Closing Bell - Closing Bell: Lean into the Record Rally? 9/15/25

Episode Date: September 15, 2025

Should investors keep leaning into the record-setting rally? We discuss with New York Life Investments’ Lauren Goodwin,  Bartlett’s Holly Mazzocca and Wells Fargo’s Scott Wren. Plus, Frederic Mishkin – former Federal Reserve Governor – tells us what he is expecting from the Fed. And, Fundstrat’s Tom Lee breaks down his post-Fed playbook.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Thanks very much, Brian Sullivan. Welcome to closing bell. I'm Dominic Chewin for Scott Wopter today. We are live from Post 9 at the New York Stock Exchange. The S&P 500 and NASDAQ hitting all-time highs and heading for a record close as well, kicking off a very big week ahead for investors. The president signaling that U.S.-China trade negotiations are going well, and Wall Street is bracing for that key Fed rate decision on Wednesday.

We're going to hear from former Fed Governor Frederick Michigan in just a month. moment. But first, here's a look at your scorecard with 60 minutes to go in the trading session. Right now, the Dow is just about flat on the session, 45,861. The S&P is of three quarters of 1% to 22,6008, and the NASDAQ is up about two-thirds of 1% to 22,307. Driving a lot of that are Tesla shares right now in the green as CEO Elon Musk boosts his stake by about $1 billion worth. Meanwhile, Well, NVIDIA share is moving lower after China accused the company of violating anti-monopoly laws. And then Google parent company Alphabet joining the likes of Microsoft, Apple, and NVIDIA in rarefied air. We're talking to $3 trillion market cap club.

We're going to speak with a shareholder about both all of those names, in fact, in just a moment. But right now, it takes us to our talk of the tape, should you continue leaning into this record-setting rally for the NASDAQ and the S&P? Let's now ask New York Life's Lauren Goodwin. She joins us now. Lauren record highs for the S&P and NASSEC. It's like a broken record at this point. Did anybody, including yourself, really expect that we were going to see this constant ratcheting up, not massively so, but a slow meltup of record highs throughout the course of 2025?

I don't think so, especially not after Liberation Day. And my estimation is that we are likely to see market jitters associated with all the policy change that we been getting. And that policy change is starting to make its way into the economic data, in inflation data, in jobs data, et cetera. But at this point, my expectation is that we might not really see the worst of those impacts until next year. And so we're looking at a rally that's pretty healthy through the end of the year. So a record that's healthy because in many ways there is an expectation for those interest rate moves. Are those interest rate moves necessary in your mind, given the economic backdrop we've gotten? It's muddied at best at this

point. There's so much conflicting data out there. But is that rate cut path something that the market needs to hold on to? I think that this first cut has become necessary for that market confidence. And the reason for that is a little bit the weakness in the labor market that we've seen and some, let's call it insurance, let's say, to get ahead of an otherwise pretty healthy economic cycle. But we're not convinced that this rate cut that we do believe we'll see 25 basis points on Wednesday is the beginning of a consistent interest rate cutting cycle from here. I think we are likely to see rate cuts ahead, but one, every meeting, we think the market's getting a little bit ahead of itself based on the data that we're seeing out there. That's not only

the risk to inflation, but also, as you mentioned, financial conditions are so loose. Equity prices are high, bond valuations are high, the availability of credit is quite healthy. That's a pretty constructive market backdrop. We've heard a lot of folks talk about this idea of where the focus lies with the Fed right now. The dual mandate is employment. It is inflation. Which one comes first? It seems like it's tilted more towards the employment job side of things, less so on inflation. But amidst all of that, is the backdrop good for an interest rate cut at this point? Yeah, so I completely agree that the Fed's focus has shifted towards the labor market over inflation. And Chair Powell was pretty clear about that in his Jackson Hole speech. He said

