Closing Bell - Closing Bell Overtime: 10/10/25

Episode Date: October 10, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And that bell marks the end of regulation credit court. We're in the closing bell at the New York Stock Exchange, Webtoon, doing the honors at the NASDAQ as New York Comic-Con gets going this week. A different kind of October surprise. A big sell-off in stocks today after President Trump said he was considering a massive increase in tariffs on Chinese products. All three major averages closing just about at the lows for the day. First move more than 1% in the S&P 533 sessions. First 3% loss for the NASDAQ since April. And the Dow's lower for the fifth straight day.

It's worst day since the middle of May. Stocks with China exposure, the biggest drags on the index, Amazon, Nike, Apple, and Nvidia, tech, the worst performing sector, chips a big culprit. Big losses for synopsis, super micro, teradine, those are among the worst performers. Retail also getting hurt. There was already some worries about the consumer. Now throw tariffs on top of it, and big losses for names like Best Buy, Five Below, and Estee Lauder.

We got much more on retail coming up in overtime. and the areas people are looking to for safety. The metals work, gold still above 4,000, crypto, not as much. Bitcoin down 4%, ether down 8% today. Well, that's the scorecard on Wall Street. Welcome to closing bell over time. I'm Morgan Brennan, along with John Fort. Throughout the next hour, we are going to be breaking down today's selloff from every angle.

We're going to be looking ahead to what all of this means for the life of this rally. But let's start with the news of the day. The president threatening massive tariffs on China. Javvers is at the White House with the details. Amen. Hey there, Morgan. Well, look, I mean, even though we just opened the show with our big red bear 3D graphic, I mean, I want to give you sort of the bullish analysis of this as we're now five hours since the president tweeted. He posted this social media post about 11 a.m., just before 11 a.m. this morning. So we're five hours into this. And we haven't seen any

indication from anybody in the U.S. government that anything in specific has actually taken place, right? No confirmation of additional tariffs, no confirmation of additional countermeasures that are being considered, and no confirmation that the president has, in fact, actually canceled his meeting with Xi Jinping. So that's, I think, the bullish outlook in the sense that you get the sense that the president and official Washington are sort of waiting for the Chinese reaction to this when they wake up in Beijing. So table that. Here's what the president said earlier today. Take a look at an excerpt of this very lengthy social media post. He said one of the policies that we are calculating at this moment is a massive increase of tariffs on the Chinese products coming into the United States of America.

There are many other countermeasures that are likewise under serious consideration. So what are the operative words there? Serious consideration. He doesn't say he's going to do it. He says policies that we are calculating at the moment, massive increase of tariffs, doesn't say he's going to do it. So five hours later, he hasn't done it. So I think if you're looking at this, what you're looking at is a president trying to rattle the cage of the Chinese government and get them to respond on what they did yesterday, which was

rattling the cage of the U.S. president. So there's some rhetoric here. You know, a lot of the old-timers in Washington used to call this gorilla dust. You know, and the big gorilla stomps his feet and stirs up a lot of dust. I think we're looking at a lot of gorilla dust in both capitals today, and we're going to have to wait a little bit for that dust to settle to get a sense of what real has actually happened here and what that's really going to mean for the markets. Markets obviously, you know, reacting to the sharp change in sentiment, but in terms of concrete action, we haven't seen that today.

Yeah, we've also had a record run here, so perhaps not surprising to see markets digest this in a more meaningful way today. Amon Jabbers, thank you. Well, joining us now is Marco Papak of BCA research. Marco, it's great to have you on, and that's where I'm going to start with you. You see this? And should investors see this as guerrilla dust? I love that analogy. I thought it was very apt.

And yes, absolutely they should. I mean, this isn't the first time that President Trump has used guerrilla dust to use your colleague's great phrase. In fact, I believe that he has always deployed what I call the seven steps of maximum pressure. And step five in those seven steps is always, always leaving the bride at the altar. So just when you think that there's a deal, President Trump has almost always in every negotiation, under all circumstances, always pulled out right before the deal is concluded, and that's so as to get a better deal. And I think that that's why he did not actually cancel his visit to South Korea.

