Closing Bell - Closing Bell Overtime 10/8/26

Episode Date: October 8, 2026

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, Melissa Lee 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.

The bell is bringing an end to the trading day at the NYC. It's turning M ringing the bell. And here at the NASDAQ, its mission produce closing out the session. Welcome to closing bell overtime live from Studio B at the NASDAQ market site. I'm Carl Kintanilla, Melissa and Micahoff. Tech tumbling this afternoon on these concerns about OpenAI's revenue. NASDAQ 100 down about 1.5%. S&P losing a half a percent down just squeaking into the green. InVIDIA losing 3% part of Tech's afternoon downdraft on news that Open AI's annualized revenue

is $50 billion, not $70 billion, as reported last month. That number is seen as the best indicator for overall AI demand. We'll get a lot more on that news and the market reaction coming up. Also today, hurting stocks and oil prices. This jump will bring the latest developments on Iran and, of course, on the weather. And we'll dig into this deal when we're hitting the market. Starbucks reportedly interested in buying Chipotle. Starbucks down about 1% Chipotle up 7.

Does that deal make sense? We'll talk to an analyst that covers both companies. For more of the big moves in AI-related stocks following that OpenAI news, SimaMody's here at the NASDAQ with more. Hey, Sima. Quickly unwound as those revised OpenAI financials hit the tape, raising fresh concerns about the companies tied to this artificial intelligence buildout. Front and center, yes, we're the semiconductors. You mentioned Nvidia, AMD, that power open-Eyes, AI models. And there's Broadcom that is developing OpenAI's custom chip jalapeno.

They were down instantaneously on the news. as were the megacast. Remember Google and Amazon rent out cloud storage to Open AI. When Open AI is bringing in more money, the assumption is they can buy more. Oracle, which has been diversifying its clientele, but is still heavily dependent on the frontier lab. It saw its stock fall by around 6% on the day. There was Nebius, Corweave that leased the GPUs to the frontier labs, also selling off. Memory and storage, as the AI workload moves to inference, the thinking is there that memory will be needed more so later versus today.

Sanisk, so S.K. Heinex, all trending lower. And then there's the companies that specialize in optical technology like Coherence, Lomentum, Sienna used inside data centers. You can see all traded down by around 5 to 9% on the day and even names an energy that are in the midst of expanding production and working with the big AI labs to power digital infrastructure like Constellation, Bloom Energy. You can see down on the day as well. Although GE Vranova slightly higher. Apple, interestingly, emerging as a bright spot, a defensive tech play, closing the day higher by around 1%. Carl. All right, Seva, thanks so much. Let's get more on this OpenAI news that the company's revenue

may be less than some had anticipated. Our Kay Rooney joins us from San Francisco. What a day, Kate. Hey, Carl, yeah, we saw a lot of market reaction. As Seema mentioned, I am hearing from a source that this all comes down to accounting. So Open AI is now reporting $50 billion in annualized revenue. So yes, it is about $20 billion lower than what had been widely reported. We had heard it was around $68 billion for the latest. Some had the 70 billion. I am told that number had included gross revenue from some of its biggest cloud partners. The FTE was first to report this. The new revenue figure was adjusted from what I'm hearing as a cleaner number. So many are trying to do the same thing for Anthropic, stripping out that partner revenue and trying to compare

apples to apples as they look to do a massive fundraise, which I'll get to in a second. The numbers were disclosed from what I'm hearing to investors as part of an ongoing fundraise in private markets. From what I'm hearing, OpenAI is looking to raise around $30 billion at a $1.4 trillion valuation. That round, from what I'm hearing, has been gaining momentum, although no term sheets have been signed yet. No comment from Open AI on this, I should say, Carl. The FT headline, of course, did move markets, did take the NASDAQ down as investors took that word discrepancy as a possible threat to the entire AI buildout. The through line here is that if open AIs revenue is lower, could mean slower growth for a lot of the AI names,

and then the industry could be overbuilding, which really is the essence of the bear case. It also speaks to some of the opacity of what are now trillion-dollar companies in private markets that are so tied to public markets today was really just more evidence of that, Carl. Kate, I mean, not to throw shade at the FTA, but is the general read that they just took too simplistic a view or maybe didn't do some of that internal computation? Yeah, you know, I think, Carl, they were right in that there was a difference. There was a discrepancy, but the discrepancy is an accounting discrepancy. It's not like anything changed materially over the matter of time. It was just that the number that had been reported, which was accurate

in a lot of ways, included this chunk of cloud revenue that now when they're going out to investors, they're saying this is actually the cleaner revenue, this is the one we want to use. So I think it's fair for the FT to report that. And they also did have some of the details in the story, but what got the knee-jerk reaction, and where you saw a lot of the sell-off that we talked about earlier, that was the market saying, wait a minute, discrepancy, hold on, it's $20 billion lower. It's not like it dropped by $20 billion. But, I mean, the markets, you have so many algorithms now and so much of the trading is automated

that I think you see something on the wire that says $20 billion lower, and it is alarm bells. And so there's a lot of nuance, and I think it is fair to say, hold on, step back. It is an accounting thing. it's not just a huge drop in, you know, double-digit 10-plus billion dollar drop in revenue. Yeah, so I think it's worth sort of looking under the hood, but I think the FTs reporting is fair. Yeah.