that our base case, though there are reasonable risks outside of it, is that the increases in prices we're seeing are likely to pass over time. That expectation, though, that balance of mandates can absolutely shift. And I think it would be hard for the market to continue pricing in 75 basis points of cutting this year, another 75 next year, if we start to see another 0.4%, 0.5.6% month-on-month inflation figures, which I do think could be coming down the pike. And so, Please. No, so if you have that scenario, there are parts of the market that have been maybe off limits to certain investors, given certain concerns about valuations vis-a-vis rates, other parts of the market that have been called values. So where exactly then does that tilt you as an investor towards what you should be looking at for the next six months? So here's the really challenging thing. Valuations are high across asset classes, but the things that are expensive in many cases are expensive for a reason. And those are the things that I think are most likely to actually benefit from this cut in interest rates. Typically in an interest rate cutting cycle or if the economy is re-accelerating and there are some signs that that could be the case moving forward, you would expect to see a real broadening in activity, small caps to outperform, for example. In this case, a lot of the run-up invaluations that we've seen is not just about the economic cycle, but also

about structural improvements and ideas related to things like artificial intelligence. We also have seen credit spreads tighten and tighten and tighten, not only because the economy has held up, but also because of Fed programs that insured good corporate cash balances. In an environment where 25 basis points are coming off the top, the only thing that really changes for those areas of the market is that you might see more money from the money market funds moving into bond markets. You could actually see valuations move even higher as a result of this Fed move. All right. So Lauren, stay with us here because that's not bringing another voice of this conversation, Bartlett's Holly Mazaka, and also Wells Fargo's Scott Wren as well.

You guys both heard what we just spoke about with Lauren here. So I'm going to go with you, Holly, first on this one. As you talk about the markets at or near record highs again, Lauren laid out the case for that broadening out trade, also this idea that we're watching those certain key parts of the market. Is this still a trade that is contingent upon names like Nvidia, Microsoft, Apple, and others leading the way higher? Well, we certainly think that there's a level of interest here for the AI trade to continue, and that's what we're seeing. We are, though, looking for how that trade can expand beyond the Magnificent Seven. So while we're long-term continue to favor those big tech names. We're also looking for opportunities that

start to look at how you're seeing productivity engage across the market. Okay, so that productivity being engaged across the market, where does it manifest itself most clearly in your mind? What parts of the market do you really start to see it really evident, that it's the path that investors should be taking? One area where we are seeing it is in the industrial space. And there's stocks like Eaton that we really favor in this environment and area because they are not only an AI play and a growth of the data center play, but they're also looking beyond that as we continue to see the modernization of our electric grid. We're expecting the U.S. electricity demand to grow sixfold in the next six years.

This is an impressive amount of growth, and there are lots of companies that will benefit from it as we start to look beyond just the impact of those Mag 7 names. All right, so AI and Mag 7, Scott, have been a big part of this story so far. We also broach the idea that the rate picture is something that has to be considered as you look at the future path for markets. In your estimation, how much is the fundamental story behind AI or the growth rates there the more important or least important part of the market compared to things like the macro rate picture? Well, Dom, I do think, you know, I mean, clearly the market expects a rate cut this week, and, you know, we're almost certainly going to get one.

But I think the AI spend, the AI CAPX is a huge deal here. And really what we saw in the first couple of quarters of the year, I mean, let's face it, earnings blew away what the expectations were. They doubled it in both the quarters. And a lot of analysts thought maybe we'd see some backing up of, you know, CAPX is going to be a little bit less. were a little cautious. Instead, it seems like most of these big companies, they either held their CAP-X level steady, or they increased their estimates. So, you know, there's a lot of this market rally built on AI CAP-X. I don't think that's going to change anytime soon, but I do think, you know, you mentioned broadening. You know, as we move between now and the end of 2026, I think

it's likely that, you know, the MAG-7, MAG-5, MAG-7, whatever it is this week or month, they're earnings growth rates are likely to slow some. You can't grow 75% a year-over-year your earnings. And then we're going to see a broadening out where the other 493 companies, their earnings improve as we move through next year. So I think it'll be a little bit of a broadening, but these big cap growth names that have great products, great demand, great cash flows, I think, you know, it's correct to say they're likely to take the market higher, which over the next 14, 18 months, we think it is going to go higher. Holly, there's also a case being made right now that as you start to see interest rates

hypothetically move lower in a certain type of trajectory. It does make holding cash and money markets a little less attractive incrementally. It does power some of those valuation-type stories. Is it about looking for catch-up trades at this point, or do you kind of just go to where the momentum has been for the past couple of years now? We're expecting to see that market breadth continue, as Lauren mentioned as well, this idea that there are broader opportunities out there. And when you look at analyst expectations, the expectation is that the magnificent seven earnings will start to moderate over time while you see this breadth expand to the financial sector, to the industrial sector. You could see the consumer discretionary