He said, I may not go, and then, of course, has threatened tariffs. I mean, this is just in the last call at 24 to 48 hours reported developments here from the China side, these proposed rare earth export controls, which wouldn't go into effect until I believe December 1st. You have Beijing saying that it's going to levy fees on U.S. cargo ships docking at its ports, customs crackdowns on NVIDIA U.S. chip imports, reports of an antitrust investigation into Qualcomm. That's on the China side. On the U.S. side, I don't think we should be overlooking the fact that the Senate,

and I realize that there's a couple weeks until this comes together, but that the Senate actually rammed through its National Defense Authorization Act last night, which is the Defense Policy Bill, annual defense policy bill, very, very hawkish on China. It included the fight China amendment, gain AI, biosecure, all focused on cracking down on ties with China. So I do wonder if just looking at all of this landscape, investors were way too enthusiastic to begin with about a big grand trade deal with China when there's so much at stake from a national security standpoint. Yes, I think that what was announced by Beijing yesterday definitely motivated this. And he gave President Trump his excuse to ramp up. tensions ahead of this meeting. The Chinese added more rare earths to their expert controls,

and they also actually included machines and intellectual property to allow other countries and other companies to refine those minerals as well to their export control, which was sort of an expansion of their policies. So yes, of course, there's always something to find in China-U-S geopolitical confrontation. The two are rivals. they're going to continue being rivals. I don't think investors were too complacent about that. I don't think anybody expected a truly groundbreaking grand bargain. However, I think investors were just complacent about everything. I mean, this was an buy-everything rally that's been going on for several months. Okay. And so I think that that's the context in which we should put this

market reaction. So, Marco, where you're heading with that, bringing it closer to investor portfolios, You say big picture here, dollar debasement, kind of cheaper dollar is a big part of the story here. And commodity trades, you're saying, especially precious metals, palladium, platinum, silver, nickel are the way to kind of combat that. But don't tariffs and the resulting global trade shocks cause imbalances in commodities sometimes, too, or are metal shielded? No, metals could be impacted, not globally, of course. President Trump has suggested he would put tariffs on various metals. But I would just step back and think of this in a different way. To me, the market reaction today is actually quite encouraging because, yes, stocks are falling

because, again, they've gone up a lot. And I think investors were looking for any reason to be shaken out of the tree branches. But bond yields are coming down significantly, and a dollar has reversed. its vicious rally of the last two days. And so that is encouraging, because without lower bond yields, you're not going to have any kind of a transition in the U.S. economy towards a more leverage-driven cycle. And that encourages me that we can continue to avoid a recession.

And then, yes, some of those, you know, metals and precious metals and industrial metals trades can go on unabated. All right. Marco Pappage, thank you. Well, bond yields falling today, along with stocks, the 10-year falling back toward 4%. Let's get to Rick Santelli in Chicago. For more on that.

Yes, John, I'll tell you, last guest said, you know, bond yields have fallen a lot. And I guess in a cumulative way, maybe, but if you really look at how much stocks moved in percentage terms and looked at all the intensity that this session had, you certainly did not see it in treasuries. Let's look at two's tens and thirties, six-hour chart. You could clearly see absolutely around 11 Eastern when the stock market and everything was hit on those tariff headlines, all of the maturities moved lower in yield. However, let's put some asterisk here. If you look at a two-year, its current low yield close of the year was early September at 3.48.

We're currently hovering at, what, 352. Where do we settle last week in a two-year? 358. Not a huge weekly move. And if you open that chart up, that bottom that we made in September, that goes all the way back to CEP of 2022, and it was unchallenged. But maybe the biggest unchallenged level is 4%. They've been gunning investors trying to hit that 4%. Now, you see that's the low yield closed from very early April.

I've talked about it a lot. But we didn't really get there. Today, the low yield was hovering right around 404, and right now we're hovering around 406, which means that we're only down six basis points on the week. We settle at 412. And if you open that chart up, you can see that that April low that we had, Well, that takes you all the way back to October 24 when was the last time we really started settling earnestly under 4%.

So next week, pay very close attention to two things. Obviously, the close at 4% in a 10, but also in a 30-year bond, earlier this week and last week, we tested levels that were the settlement of the year in 2024 right around 4 and 3 quarters. We didn't get above it. That is maybe one of the bullish indicators that you could see potentially lower level. long-term rates. John Fort, back to you. Rick Santelli, thank you. Well, as we mentioned, all three major averages ending near session lows, the Dow posting its worst decline since May, the S&P and NASDAQ since April. The indices is closing out with their biggest weekly decline

since early August. Our next guest says if the sell-off drags on, it could spark even bigger risks. Wealth Enhancement Group Deputy Chief Investment Officer, Doug Hoover, welcome. Doug, A lot of this market run has been driven by the AI story, semiconductors, tech infrastructure, a big piece. Somebody's got shaken by today's headlines. How vulnerable would you say this market is its main driver, especially in this AI trade, as this unfolds? Yeah, absolutely. Thanks for having me. I mean, listen, it seems like a pretty bifurcated market here, right?