The ALGOs definitely. The week's about to start. Well, we just had a fighter jet go behind this. Did you hear that? Oh, my gosh. Anyway. Always ask questions later, but it does. It has fed calls today, Kate, that we got to get these guys public and get some kind of

general accounting measures that we can all read. thing, the opacity, that's not going to change until these companies are public. And I think the other thing I'm hearing is it also underlines that when you get quarterly earnings from these companies, they are so key right now in the entire stock market. I mean, their private trillion dollar companies, it really underlines the importance of these two major AI companies when they do go public. I've been talking to bankers today who say, we want these companies to go public, but their earnings reports are going to be so closely watched by a lot of the mega-cap names. and a lot of any tech investor out there really does need to pay attention to these two companies.

Kate, thanks so much, Kay, Rooney. Today's tech-led pollback is a reminder, of course, of just how much is riding on the AI trade? If it stumbles like it did today, can the rest of the market carry that rally? Joining us to discuss today, Christina Hooper's man-group chief strategist, what a day to have you on, Kay, great to have you. It does sort of show you how much is riding on these pillars of technology. I mean, the top 10 stocks in tech basically are 40% of market cap. Oh, absolutely. And that comes with it in incredible vulnerability, which is something we're finally realizing on a day like today, or at least some investors are realizing on a day like today.

Do you think today changes psychology much? I don't think it changes psychology much. But if we have a number of days like this, and especially if we see yields continue to rise, because they tend to exert more downward pressure on the long duration assets like the tech names, Then I think we could see a real route in AI-related names, and that could sour investors. Although another lesson of today was how much buying went into treasuries. We got the 10-year back below 5 and a quarter. 10-year auction went okay.

The 30 went okay. Was that reassuring at all? Oh, I think it absolutely was reassuring, but we have to keep in mind that there are so many different factors driving yields. And most of them are likely to send yields higher. That's my view. I think fiscal discipline is a huge issue right now. And so the bond vigilantes may have gone back into their houses and caves for now. They will come back out.

Right. Or their French chateau for the moment, because I know you've been watching French bonds. Do you think that's important? It's an important story. I do, absolutely, because that is where the concern is. The French government bonds are the ones that are in the sick bed right now in the eyes of investors. And so that can certainly cause some level of contagion. So we have to watch that carefully.

And of course, when yields on one sovereign bond in the G7 go up, it often tends to bring up others. And of course, it has a ripple effect. Now, that doesn't always happen. The last week we've seen a little differentiation. Some yields have actually come down a little bit because investors have been more discerning. Right. We've been watching the French German spreads. Are clients asking if there's, like, good value?

value here? What if Le Pen, for example, puts forward a plan that's doable? I think the bigger question is, is this a disaster? Will we see contagion? Will we see some kind of default? There was back in August, one of the candidates, one of the French presidential candidates mentioned the possibility of defaulting on some of the bonds. Now, they were the ones that are government-owned, but it still caused a lot of nervousness and apprehension. And I think it's those disaster scenarios that many investors are worried about right now. Kind of brings us back to the Fed. We've gotten a fair amount of Fed speak last couple of days. This morning it was Waller, sort of hinting at flexibility. It seems like almost every Fed

Speaker last few days has basically said, don't worry about October. Is that fair? I think that's absolutely fair. And keep in mind that going into it, there was a very high hurdle because it's so close to the midterm elections. They don't want to be perceived as political. Yeah, I mean, although there's the corollaries that they rarely, maybe only once, have done a one and done, right? Most cycles go on for a while. Oh, absolutely. And they will hike again. I am sure that they will hike again this year.