continue to do well in this space also. All right, Scott, what about some of those interest rate sensitive parts of the market that are not, say, small caps or that broadening out. Maybe it is defensives that maybe have a little bit of a case to be made right now given valuation concerns. Do you think that there is still a role for things like utilities, real estate investment trust, health care, or otherwise? Well, Dom, I tell you, besides technology, the two sectors were overweight are financials and utilities. And normally, I mean, you know, let's face it, utilities historically are kind of a snoozer in where people hide when the economies are anticipated to turn down or you're in a recession. But, you know, with this AI cap-ex spend,

you know, you guys just mentioned the electrical demand. I mean, there's going to be so much more demand for utilities, you know, natural gas. We have to really improve the grid. And so utilities, not only do they have some defensive qualities to them, they pay a decent dividend and you know we're going to turn on the lights no matter what happens. They also have this secular story or at least over the next five or 10 year story where we're trying to build out the grid and they're going to benefit there. But as far as something like staples, I mean we don't have we don't have interest in getting defensive and we're trying to be patient here. We'd love to see a you know if we saw a 10% pullback. We'd like that because I think it gives you an opportunity

to maybe take a little bit of money out of the bond market and then you know put it back towards stocks. So we're positive on the economy. Modest growth this year, a little bit better next year. And I think stocks are going to be the outperformers as we look ahead. All right. Lauren, to put a point on this, Scott mentioned the amount of money kind of moving around the bond market. There's obviously been money moving into the bond market. And last week's 10 and 30 year bond options kind of showed it, especially the 10 year. What is driving the demand for the long end of the curve, given everything that we have in terms of headwinds for that? Well, we're still quite focused on the headwinds, to be honest,

but the case for adding duration at this point is clearly that the Fed is cutting, that the U.S. economy is outperforming, that some of the concerns with respect to debt sustainability or the risk, let's say, of a blowout in the long end, appear to be in the rearview mirror, at least for now. So it creates a more stable backdrop in which investors can treat U.S. assets with the deference, let's say, that they've typically seen, especially in the treasury market. All right. Lauren, Holly, Scott, thank you all very much for joining us here. We'll see you guys again soon. All right, meanwhile, Tesla shares are surging ahead for a five-day winning streak

after CEO Elon Musk disclosed a purchase of more than two and a half million shares. Let's now bring in a Tesla shareholder, CNBC contributor, Sandhills, Global Advisors, Brenda Vengello. Brenda, this is a scenario where a lot of folks have been looking for some kind of catalyst for Tesla to resume a sustained trend higher. Is this the one? I think it's one of many catalysts that are out there, but I think it's definitely a great vote of confidence. I mean, there was so many questions about whether Elon was really focused on Tesla for a period of time and whether the work that he was doing with the government was really damaging to the brand. And, of course, that came in the backdrop of a tough moment.

for EV sales, but I think if we look at some of the announcements, I mean, this is a company that isn't standing still. They're still innovating. Just last week talked about a new utility scale battery configuration that should make it faster and more cost effective for that to be implemented at the utility side. Elon also talked about a new, the next generation chip for cars that will be 40 times better than the current chips being used. And then lastly, we also have learned, you know, it's going to be up for vote at the upcoming board meeting later this year about whether or not Tesla should invest cash into XAI. And from MISI, I certainly see a lot of people clamoring for exposure to private companies, especially the larger private companies out

there. So I do think that that is going to be of interest for a lot of shareholders to be able to gain exposure to that part of Elon's companies as well. Brenda, are you as a shareholder concerned that Elon Musk is not as focused on Tesla as he should be given all of those other private market obligations and everything else in his kind of ecosystem? Are you worried or as a shareholder do you feel like this is a way to really keep him engaged in Tesla? Well, I think this has been a question for a long time, right? I think back to even the days when he was buying Twitter or trying not to buy Twitter. And that also was a very distracting period where shareholders really questioned his focus on the company. But it was even at that time that he had an analyst event and really showcased the breadth of other layers of management at Tesla.