Either AI execution lives up to it, promise, and that certainly will benefit multiple sectors. But if disillusionment sets in, I think this could really drag valuations more broadly. And so there's going to be a lot of attention paid to major questions around what is the long-term ROI of these data center spending, you know, how can they even afford it, you know, given the numbers that are being thrown around. And if there is kind of a growth slow here, what is that growth premium? What is the multiple compression that is kind of the right reset if we do hit the skids? Any place to hide? Metals? I mean, that certainly seems new place that a lot of investors are looking right now.

You saw it today. I mean, I think there's multiple legs to why gold has certainly been working. I think it started with more central bank buying, but it's probably part of this debasement trade where investors are disillusioned with the U.S. Treasury and the U.S. dollar. And so gold seems to be a safe haven at the moment. I also think if we expect rates to continue to decline, that opportunity cost of a no-yield asset like gold certainly goes down. And so gold certainly seems to be a place. Digital gold in the form of Bitcoin sometimes is, sometimes isn't. Obviously today traded more like a risk asset.

But you did see treasuries react today in a muted way. And so maybe investors still look to do the intermediate and longer end of the curve to hide out. But at the moment, I think as we look to our clients, we really think more long term. And it's just about making sure our risks are in the spots. We want them. How's the government shut down impacting the bond market right now? And here's why I ask that. Because on the one hand, you have the uncertainty. We're dragging into another week. You're seeing layoffs start to happen, although there's already legal challenges to some of those layoffs. On the other hand, if this is an opportunity for the OMB to go in and start cutting government spending in a bigger, more aggressive way and actually

has a case to be made around that, I would think that that would actually help the longer end of the curve and keep those yields under wraps, too? Yeah, I mean, you could certainly make that argument. I think in general, right, the lost wages for furloughed or laid off workers, government contractors, et cetera, certainly means more fears around weaker consumer demand, especially in those local economies that are heavily dependent upon federal work. But I think in general, right, that fear of the fact that a lot of this cycle has really been on the back of the workhorse of the consumer.

And so if we see continued weakening there, we obviously have softer labor markets, this isn't going to help that. You know, there is that view that maybe you do want to hide out. And I think there has been some pressure on the back end, obviously, as the term premiums, a little bit higher, again, to that idea that we are carrying a lot of debt. I think the natural buyers of the long end are a little concerned. But the fact of the matter is it has been the safe haven asset for a long, long time. And so I do think you're right, and that we could see that maybe bring in.

in the back end as fears kind of continue to percolate underneath. Okay. Doug Huber, thank you for joining us on what was the biggest one-day decline for the Dow since May and the biggest one-day decline for the S&P and the NASDAQ since April. Volatility finally perking back up in what is historically a very volatile month, October. Coming up on overtime, we're continuing to look at all the stocks and sectors that got hit in today's tariff threat takedown of the markets. Retail, big loser today.

That's despite efforts to diversify. a lot of companies still heavily reliant on China. We're going to dig into those names. And take a look at shares of Tesla, also getting hit on China tariff news, down just about 5%. Now the stock still is up 20% in the past month. Much more on the selloff when overtime comes right back. Welcome back to overtime. Retail, one of the sector's worst slam today on tough talk from President Trump on China tariffs,

the XRT ETF posting its worst day since May, worst week of the year. some of the hardest hit names, five below, Estee Lauder, Best Buy, and Capri. Let's bring in Oppenheimer Senior Analyst, Brian Nagel. And Brian, you had been saying tariff-driven price hikes were moderating. How much of a concern is this latest dust up? Well, good afternoon. No, that's interesting. So you're referring to just this morning, my associates and I published an update to an index

we created that basically tracks retail price adjustments across our coverage universe. And interestingly, you know, what we saw in the last few weeks or month or so is that what seems these price, these tariff-driven price increases have actually stalled out. You know, I do find that interesting. So to answer your question, John, I mean, you know, if the data moves a lot, right? But if retail, if our index is right, and for whatever reason, retailers have become more hesitant to raise prices, at the same time now we have fresh threats of now, to use the president's word, massive new tariffs, that's bad. Because what that basically means is these retailers are really going to have to struggle to pass along any of these new costs to come through. And we're in Q4, right? I mean, I'm not sure what you're seeing out there in inventories ahead of the thick of the holiday season coming up.