And so what does that mean for your call? I've seen, I know BMP Paraba recommended shorting 30s with a 5-8 target. I think Barclays thinks six is doable. Are you in that camp? So, you know, I think we have to see how this all plays out because we could see some extraordinary circumstances where the Fed decides to lean on or utilize QE again. Now, that might sound crazy as we sit here today, right? But let's face it, the buyback level is pretty low. It's not going to have a material impact over time. And so if we see bond vigilantes come out, if there are bigger concerns, if yields are going on, Yes, we have control right now. It feels like things are in control. But if things get out of control again, we could see a scenario where the Fed has to consider something like QE. So I think everything is on the table depending upon how all of this plays out. Right. Finally, in some areas of, I guess we call it value now. We had an upgrade to some restaurant names. We're going to talk about Starbucks Chipotle later on this hour. Buffett's Berkshire's been nibbling at Lanar. Are you looking for value in some of those?

downbeaten, more consumer-facing industries? Well, I certainly think it's important to be looking for lower valuation names, but I think we need to be very, very careful in the consumer space because we're seeing weakness creep up into middle-income consumers. We heard it from the Dollar Tree CEO not too long ago, that the middle-income consumers are behaving more like lower-income consumers. So we have to be very careful and discerning there. Plus, we've got a hurricane to worry about.

We'll talk about that now. Thanks, Christina. Good to see you. Christina Hooper. joining us this morning or this afternoon, actually another factor weighing on the market today was oil, crude going higher by more than 3 percent, back above 90. Two major factors. There's Iran increasing tanker attacks and this hurricane, threatening oil production in the Gulf.

Our Pippa Stevens has the latest on Iran. And Ackyweathers, Jeff Cornish is tracking the path of the storm. Pippa, let's begin with you. Hey, Carl, so oil did pull back from session highs in early afternoon trading after President Trump said on true social, quote, we will not be attacking Iran at any time prior to the Michigan. term elections, adding, we are having productive discussions with the Islamic Republic of Iran. And that followed reports from last night that the U.S. was discussing possibly resuming large-scale military operations, with President Trump also saying yesterday, he no longer wants a deal.

But the oil market is taking this in stride because while prices did pull back, Brent still settled the day above 104 as Iran steps up attacks on tankers in the Gulf. And while flows prior to these attacks had normalized, there's a growing consensus that the current situation of escorts, logistical frictions, and constant risk of attack is not sustainable. TD saying that ultimately warrants a sticky risk premium to remain in pricing and that CTAs are buyers here and are long across all momentum signals once again. Meantime, diesel futures jumping more than 5 percent, as Ukraine's armed forces said on telegram, they hit Russia's Omsk Oil Refinery. That is the largest in the country and about

2,500 kilometers from Ukraine. The facility was previously targeted in July. And here in the U.S., 1.3 million barrels per day of offshore production in the Gulf of Mexico is now offline as Hurricane Isaiah strengthens. That's about 63% of the region's output. Carl? Two of the elements of this story, people that keep getting attention. One is the difference between dated Brent and so-called physical Brent, where you actually need it right now and the premium you're willing to pay to get it. And then this notion of not that we're in a supply crunch, but we're in a tanker crunch and what that's doing to tanker rates. That's right. So on the first point, we talked a lot at the beginning of the conflict.

about the difference in the physical versus paper markets, and that is now coming again to the four. We do see dated Brent trading around $130. And so that, you know, if you want to take the pessimistic view, you could say that that is refiners getting ahead of it and saying we want to secure that oil right now because they think that there's going to be an escalation, particularly with the rhetoric we've heard

and then kind of, you know, the before or after midterms being a question, that's refiner saying we want that now and perhaps saying that they are not, confident they'll be able to secure oil looking into the future. And then on the second point, I mean, the cost to transport oil has now gone through the roof. We've seen tanker rates hit, hit record highs. And that is not sustainable long term. Because what's happening right now, one of the key ways that oil is getting out of Fremuz is via ship-to-ship transfer. And that requires double the number of ships to transport the exact same amount of oil. And that then ultimately

trickles through onto consumers. It kind of distorts the entire ecosystem of both dirty and clean product tankers around the world. And so increasingly people are saying that does not work. And while the ship owners are now seeing record earnings because they're getting these sky high prices for their charters, longer term, those flows will have to adjust. It will have to be, you know, those will have to come down essentially because those levels are just not sustainable here. Yeah. Yeah, MERSC today with some additional emergency fuel surcharges for some countries in Europe. Pippa, thanks so much, Pippa Stevens today. We want to show you the closing bell at CBO in Chicago, ending the regular trading day, for options. Let's get the latest on the hurricane as well. Jeff Cornish of Acqueweather joins us.