So I do think that he has the title of CEO, but maybe his role at the company is not really what we normally think of as a traditional CEO. So I do think he has hired good people to be in place to manage the business. I think he's certainly personally excited about a lot of the innovation happening there. But sure, as a shareholder, would we like to see him a little bit more focused on the company? Absolutely. I do think this announcement of his purchase of another a billion dollars or so of stock is a great effort to show that he still cares, although relatively speaking, it's a small

piece of his overall share of the company, but nevertheless, I also think it helps temper some of the concerns about his pay package, which is also a bit controversial, and will be voted on the upcoming board meeting. All right, Brenda, while we have you here, because you, you are in the heart of all things, kind of Silicon Valley. Can we talk about two other names in the news? Between Alphabet, parent company of Google, and NVIDIA, we've got the $3 trillion club now for Alphabet.

We've got some AI chip issues, maybe monopoly concerns out of the Chinese Communist Party. How exactly does that affect how you view both of those stocks as a person who invests in these tech companies? Sure. Well, I think we've learned, you know, as time has gone on, we've learned more about where we're at in the AI adoption cycle, and I know there's been some questions about that, particularly

relative to NVIDIA, and whether we're at peak or not. I don't think that we are. Unfortunately, NVIDIA is caught up in this geopolitical mess between the U.S. and China, but I do think that their technology will prevail. They still have the best technology out there, and there still is a ton of demand, including from areas definitely outside of the U.S., with sovereign nations, and others that are still building out their infrastructure. So I still think there's a great gross story there. Google were past the antitrust debacle that was weighing on the stock for a while. And I think there's still questions about how traditional search will fare in this market

with so many other alternatives within AI. But there's no doubt that Google has spent a ton of money and time and effort over the last decade investing in AI. and really does have some strong capabilities there. So I do think the stock trades at a discount to many of the other names for that reason. But so far, they've really proven that the company is still growing, and they're actually still in the game. All right. Brenda Vengello, for all things, tech, thank you very much.

Have a nice day. We'll see you soon. Let's now send it over to Christina Parts of Nevelas for a look at the biggest names moving into the closing bell. Christina. Thank you, Dom. Well, shares of Western Digital. They're climbing right now after the storage drive. maker did say it would raise prices on all of its hard drives. The company citing unprecedented demand

across its portfolio, and it comes after a similar move from rival Sandusk. That's what you're seeing shares up almost 5% right now. That news also causing shares of fellow data storage company Seagate to rise. It's actually this top performer in the S&P 500, currently up almost 8%. And then lastly, Aklo shares continue to store as well, hitting an all-time high. There's no particular news today, but it comes amid rising demand for nuclear and energy. And so that's why you're seeing shares up over 14%. They've climbed over 30% just over the last week. Tom? All right. Christina Parts in Elvis. We'll see you later on this hour. We are just getting started here on closing bell up next. Former Federal Reserve Governor Frederick Michigan is standing

by with what he's expecting from this week's highly anticipated Fed rate decision. What is at stake and what it might mean for your money that's coming up? We're live from the New York Stock Exchange. You are watching Closing Bell right here on CNBC. Welcome back. I hate to say it, but maybe it's obvious for some people. There are a lot of eyes on the Fed this week as investors await Wednesday's big rate decision. So here with what's at stake is our own CNBC senior economics correspondent Steve Leesman and Steve, there are a lot of moving parts. Rates is just part of the story. Even personnel is at play.

What is going to happen this week? Yeah, there's a lot for those eyes to be looking at with a little Fed meeting mayhem. Just under 18 hours to go before the Fed begins its two-day meeting. Unclear how many voters will be there. Relative confidence, however, in how the voters will vote. Here's what's in play right now. The administration asked for an appeals court to overturn the cooking junction against her firing by the president sometime by today. So we're watching the docket.

The Senate's supposed to vote on the nomination of CEA chair, Stephen Meyer, and so we're watching the Senate. Close your vote is supposed to have it at 5.30, full vote at 8 o'clock. So there could be 10, could be 11, could be 12 voters at the Fed meeting tomorrow. We don't know. May not know till late tonight. Beyond personnel, the Fed has to deal with economic issues, inflation running above the 2% target, unemployment, ticking up, and they have to find a compromise between hawks and doves, both worried about different sides of the mandate there.