I know that there was some degree of pull in ahead of the threat of tariffs earlier this year. But if retailers have to discount, then that's a problem on the margin side. But if retailers have to re-up, then that's a problem potentially on the tariff side. No? No, that's exactly right. I mean, what we're heading into is the all important holiday selling season, right? So for most retailers, volumes are bigger. You do most of your business in the holiday season. So that basically raises the risks, right, you know, as we head in the holidays, and that's exactly what you're talking about. Now, right now I'm not seeing any signs of excess promotions. I think the bigger concern is we head in the holidays, going back to the

point I was making before, is what retailers do with prices and then the potential impacts that has upon demand. You know, for a while, I've looked at the consumer spending backdrop. The discretionary spending backdrop is okay, but not great. There's a lot of pressures out there on the consumer. To the extent these retailers are basically forced to start, you know, continue or raise prices, even an accelerated pace, that's very likely could further pressure, if you will, discretionary spending. Yeah, CNBC's Lorraine and Lorafu's done some great work on this, on the state of freight, basically broke down how the freight data is signaling that the inventory is very lean and mean going into the all-important holiday season. So in light of this

whole conversation then, as an investor, given the pullback we've seen in these stocks today, what would you be investing in? Well, look, and I've said this for a while, too, within my coverage universe, you know, the best way to play this tariff backdrop or increased uncertainty with consumer spending is auto parts retail. And my favorite game there is AutoZone. You know, for really those, the auto parts retailers have a great ability to the extent they choose to pass along higher cost to consumers. And on the other side of the argument, to the extent we do have a weaker spending backdrop of more cost of consumer, that actually lends well to auto parts retail, too, because the basic math is, you know, if you're as a consumer, you're worried,

you don't want to buy that newer car, you're more likely to fix your existing car. So again, that's a big benefit for the auto parts retail. So that's really the safest place to play. I mean, the other side of the coin, look, I mean, I think the stocks reflected this properly today. I mean, I like Nike a lot here. I think the turnaround is happening. Nike's been very good about calling out, you know, what they view is the terror of exposure. Again, we'll see what happens. I mean, this, you know, the commentary today could change in hours, could change over the weekend.

We'll see. But if there's incremental tariffs on China or massive tariffs, as we heard today, that would be another challenge for Nike and its turnaround. Okay. So bottom line, do you think this could be a noisy earning season then for the retailers? I think it will be. I mean, it's, you know, again, what we've heard from most of these companies for a while now is that, you know, they've been pretty pleased with their ability to, so to say, implement and execute tariff mitigation plans. But, you know, the longer this goes on, the more difficult those plans become to continue to successfully implement and mitigate. And, again, if we have new tariffs, that, you know, that makes more, that, that's a bigger concern. I think, look, most of when I'm talking to my companies across the board, you know, I think with their most, so to say, tired of is just the erraticness of this. You know, they just, there's no, they can't get any certainty with regard to what the

tariffs will be, where the tariffs will be. It just seems like it's changing all the time. And it's very difficult to manage businesses like that. Okay. Brian Nagel, thanks for joining us. Thank you. Flip side of the coin here is consumer staples was the one sector, John, in the S&P that was in the green, led higher by a lot of packaged food companies, including PepsiCo, I think,

is it still rides the wave of earnings. Still got to eat. Yeah. Well, market selling. off on China tariff news today, but the government shutdown is still hanging out there as well. Now the layoffs are starting. The latest from Washington. That's coming up on Overtime. Welcome back to Overtime. Let's continue to survey the damage from today's sell-off. Big drop in the price of oil falling below 60 bucks a barrel, at least dipping below for the first time since May.