Jeff, what do we know? Good news is that even though this is going to be a very dangerous high-impact storm, from an oil production standpoint, we really do expect this to stay east of the far, greater concentration of rigs that are generally west of the Florida-Alabama line. So the storm, it's a nasty one, currently Category 1. It's strengthening and intensifying. And we do expect to see this continue to close in. on the coast making landfall tomorrow night. Beyond the rigs when it comes to oil refineries,

also in this case, most of them are west of the primary impact zone. You might say, well, look at this in Mobile. It's going to be a hard-hit mobile. That is the case. It will become a lopsided storm, though, so there will be far greater impacts on the east side of the storm, as opposed to on the west side where the largest refineries are located in Texas and in Louisiana.

So the current stats, here we are with Hurricane East Ais, a late blooming hurricane, extraordinarily rare, breaking a record for the latest first hurricane of the season. Maxisdain wins 85 miles per hour. It's in an area where strengthening is likely to continue to some extent, but farther north there will be more wind shear that it could make the storm a little more lopsided. We do expect landfall between Mobile Bay and probably a little east of there into the western part of the Florida Panhandle Friday evening between 8 p.m. and 1 a.m. So a very dangerous destructive storm with fierce winds in the eastern eye wall, especially near P. Pensacola with Gus over 100 miles per hour. Jeff, appreciate the tailored forecast as well, looking at the oil production, Jeff Cornish over at Acqueweather.

When we come back, Starbucks reportedly considering buying Chipotle, would a merger make sense? We'll discuss that. And then check out shares of PepsiCo today, higher after beating on earnings and revenue, despite some weakness in North America. This is what Ramon Liguard had told us earlier this morning on Squawk on the street about the state of the U.S. consumer. We see the consumer resilient. As you were saying, at overall level, the consumer is very resilient. Now, every consumer is different. They're clearly becoming very nuanced in where they invests their money,

where they think it's worth this spend. So for companies like ours and the standing consumers very granularly dissecting every consumer and being able to provide on a very almost personalized way, what they want is critical. Starbucks and Jopole moving in opposite directions today after the FT, reported that Starbucks is brewing a possible takeover at least discussions of Chipotle. In response to that report, a Starbucks spokesperson said, we don't comment on rumors and speculation. Our team is laser-focused on executing our back-to-Starbucks strategy. If true, it would be the largest merger ever in the restaurant sector.

But does a deal really make sense for either company? Joining us here is Jacob Aiken Phillips from Melius Research, who I think is not skeptical on this happening. Is that fair to say? Yes, first of all, thanks for having me. but yeah, it doesn't seem quite that intuitive at first look, just a coffee company with Global Scale in Chipotle. There are some similarities, of course, they have the read-through of Nickel,

having been the CEO of both of them. But from my conversations with clients and just my reckoning, it just seems like it's mainly a GNA and tech that could be synergies, but maybe Brian knows something that's something. Right. Well, that was sort of the joke this morning on the tape and on social media is that the simple, similarities in the menu, certainly their input reservoirs, seem to be a little bit disparate, yes?

Yes, yes, certainly. Did the statement about focused on our own existing strategy do much to convince you either way, whether they're serious or have looked at this? I wouldn't say that. I mean, certainly they do need to continue to do their existing strategy and prove themselves. They just started showing positive same-store sales

and positive traffic in the U.S. The operating margins finally expanded for the first time year-over-year, But it's still early innings, I would say, and they need to be able to maintain that for years to come in order to justify the valuation. The other point you make is this would require pretty hefty financing, right? How much in new net debt? Yes, certainly. So just rough math, if you do a 30% premium, $40 for Chopoil, it's about $50 billion. If you assume half of that's debt, $25 billion, that would put them like at $3.0 leverage, which isn't too high, but if they go higher debt, obviously.

And then in every scenario, it's like down, accretion-wise, dilute of about mid-single digits. Right. So they'd have to raise another 20, 25? What do you think? Yeah. I mean, potentially more, it's just a decision of whether they want to dilute their current equity holders or if they want to raise debt and take on that interest burden. Do you think, where is their value into the Chipotle name?

And how would you gauge their own turnaround right now? Of course there's value. So they've kind of had the opposite story where they've, for success, for years, a lot of that being under Brian Nickel. And over the last year, they've had some negative traffic, and that's just starting to turn around. The story is just starting to get a little bit more positive. So there's certainly value, and their shareholders will see the re-rating that's happened

over the last year and may not think something like $40, which I assumed is justified. It may want something much higher. Right. Does it lead you to believe that there are a bunch of different players sort of kicking tires at the moment, given how valuations have come in? And how kind of the regulatory backdrop's not that tough. Yeah, certainly, I'd say that the FTC is probably more minimal to these large acquisitions. I also cover the Cogger Albertsons that famously failed.