The futures market, not troubled by either the personnel or the economics. issues, they overwhelmingly are priced for three cuts this year, one at each of the remaining three meetings. If Myron is approved, there will be considerable speculation about what you might call the Myron dot. President Trump was complained that the funds rate 300 basis points too high. No Fed official has a future dot anywhere near that. We'll see where Myron comes in. He remains, however, the chair of the President's Council of Economic Advisors on unpaid leave of absence. So it remains to be seen if we forecast deep rate cuts. That can. could drive down the average rate that the market focuses on but for the outlook for the

committee for rates now we could have dissents dom in favor of a cut bigger than 25 and even a dissent for no cut at all don all all right steve leesman thank you very much for that now let's bring in former federal reserve board governor columbia university economics professor frederick mishkin he is also a cnbc contributor uh professor michigan you heard steve's kind of state of play for the fed what exactly in your mind is the most important factor that the Fed is debating or deliberating about right now as it looks towards what is a presumptive 25 basis point rate cut? So what's happening now is something that is always very comfortable for central bank, which is where you have a stackflation-type phenomena, where inflation is high, rising

because of supply shock, in this case the tariffs. But on the other hand, that supply shock also can actually weaken the economy. And so we're seeing exactly this scenario start to play out with inflation above the well above the Fed's target, particularly on the core level, which is more important for telling you what may happen in the future, that we're in a situation where the employment numbers are starting to look much weaker than they were before. And so this is a case where there's always a quandary, because if you're in a situation where there's a negative demand shock, and in that case, you're going to have both inflation

and the economy weaken, then it's easy. You just lower rates. It's much tougher in this kind of environment. Normally, what a central bank should do is to recognize if the supply shock is temporary, in the sense of temporary to inflation, that's just a one-time shock, and that's what a tariff will do, then, in fact, they should look through the fact that inflation will be temporarily higher, but eventually come back down. again, and it makes a case much more stronger for them to actually ease.

The problem here is that the Fed's very worried about inflation expectations, and this is particularly very, very key in terms of the kind of the attacks that we've seen on the Fed, the Lisa Cook situation, the fact that they've appointed somebody which is unprecedented that actually still is keeping a job in the White House, which is really quite extraordinary, indicating that they'll be beholden to Donald Trump, who's asking for very, very dramatic. cuts. So in this kind of situation, the Fed is very concerned that inflation expectations may not stay stable in this kind of environment. And that may be a key reason why they may be much more reluctant to cut rates faster than they otherwise would. And I think that's the problem they're

facing. Yes, there's a situation where it looks like the economy's weakening the inflation rate if, in fact, inflation expectations don't rise. That's a situation where it will be temporary rise in inflation. Then, in fact, they would cut and cut more deeply. But this is a tough situation for them. All right, professor, you mentioned inflation expectations. One of the big fears out there is that somehow inflation expectations do hypothetically rise and then kind of get anchored at higher levels and then incrementally kind of move up and drift higher over time. What causes that kind of phenomenon and how can you avoid it with Fed policy and rhetoric? So the Fed could do what it tried to actually show that it's going to be serious.

But the problem is if you take away central bank independence, which is clearly one of the things that Trump has been advocating, then in fact people will expect that monetary policy have become much easier in the future. And this is a real possibility, not just with the appointment of Steve Mirren, but also the potential new Fed share that will occur in May. And in that situation, what happens is that you actually have inflation expectations rise, inflation rises. And actually, by the way, ironically, that means higher interest rates. So we've seen this happen before that we've seen this happen in Turkey,

where the central bank independence was compromised and look what's happened to them, very high interest rates. We see it, by the way, in place like Argentina, where in fact there was a classic, the attack that we see at Lisa Cook, it's very similar to what was done in Argentina, where they attacked Pedro Poe at a point before they had their financial crisis to get rid of him. They did get rid of him. And in fact, also fired all the people at their statistics department, so nobody trusted the statistics. And all of these are sort of the pattern we're in now, and it's a very scary one. And that actually is a situation where inflation and expectation are much harder to

contain. The Fed's really aware of that, and that's one of the reasons why they may be reluctant to ease as fast as they normally would. Professor, that leads me to this final question here for you. In your mind, former Fed governor, is the Fed independent? And will it be independent in the coming months, quarters, and years? So certainly in the past, it's been very independent. I never, ever felt And my whole time, as a governor where I sat on the, was a participant in the FMC and actually voted, to the time that actually I was the executive vice president, the Federal Reserve Bank of New York, where I got to sit in the in the FMC meetings, I never once ever felt that the Fed was making a decision based on politics. And that's exactly what you want from a point of view at an independent central bank. The environment now is pretty wild. It's very different. We just don't know what the Fed is. going to be like starting in May of this upcoming year, that if Trump gets his way and actually