Where is that a dispute between the U.S. and China could slow global growth? Every name in the S&P 500 energy sector, down today. APA, Halliburton, Baker Hughes, among the worst performers. Well, as the government shutdown drags on, OMB director of Russell vote, saying the RIFs have begun. That's short for reductions in workforce or reductions in force, what we call layoffs of federal workers. So let's go to Emily Wilkins in Washington for the latest. Emily. Hey, Margie, Emily. I know the Trump administration, you remember they announced that they're beginning to layoff federal employees following through on that warning that they made at the start of the shutdown. Now, we don't yet have details on how many employees are impacted or from which

roles, but we do know some of the agencies. You got Treasury, Health and Human Services, EPA, Department of Commerce, Department of Education, Energy, Homeland Security, Interior, Housing, and Urban Development. All of them have confirmed that their departments are part of the layoffs of federal workers. And you've seen some swift backlash to this already. The Federal Workers Union tweeted that the lawsuit has been filed and then called the firings illegal in a statement. The AFL CIA also tweeted that America's unions will see you in court in direct response to OMB and rest vote. Now, of course, these firings are only a few of the ways that the White House is trying to pressure Senate Democrats into voting to end the current shutdown. If you remember,

Trump has also floated not giving furloughed workers back pay when the shutdown ends, which is currently required by law. And yesterday, he said he would go after. what he deemed as Democratic programs. And, of course, waiting for more clarification on what these can be. But you do see now, as the shutdown is in day 10th, the White House trying to really ratchet up the pressure here and the impacts, as we are now set to go into next week.

Senate's not going to be back until Tuesday, and that's when we expect the next vote to open the government to be. Guys? You know, we had Mick Mulvaney, the former director of OMB, among other things, on this very show, exactly a week ago. And one of the things he pointed out was that OMB director vote

was his deputy for three years, he said the man probably knows more about the way government functions than anybody in Washington and that they've been waiting for this period, aka a shutdown, for this opportunity to do stuff like this for a long time, because it's a different legal dynamic than when the government's fully funded and fully open. I mean, Morgan, that's definitely a case that Russ vote and the White House are making. You're also seeing the unions as well as Democrats saying that actually it's just the opposite, that a shutdown does not give the White House any additional abilities to lay off or to fire federal workers. And in fact, that during a shutdown, only the essential functions are supposed to be formed,

which means that things like a reduction force aren't supposed to happen. And you actually have seen some pushback from a few Republican senators who are saying that this is not the right time to be laying folks off, that the government needs to focus just on the essential functions. And of course, this is all coming as lawmakers are trying to piece together the funding for the, the next fiscal year, including the size and the scope and the roles of some of these departments. So a lot of things going on here will probably see this decided in the courts. Emily Wilkins, thank you. Well, it's time for a CNBC news update with McKenzie Segalos.

McKenzie. Hey, John, 19 people are dead or missing today after a massive explosion at an munitions plant in Tennessee. That's according to the local sheriff. The cause of the blasted, accurate, energetic systems was not immediately known, and local authorities said the investigation could take days. The company said the facility develops manufacturers and stores explosives for defense and commercial markets. Defense Secretary Pete Hegeseth and Qatar's defense minister signed a deal today green lighting a new Katari Air Force facility in Idaho. Katari pilots at the facility will train to fly F-15 fighter jets alongside

U.S. soldiers. The facility will be built at the Mountain Home Air Force Base. And Banana Ball is about to get bigger. The founder of the Savannah Bananas announced Two new teams will join the entertainment-based, fast-moving baseball league. He says there are scheduled appearances in 75 stadiums next year, including 14 major league parts and 10 football stadiums. The league drew 2.2 million fans this year in hopes to grow to 3.3 million in 2026. Back to you guys. That's bananas. All right, McKenzie Sagalos, thank you.

President Trump's tariff comments, not the only thing weighing on stocks. Many big home builders losing 10% of their value this week after the president pressured them to build more. We've got that story coming. Another group having a bad week, auto stocks, for its worst week since August of last year. GM and Stalantis also sharply lower. Much more on the sell-off coming up. Welcome back to overtime. Big sell-off for stocks after President Trump threatened massive tariffs against China. The losses for the S&P and NASDAQ were the worst since April when tariff turmoil gripped the markets. Today's loss is sending all three major averages down more than 2% for the week. Before today, we had a steady climb to record.

for the markets. This was the S&P 500's first move more than 1% in 33 sessions. That's the longest gap between big moves since 2020. Retail, semiconductors, and energy, some of the hard-hit groups, XRT and SMH, having their worst days since April. As for energy, as I mentioned earlier, oil falling below 60 for the first time since May. Well, let's turn to the home builders, because the sector had a rough week. After President Trump pressured home builders to ramp up construction, the home construction an ATF down more than 8% this week. It was the worst week since 2022. D.R. Horton closing out its worst week since June of 2022 is one of the biggest losers in the S&P 500 as well.

