what you're actually focused on is what is your after-tax return, not your pre-tax return. And so being thoughtful about your core allocation, having a tax component to it is really, really important. Greg, great to have you here. Thank you very much. Great to be with you, Frank. All right, coming up next, we're tracking the biggest movers as we head into the close.

But first, a special programming note, are Sarah Eisen. We'll be sitting down with Israel's prime minister, Benjamin Netanyahu, tomorrow at 10 a.m. in a CNDC exclusive interview, you do not want to miss it. Closing Bell, we'll be right back. Less than 15 minutes until the closing bell. Let's get back to our Christina Parts and Evelace for a look at the key stocks to watch. Christina. They're dropping over 8% after Goldman Sachs downgraded the stock,

saying the FinTech company is just entering a period of heightened competition, specifically in tax. When reporting Q-3 results, Intuit said TurboTax did not have the overall tax season. It expected into it as the parent of TurboTax. USA Rare Earth, Uproids, roughly 3% after announcing an over billion dollar investment toward building a magnet manufacturing and refined metals facility in South Carolina. The announcement follows yesterday's news that USA Rare Earth will actually invest more than $200 million in France through 2030. And Octa shares dropping

roughly about 2% right now after Mizzuho downgraded the stock to neutral from outperform. Analyst over there see the identity security platform as just well positioned to capitalize on agentic AI but are not yet convinced that it can re-accelerate growth over. than near to medium. All right, Christina. Thank you very much. Our Christina Parts and Evelace. Coming up next, major averages headed for another record setting close, while Bitcoin is on Facebook's worst first half of the year since 2022.

That much more when we take you inside the market zone. All right, welcome back to closing bell. We are getting some news on the private credit front. Cliffwater sending a letter to shareholders that the fund received redemption request totaling 17%. It's the latest fund to announce redemption. All right. We're now going to move on to the market zone right here on closing bell. We've got Mike Santoli and Wilmington Trust, Megan Shoe. They're both here to break down these crucial moments of the day. Plus, Oliver Renick is standing by live from the Cibald Global Markets in Chicago, tracking the action in Broadcom. And today, McKeel has much more on the sell-off in Bitcoin. Mike, as always, we're going to start off things with you. What are you seeing in today's market? Did you think much about David Solomon talking about the greed versus the fear in the market? Sure, and I think that, you know, that's just an observation for anybody who's been watching.

There's a lot of this channel of the market that there's a ton of hyperactive activity, people essentially buying the winners and then buying them again. And so you've had this buildup of access and parts of the market getting stretched and a lot of kind of comfort being taken in the earnings momentum underneath some of the other parts of the tech trade. All that makes sense. It doesn't amount to necessarily an imminent warning of anything that's going to go on. I look at the market action day to day, and it's still kind of on track and in gear to a degree. Lots of different stocks going their own direction, lots of rotation within the market,

keeping volatility down, and then these little incremental moves higher in the S&P 500 to log consecutive days up and records. That's all to the good. I still think that there's just not a lot of unexploited good news out there, at least in the moment. So I think that's what you want to be on guard for at a time when you do see some of the greedy activity taking home. And Mike, what do you have coming up on O.T? Powell Alta, one of the companies reporting, what else is going on? For sure. And we are going to have an analyst to break down those numbers as soon as we get them. And by the way, that stock has surpassed almost all price targets on the street.

So the software versus semi-trade is very interesting. We're also going to take a look at the volatility setup and how retail traders are impacting things with the guests from CBO as well. All right. Mike Santoli, OT anchor. Can't wait to see you after the bell. Mike, thank you very much. when you get over to Oliver Wrenick live from the seabote with much more in the action in Brogcom. Ali. Hey Frank, looking ahead to tomorrow's earnings at over $2 trillion market cap,

Broadcom is the silent Mag 7 winner, a giant that can move fast. Broadcom's ups 37% on the year as the business toes the line between hardware and software. It looks like options traders think earnings tomorrow could be firing on both those cylinders. Of the nearly $1 billion in options premium traded on. on the stock today, more than $800 million was tied to calls, and more than twice as many calls were bought than puts. Options pricing currently expects a roughly 8.5% move after the report, which is a little above the median reaction of 7% in the past four quarters. Apparently, traders think that pricing is more than fair, because the most popular contract right now

by volume, which also did about $20 million in premium, is the 500 strike call expiring Friday. It goes for over a little 12 bucks, meaning bulls in that option contract need Broadcom to ramp at least 7% into the weekend, Frank. All right, Oliver Renick live from the CBO. Tanaya, I want to come over to you. Let's take a look at the action in crypto today. Yeah, Frank, Bitcoin is back under 70K for the first time since April and crypto stocks are following lower. Michael Saylor's strategy is leading the decliner's and then other Treasury firms seeing the biggest losses in this sector. And this started yesterday, Frank, after strategy, report.