lowers the federal funds rate by 300 basis points, and the economy's not that weak and inflation is high, well, then we're going down the scenario that we saw in Turkey, and that's actually a very, very scary one. So the problem here is the Fed is sort of trapped. Independence is not absolute that the president can affect independence by who he appoints and the relationship that he has with the appointees, that the Congress can also cut back on central bank independence. But this is a case of where it's really unprecedented the attacks that we've seen on Fed independence. And so we just don't know how successful they'll be, what the outcome will be. We actually don't even know who the players will be at the Fed when we go down the road.

and that's going to be a big deal. All right, a lot of moving parts there for sure. Frederick Mishkin, former Fed Governor, Professor, thank you very much. We'll see you soon, sir. You're very welcome. All right, and speaking of the Fed, don't miss an exclusive interview with Double Line Capitals, Jeffrey Gunlock. That's this coming Wednesday, right after Chair Powell wraps his news conference right here on closing bell.

Still ahead on the show, Funstratt's Tom Lee tells us how he's navigating the tech space, and then later on a check on the social space. We'll tell you what's driving the action in that sector coming up. Closing Bell will be back after this. Coming up next on the show, keep it right here because Funstratt's Tom Lee breaks down his post-Fed playbook where he's seeing the opportunity following this week's critical Fed rate decision. Closing Bell will be right back after this. Keep it right here.

Welcome back to the S&P and NASDAK hitting record highs and heading for record closes today. This is all ahead of the all-important Fed rate decision on Wednesday. So here to share how he's positioning is Fundstract Global. advisors, head of research, Tom Lee. He is, of course, also a CNBC contributor. First off, Tom, I want to mark a milestone because it is now a big anniversary day for Fund Stratt. It is indeed. It's our 11th year since we started Fundstrat, which was September 15th, 2014. Blink of an eye. It's a blink of an eye, yes, because this is still mid-cycle for the bull market as well. All right, so since you said mid-cycle for the bull market, let's get right into the record

highs that we are seeing. If it's mid-cycle, that kind of implies maybe third, fourth inning, maybe fifth at the latest. Is that how you see things for this rally? Yeah, I mean, I think some parts are later cycle, like part of these, the Mag7 trade, but I do think AI still has many years to just propel earning surprise and innovation and economic growth. So I don't think it's late, like it's too late, it's not too late to buy the Mag 7. But I think the next leg of this is really the Fed cutting, helps the ISM get back above 50, brings down mortgage rates so it's a cyclical broadening trade. And then I think, you know, financials I think are still important because I think that they're going to re-rate more like technology stocks. Goldman and J. Morgan are basically

technology companies now. And as they embrace the blockchain, they're going to become more streamlined and less employee dependent, much more AI-driven. So I think there's a lot to look forward to. Now, if that is the case, you mentioned that it's because of a possible rate move lower and a trajectory of lower interest rates. Just how critical will it be to this market to have those lower interest rates? And do you think that there is a post-Fed playbook for what those companies are going to be? Yes, I think it's really important for CEOs to be confident the Fed is cutting because we know the labor market has slowed.

maybe even wobbling. And that's because businesses are cautious. And the ISM reflects it. It's been 31 months below 50. The Fed can actually reinject confidence by saying we're back into an easing cycle. That helps businesses get confident and expand again. So there's a lot of legs to this if the Fed cuts.

And I think it's real, it'll be a real improvement in liquidity. You alluded to some of the places that could see the biggest impact. Yes. But can you take us through those, if you had to put a top three to about where you think the most activity or juice could come from if the Fed were to embark on this path. I think of maybe home builders. I think of other parts of the market, maybe technology

based on valuations. But in your mind, what are the places that are going to reap the most benefit from that? Yeah. So I'm looking at September 98 and September 2024 as the playbook, because those are both years where the Fed was on extended pause, and they cut in September. The number one trade is NASDAQ 100. So I think that's why the MAG-7 and the AI trade gets a lot of lift off. The second is monetary liquidity sensitivity, global central banks easing. That's Bitcoin and Ethereum and seasonally strong. I think they could make a monster move in the next three months, like huge.