And as the stocks fall, the PE ratios coming down with them. KB. Home trading at 10, D.R. Horton, around 12. So are these names now cheap enough to buy? Let's bring in John Lovallo, Home Builders Analyst at UBS. John, it's great to have you on. I mean, we had seen just a massive run in the home builders coming into that first Fed rate cut and then even coming out the other end of this. How much of this is profit taking? How much of this is policy changes and the idea that maybe the home builders are out over their skis? Yeah, thanks a lot for having me, Morgan. The tweets that came out this week were tough on the group for sure. I mean, basically suggesting that the group was hoarding lots, not producing enough. Frankly, when it comes down to

if the builders have done nothing but the very rational thing in pulling back on production. There's been inventory that's built up in certain markets. They're trying to clear the decks for next year. If they were to push more, honestly, I think that the outcome would be they'd be pushing on a string. The consumer confidence is not there. I think you risk damaging consumer confidence even further as existing home values come down. So to answer your question, look, it was policy, but also the stock set had a nice run. I think that this has probably been the most hated rally that I've seen.

in a long time in the shorts. We're kind of looking for an opportunity to step in and get more negative, and that's what we saw this week. So we just talked about the fact that the valuations of the stocks have come down, too. Would you be buying anything here right now? 100%. We're decidedly bullish heading into the new year. In fact, we have an internal team here called Holt,

which is a cash flow-based valuation metrics team. They've said that the group is, now as dislocated from the market as at any point in the past 10 years. And when they've hit this point over, you know, over time, the relative returns versus the market have been in excess of 50%, 5.0%. The group is very cheap. And these are changed businesses that generate cash through a cycle, are doing the right thing with capital and returning capital to shareholders, buying land off balance sheet, very under levered balance sheets, just very good businesses. So John, subprime lending looks bad in cars right now. So it seems risky to incentivize too much anywhere. How many new homes

can the builder sell? It comes down to consumer confidence. It really does. I mean, we're running at decent levels. Could they push single family starts, you know, from call it 937 this year, up to 1.1 or 1.2 million units in a good market? Yes, that's possible. But again, you don't want to flood the market with inventory when it's not receptive. The consumer confidence needs to improve affordability is a challenge, but you know what? The builders have been able to buy down rates, and that's actually changed the affordability equation amazingly. So look, if the government really wants to do some things to help, I think the Housing Act that just got passed by the Senate called the Road Housing Act, I think is a good step in the right direction to help maybe

loosen some things on the entitlement end, although I think that that's a tough road. But they need to get tighten the spread between the 30-year and the 10-year. Now, whether that can be done through Fannie and Freddie, it's hard to tell, but it's possible. Most importantly, the biggest thing that you can do in our opinion is invest in the industry. This industry has had negative productivity since 1987. It's the only industry in the U.S. to have negative productivity. So what I mean is off-site construction, manufacturing plants that can make the production process much more efficient. We did a three-year study on this that just wall panels alone would increase or reduce, I should say, the days on the job site for framing a home by up to 30%. There's a lot

that can be done, but it has to be done very rationally and very methodically. All right. John LaValle, thank you. Well, a notable tech wreck on Wall Street. Up next, the top tech analyst on whether there's more pain ahead for investors or if this pullback is an opportunity to buy. Welcome back to overtime. Well, tech tumbled after President Trump threatened a massive tariff increase on China. Mag 7 saw their worst day since April 16th. Those stocks also lost a total $770 billion in market cap today. That's equal to about an Eli Lilly. The NASDAQ falling more than 3 percent. It's worst day since April 16th. Chip stocks, the worst performing stocks in the NASDAQ 100, synopsis and arm holdings, due business in China. AMD also down sharply, but up 30% this week.

Other recent high flyers outside of chips, also getting hit, Shopify, Palantir, and App Levin. And joining us now with Patrick Moorhead for more insights and strategy. And Pat, we could use more insights. So tell me, Nvidia specifically, it was hit on China headlines in August and September, but it seemed to sort of take off from that. We're talking about all this open AI driven demand. And how much is this AI narrative exposed to China policy headlines? John, I think this is a complete overreaction.