reported it sold a small amount of its Bitcoin that spooked investors pushed Bitcoin lower, which sparked almost $600 million in long liquidations, which accelerated the sell-off that we're seeing. So Bitcoin, of course, was already struggling to climb out of this trough. ETFs just posted 11 straight days of outflows. That's their longest outflow streak ever. And, you know, uncertainty around the U.S. around war has been weighing on Bitcoin while stocks trade higher. So that, you know, makes investors question. Bitcoin's two main narratives. One, that it's digital gold that should benefit from geopolitical

uncertainty, and two, that it trades like a high beta tech stock. So sentiment kind of crumbling here, Frank, but Bitcoin's been here before a lot of conviction being tested. All right, today, McKeel, with the very latest on the cryptocurrency complex. All right, now we want to bring in our Megan Shoe, our Megan Shoe from Women's Trust, not our Megan shoe, but I like you a lot, Megan. Today, we look at the Dow, I like you too. The Dow and the S&P on Pace for records, but you're saying, the market's actually headed for a breather. What are you seeing out there?

Yeah, Frank, I mean, if we end this week on a positive note, it would be the 10th straight positive week in a row, which is a streak we haven't seen since the mid-1980s. So the momentum has been incredibly strong. It's for a lot of good reasons and a lot of optimism, as well as really strong demand around the AI investment cycle. But still, we are moving into a period, sort of moving past earning season, which has been a tremendously positive catalyst for the markets. And now we are left with kind of the summer lull, trading activity might slow a little bit, and we still have a lot of geopolitical risk on the horizon.

So I'm not necessarily calling for a sharp reversion in the market, but I think it makes a lot of sense to see it pause here or even pull back slightly and introduce a little bit more volatility as we move into the market. summer months. Okay. Since the Iran War started, the S&P's up just about 10 and a half percent, really fueled by strong earnings, but you're saying the market's not really pricing in the oil disruption. Right now, looking at oil up over 1%. WTI trading in about 93 bucks a barrel. Of course, it was higher than that. So when do you see the impact of these higher oil prices? What's not priced in? What do you see coming down the line? Well, the way I see it, I think the market is expecting resolution in the next couple of months, which might be a very fair assumption. In this case, though, I think we have to recognize that there's a very fat left tail, if you will,

which is that if it does not go well, we are in a very historic oil supply disruption. And that is going to start to bite on manufacturers as well as consumers. I mean, one of the reasons consumers have been able to weather higher oil prices and higher energy prices thus far is because of a really strong income tax refund season. We are moving beyond that as well. And I think the market's just kind of got a little bit of a rosy scenario. That's not necessarily wrong, but I think we have to recognize that there are some pretty significant downside risks if oil shoots materially higher. And that doesn't mean you get overly defensive in the portfolio. But for us, it means we just have a little bit more interesting.

insurance on. So we are staying allocated to higher quality managers, some strategies that have a little bit lower beta, lower volatility, and also rebalancing the portfolio to capture some of the gains that we've seen and some of the really strong parts of the market like technology and buying some of the losers, which in this case might be staples, it might also be fixed income where rates have moved higher. All right. So you keep talking about risk. It sounds like you're speaking to some of what David Solomon was saying. And the great interview our Leslie Picker did, that there's more greed than fear in the market. So you're saying that it seems like investors need to have a little bit of fear.

So with that fear, how should they position? How should they protect themselves from potential breather or downside? I know you're long-term bullish, but for this short-term intermediate time, what should they be doing? Yeah, and I think you're making a very important distinction, which is that short-term, we could see a bit of a pullback in the market. But longer term, we're still constructive. We are still fully allocated to equities. we are still overweight to growth picking spots within technology where there's obviously a lot of dispersion. And then in the shorter term, as I said, rebalancing the portfolio is a great way

to take a little bit of risk off the table because there has been a lot of drift in some of those parts of the market that have moved significantly. But I would not get overly defensive here. Shorter term, I think we could see some chop, but I would expect it to be pretty ordinary market volatility and long term we're still constructive. The big swing factor still is the consumer where it's very bifurcated, a little bit on the soft side, but I was encouraged this week by the improvement in the ISM manufacturing. You can see it's in the green across the board. The Dowell pays for a record closed yes and piece. Speaking out its record closed as well. That does it for closing bell now. We're coming over to overtime with militant.