And the third, of course, is interest rate sensitives. That's really small caps and financials. but really the first two might be the standout trades. All right, because you mentioned the crypto side of things, you're actively involved now. It's not just a thing that you're doing on the side. You are very much engaged in the business of crypto. You govern. You oversee crypto assets now.

If we were to say Ethereum, Bitcoin, we try to bucket them into risk-averse assets or risk-on-type assets. Is it fair to look at them that way? way, we used to compare them correlation-wise to the NASDAQ 100. Is that the fair assessment for how these things trade in the coming months? Yes. Bitcoin is particularly monetary policy liquidity sensitive. Ethereum has elements of being sensitive to liquidity, but it's also part of this AI moving onto the blockchain and Wall Street moving on to the blockchain and that whole stable

coin chat, GBT moment for crypto. So Ethereum, I think, trades almost like 1971 Wall Street, which was the dollar went off the gold standard, a lot of innovation. Ethereum essentially is a growth protocol, and that's why Bitmine is so aggressively acquiring Ethereum. What industries are going to see the most immediate impacts of the benefits of being on a blockchain, like Ethereum, for example? Oh, well, there's enormous benefits.

Well, number one, stable coins have proved. that moving money is really good for consumers. You know, stable coins are a way for unbanked people to actually have banking access. And merchants like it because they don't suffer from chargebacks. But, and we've seen it at BitMind because we are moving money onto the blockchain, right? We receive fiat money, we put it on the blockchain and buy Ethereum. It moves with a lot less friction. So Wall Street is building on the blockchain because they can rebuild a lot of their infrastructure on a public

chain really improves trust and there's a lot of resilience and censorship resistance. Bank's biggest cost is labor. That's something they can save by moving on to the blockchain. We've talked in the past about tokenization of markets, specifically the stock market. Is that something that is perhaps better indicated for certain types of blockchains versus others? Yeah, there is already a lot of effort to tokenize. Robin Hood is leading that effort for retail investors.

tokenizing stocks, which allows you to trade at 24-7, which is a benefit, and with a lot of transparency. They're building these on Ethereum or a layer two of Ethereum. So Ethereum, which is the second largest blockchain after Bitcoin, is where Wall Street is choosing to build these tokenized securities. All right. Tom Lee, with all things Fed, rates, stocks, AI, and of course, crypto as well. Thank you very much. We'll see soon. And I just want to thank CNBC. They've been a great partner and helped a lot of investors.

Congratulations on your 11th year anniversary at Fundstra. Tom Lee. All right. Up next on the show, we are tracking some of the biggest movers as we head into the closing bell. Christina Parts in Evelis back with those trades. Christina. Let's start with an AI cloud stock surging on a massive revenue guaranteed deal, while an airline warns on earnings amid summer travel chaos,

plus a major agri-chemicals company considers a business split that has some analysts worried. We'll break down all those market moves when we return. All right. All right, just under 10 minutes until the closing bell rings here. Let's get back out to Christina Parts of Nevelas for a look at the key. stocks to watch into that close, Christina. I really wanted to talk about Corrieve because those shares are up over 6% after landing a massive $6.3 billion deal with Invidia.

The agreement guarantees Nvidia will buy any cloud capacity Corweave can't sell to customers through 2032, giving pretty much the AI cloud provider a major safety net. That's why shares are up 7%. Alaska Air, though, moving in the other direction, down about 5% after the airline warned his third quarter earnings will hit the lower end of forecast. The company blamed rising fuel costs. Some are disruptions from weather and air traffic and control issues. Those problems drove up costs from overtime pay and passenger compensations.

Shares are down 7.5%. Last but not least, Cortiva shares dropping after roughly 6% after reports that the agri-chemicals company is considering splitting its seed and crop protection business into two analysts worry the separation could really disrupt operations and weaken both units. And that's why shares are down 6%. Now I'm done. All right. Christina Pertzenevless with the latest update there on the stocks on the move.

Thank you very much for that. Up next on the show, banks are hitting fresh record highs, fresh highs today anyway. What's behind that balance is coming up? That and much more when we take you inside the market zone. Keep it right here. That's back after this break. All right, those graphics, those sounds. You know where we are?