Let's take Nvidia as an example. Nvidia zeroed out all revenue for China going forward. They just zeroed it out in all of their forecasts. But this is a left brain emotional reaction. I mean, listen, I understand companies like Apple, who, quite frankly, do most of the manufacturing in China and a little bit in India, but Nvidia and even AMD in particular make absolutely no sense. Well, how much of this might be about the optimism that it takes from businesses,

global businesses, to keep fueling this massive investment cycle? I mean, you've got as good a perspective as anybody on how this lines up on previous technology infrastructure cycles. It's been a long time since we've seen anything close to it, right? I mean, John, I've never seen anything like this, this evening eclipses.com. I do think with the run-up of so many stocks in the ecosystem, whether it was cloud service providers, chip companies, and everybody in between, it's getting so hot that the market was looking for any reason, any reason to sell off. And I think they found it. And I also think we can't just dismiss the shutdown. I think all of this is risk, even though right brain, it doesn't

make sense for tech. I would understand if we were going into a trade, a true trade war with Taiwan. Now, that would be very, very difficult where most of the leading edge ships, They're used in hyperscalers are all made in Taiwan, but we're talking about China that, sure, they do manufacture smartphones and PCs, but not leading-edge chips. So in light of that, how does this set us up for earnings? And what are the names you like the best here? So I do think in the AI trade will be quite strong. So I think it sets us up quite nicely.

I think Nvidia is going to do what they did before, which is do a beat and probably a meet on the forecast, and people will be disappointed in the forecast because it met because of these absolutely stratospheric type of expectations out there. But I think when it comes to even the hypers, I mean, they are on the move. And I think what was clear from Open AI's Dev Day of the trillions of tokens that were being consumed out there and the types of companies, a lot of startups. But, you know, you saw T-Mobile in there. You saw Salesforce in there, which I thought was quite interesting, which could be one of the canaries in the coal mine and where we're talking about these downstream. impacts here. All right. Well, watch it. Pat, thanks. Patrick Moorhead for more insights and strategy. Well, still ahead. A look at the key events to watch next week. Will bank earnings turn Wall Street's attention back to profits, or will the tariff issues continue to dominate?

Plus, why the CEO of an AI defense company is warning of the potential fallout from a rare earth crisis. Welcome back to overtime. Sure, there was a sell-off on Wall Street, but a trio of notable names hit new highs anyway, utility giant southern company, energy drink maker monster beverage, and pharmaceutical distribution company, Sankora. Well, check out the spike in rare earth's stocks. That's after China announced plans to impose more export controls on those materials and some products, including them, targeting in particular the fence and semiconductor industries. China's the largest refiner and producer of rare earth magnets.

I asked Tara Murphy Doherty, the CEO of Govini, this is a U.S. defense tech startup applying software and AI to military supply chains and programs, how rare earths affect not only trade, but also national security. The rare earth's crisis that we're in is a serious one because one of the things that you can see in the data that we have in our proprietary data set tracks national security programs down to the raw materials. So if you are a part of the Department of War or a program office in one of the military services. You have the ability to look at not just what are the parts that go into your system,

but what are the raw materials and the critical minerals that are involved in the fabrication of those parts and systems. And the prevalence of material and especially the processed minerals from China is very high. We have a very real dependence problem here in the United States. Well, Govini, which has contracts across the Department of War, announcing a new round of funding today now valued at $1.25 billion. It has surpassed $100 million in annual revenue. We also discussed the government shutdown, defense spending, competing with Palantir. You can watch the full interview on CNBC.com. But all those topics will continue to be in focus come Monday as well because I will be sitting down with the Secretary of the U.S. Army, Dan Driscoll, and you don't want

to miss that either. Looking forward to it. Well, also time to watch Big Bank Theory as those names kickoff earning season next week. Up next, can those results help stocks rebound from today's sell-off? We'll be right back. Welcome back to overtime. We'll sharpen your pencils to prep for next week's trade as earning season kicks off Tuesday with Big Banks JPMorgan, City, Wells Fargo, and Goldman Sachs. We also get Johnson & Johnson and Dominoes. On Wednesday, Morgan Stanley, Bank of America, and PNC report. U.S. Bank Corp, Travelers, BN.Y. Mellon, Charles Schwab, N. CSX are the big names on Thursday. And the week closes out with 5th 3rd, Comerica, Regions Financial, State Street, Truest and American Express. Well, on the economic front, we will get the Fed's

beige book on Wednesday. Homebuilder sentiment Thursday, industrial production on Friday, and depending on whether the government shutdown is resolved, PPI retail sales, weekly jobless claims are due Thursday. Housing starts on Friday. The Bureau of Labor Statistics today announcing it will release the CPI report on October 24th. That's after originally being scheduled for next week as well. So let's get back to today's sell-off, how to think about not only today, but how you position yourself for next week. The Dow having its worst day since June 13th, all three major averages ending your session lows. Our next guest joins us with the most important catalyst to watch next week. Vital Knowledge founder, Adam, Chrisafouli. Adam, it's great to