We are in the closing bell market zone. The NBC senior markets commentator Mike Santoli is here to break down these crucial moments of the trading day. Plus, we've got Julia Borsden here with a look at how the TikTok deal might impact the social media landscape. And Leslie Picker is standing by with a check on those big banks as those names hit some fresh highs now. Let's start, though, with Mike Santoli. This market is one that is still gradually. It hasn't been blow off tops, but it just keeps melting higher and higher. what can stop the upward trend?

Yeah, Dom, I don't know if there's one trigger point that would stop the upward trend. I think you could kind of take some heart in the strength and the durability of the trend already. I agree with you. It's not as an index, S&P 500, Dow, not accelerating higher, but you are seeing some of these breakouts in the mega caps really accelerate.

So you look at the alphabets, obviously Tesla kind of regaining multi-month highs, and you do see a bit of a pile on effect. Now, in terms of what could stop, I mean, we have a great deal of certainty, perceived certainty around the macro outlook, the policy outlook, and the AI outlook. Any one of those things, maybe you get a little bit of a wobble, a little bit of a complicated story if we get some Fed projection or something like that. In general, I think you look at the two-year note yield breaking down, say Fed rate cuts are coming, the consumer and financial stocks leading or outperforming and say, I guess it's in a decent economy. and it's hard to outthink that except to say markets up a lot and stocks are expensive. And rates are part of that story, of course, with this week here heading out.

Mike, stay with us here. Let's send it over to Julia Borsden for more on what's happening with social media vis-a-vis TikTok. Well, Dom, there is news that there has been progress in negotiations about the future of TikTok, but there's still a lot of unknowns about this deal that President Trump has talked about, including which company and or individuals will be part. part of the U.S. ownership of TikTok and what kind of restrictions could be placed on the new company. Rivals MetaSnap, Pinterest, Reddit, and YouTube parent alphabet all saw their stocks trade higher today on this news, as it was seen as increasingly unlikely that TikTok would be

shuttered. An e-marketer tells us, quote, if the deal brings about significant changes, it's likely that some marketers will pull ad spend, at least in the short term, reallocating budgets to platforms like Instagram, YouTube, and Facebook. The real question now is how potential changes to TikTok impact its user engagement and its ads. E-marketer tells us that TikTok's user growth is slowing and projected to continue to slow, while Instagram actually sees bigger Gen Z gains than TikTok. Dom? All right. Thank you very much for the TikTok story there, Julia. Now, Leslie Picker is a look at all of those bank stocks hitting you highs. Leslie.

Hey, Domya, JP Morgan, Morgan, Stanley, Goldman Sachs, Wells Fargo, each trade. at or very close to all-time highs, that's actually quite a rarity with the Fed expected to cut rates this week. According to Strategist research, there has only been three examples in modern central banking history where the FOMC has cut rates with banks at all-time highs. The firm says that was the case in July of 1992, July of 1995, and January of 1996. Now, there's an intuitive reason why. By the time the Fed typically cuts rates, it's out of necessity because there's a problem with the economy and therefore a problem with credit on the bank balance sheets. So usually at this point in the cycle, bank stocks are weak, which just speaks to the unique nature of the

current dynamic, which is counterintuitive, Dom. All right, banks, of course, a huge focus anytime the Fed rate picture is involved as well. Leslie Picker, thank you very much for that. Mike, I'm going to go back to you for this one here. It's a big Fed rate week. What exactly would you expect to see on the heels of this rate announcement if we do, in fact, cut by 25 basis points? Yeah, it feels very well-baked, very small chance in the market for a 50 basis point. So I think you might just get the market kind of free to get on with whatever business it's been kind of holding in reserve, waiting for the Fed meeting to pass, which could be, you know, finally a little bit of softening up at the index level. We have seen a little bit of stalling out below the surface.

even today, the equal weight S&P is kind of flat, even the equal weight NASDAQ 100. So I do think you're going to have some kind of clarity on the rest of the year once we come out of it. I just don't know if people have been holding back waiting to do a little bit of selling after this good run. So maybe that comes out on Wednesday and thereafter. All right, Mike Santoli. Thank you very much for all that. That does it for the closing day. It's been a pleasure being with you.

Let's send it over to overtime with John Ford. Thank you.