have you on. And let's start right there with the down draft we saw in stocks. I would imagine maybe a little starker even than we'd otherwise see because we're going into a weekend and there's obviously a headline uncertainty here. Yeah, I definitely think that, you know, tariffs had kind of moved away from the forefront of the narrative for the last several weeks. And so, you know, this definitely, I think, shocked markets

we've had in the last 48 hours or so, we had kind of a series of announcements from both sides, so it's not terribly unexpected, but this obviously shocked markets and kind of brought tariffs back to the fore. but we were also just very extended, very frothy, very expensive. And so the market was somewhat vulnerable, it could have been anything. It just happened to be tariffs that knocked it lower.

Yeah. So how does that position us then for next week as earning season gets underway? So, you know, obviously I think we'll be on China Watch. We'll be on China Watch throughout the weekend. There aren't any major events scheduled that pertain to China specifically. We will have the IMF World Bank meetings in Washington next week that will kind of be an unofficial form or a lot of international officials. will be gathered in one place.

Perhaps you'll see some commentary around the sidelines with regards to trade. But otherwise, aside from that, the focus will definitely be on earnings next week. Specifically, AI linked earnings. So you have ASML and Taiwan Semi are both crucial players in the semiconductor AI ecosystem. Though they have earnings ASML on Wednesday, Taiwan Semi on Thursday. We also have a huge job. Hold on. We got to get to Emily Wilkins in Washington.

Some breaking news on tariffs. more comments from President Trump. Emily. John, yes, Trump just posted on truth social, saying that he will be imposing a tariff of 100% on China over and above any tariff on what they are currently paying. He went on to say in that same truth social posts that come November 1st that the U.S.

is going to impose export controls on any and all critical software. Trump also saying that this is going to be based on the fact claiming that China will be taking unprecedented position He claims that China will be moving first in having large-scale export controls on virtually every product. And Trump is saying that this move by the U.S. is going to be in response to that. And, of course, this comes after back and forth earlier today on China, having these strict export controls on critical minerals. And then Trump responding to that, threatening tariffs, that now it seems like he is following through on that earlier warning, guys. All right, Emily, thank you so much for Eamon Javers' optimistic take that the specifics hadn't come out.

Yeah, taking a look here at Synopsis, which had gotten hit earlier in the year on dust up over software between the U.S. and China. Adam Christofouli, you still have him with us? Yeah, let's go back to you on this. The story keeps shifting, and we've got a whole weekend to digest it, but we've had a market that's been heavily influenced by retail traders determined to stay optimistic. and buy the dip. So what happens? Yes, I definitely, you know, this is definitely

going to be, you know, an overhang now for the next several weeks. It looked like November 1st was the implementation date. So that does give you some time to see if there's any type of negotiation. You know, we've had a series of examples

whereby the initial threat, you know, the actual implementation winds up being kind of less than the initial broadside threat. So we'll have to see. But definitely, you know, tariffs are kind of coming back to the forefront. And remember, there's also a huge Supreme Court case, the oral arguments on November 5th regarding tariffs that AEPA tariffs. And so that kind of is a whole other dimension to this tariff issue, which, again, markets haven't really been worrying about for the last couple of months.

So you have tariffs, plus a market that was very extended, very frothy already, which kind of makes for a toxic near-term environment. Does this make President Trump and she more likely to sit down for meeting at the end of the month or less likely? I think as things stand right now, I'd imagine that they still will sit down to meet. You know, it's kind of a, they're not getting together specifically to meet. They're going to meet on the sidelines of a pre-scheduled summit. So, you know, assuming both of them will attend that conference, they'll both be there. I'd have to imagine that they will speak at some point in some capacity. And you still have a few more weeks to kind of iron things out, like I said.

So I don't think you're going to see 100% tariffs go into effect and say, to expect for very long. But that doesn't mean that, you know, this is a dip that should be bought aggressively initially. I think there's a lot of uncertainty that we have to iron out. Sounds like it. Adam Chris Foley. Thank you. 30% currently is the across-the-board tariff, U.S. on China. Obviously, it depends on sectors. There's additional tariffs on certain things. This would take us up to, what, 130%. That does it first here at overtime?