Another big one is Cisco and Restaurant Depot. That's another $30 billion merger. So it makes sense that they might be going after this with valuations, but interest costs are very high. It rates of prison a lot, so it's a double-edged store. Finally, you did upgrade before any of this this morning. You upgraded Kava. What did you see there? Yeah, that kind of got a lot.

They've re-rated basically 50%. They were near $100 earlier in the year and are at $50 as of this morning. And the backing of it and the proof that they're able to sustainably grow their portfolio across the country, continue to do same-shore sales and leverage on those sales with these high AUVs, which are equal to Chipotle now. I think that's underappreciated at the time. Interesting, yeah. What a day in your space.

Thanks, Jacob. Good to see you. Thank you so much. Thank you. neelius. Macroeconomic pressures weighing on Bitcoin today, bringing it back down towards 80K. Ethereum hit even harder, down four. Throughout crypto's history, we've heard not just about the importance of the currencies, but about the underlying blockchain technology. Now a company called Securitize is launching blockchain-based tokenized stock trading. How exactly would that work?

And do the markets really need this? Well, as the CEO of Securitize next on Closy Mail Overtime. We've been tracking the evolution. of how investors trade stocks as companies look to serve new and younger customers. Today we got a step in the race to tokenize traditional stocks, securitize announcing its bringing shares of Apple, Nvidia, Tesla, and nine other tech companies to its Solana-based blockchain platform. Stocks are also expected to trade on the NYSE's planned 24-7 digital trading platform if and when that venue launches.

Last month, the SEC rolled out an innovation exemption to open a path for trading tokenized securities, is it the future of trading? Joining us now in a first on CNBC interview is Carlos Domingo, securitized chairman and CEO, shares in the firm jumping today and a more than doubled since mid-August as tokenization has gained some mainstream appeal. Carlos, thanks for coming in. Good to have you. Thanks for having. So do you want to back up and explain to a novice how this works? What you announced? What we announced, basically, is we're going to be launching tokenized stocks that are, you know, fully regulated under SEC rules and that are tradable here in the U.S. So far, that market has mainly developed offshore, creating synthetic exposure to the price.

What we're doing is bringing this onshore in the U.S. following U.S. regulations. So how would it work? What would I need to do or have anything different than I do now when I trade, Nvidia or Palantir? You need to have a wallet, a digital wallet that works in the Solana blockchain, which is where we have, you know, launched this. You need to have stable coins because we will trade against stable coins. And then you will be able to, you know, trade extended hours, moving to the solar and 24-7 soon. You'll be able to have instant settlement. In the future, we'll be able to,

like, borrow against your stocks in a more efficient way, et cetera. So there's a host of, like, improvements that we're providing to how the training experience works today. You've been working on this a long time. Long time, nine years ago. What has made it, what has changed that allows it to happen now? I think it's a lot of things have changed. First, we became over the years a regulated company, so obviously this is a regulated activity because we're touching securities, so we can transfer agent, broker-dealer, et cetera. Second, the infrastructure, the blockchain infrastructure has improved significantly the user experience, the speed, how it works, security, et cetera. And the thirdly,

as you mentioned at your intro, the SEC now is super pro, you know, innovation in capital markets and tokenization in particular is one of the things that they've been, you know, making a lot of progress to allow companies like us to operate in the U.S. Right. When does it go live? It's going live today. Live today. Yeah, we don't announce things until they're like. Until they're absolutely ready. And then how broad do you think it can get in the number of tickers? How quickly? Oh, we want to be, you know, cautious about to make sure the pricing is good, the liquidity

is there, the user experience is the right. That's why the size is. As we picked, like, the first 12 names, which are some of the most liquid names plus some other, like very popular cryptonyms like Circle. But the idea is to expand to, you know, at least 75 before the end of the year. That's our target. And then, as you know, we're also going to be trading on this TSVs for innovation exemption, where they also have, you know, a limit in the number of names.

But, yes, ultimately, we want to trade every name. In terms of adoption and mainstream interest, is it mostly an American story? Or are the Europeans on board with this kind of stuff as well? Actually, today is more of an offshore story just because nobody has launched anything that is regulated and legal in the U.S. And this is the problem, right? I was actually a few minutes ago with James Heaway from the SEC. And he was saying, you know, we want to bring innovation here to the U.S. and this is today happening offshore.

So yes, today is an offshore thing, but hopefully we'll make it a U.S. story. where the people from other countries will be able to trade as well, protected by U.S. regulations. Does policy need to evolve further, or is all of that set for this market to really grow? No, no, no, no. They needs to evolve. Today we have, you know, exempted relief to be able to do certain things. We want this to turn into rulemaking, so it's not something another administration can change. There's still a lot of, like, you know, limitations on the things that we can do that we hope that they get expanded over time. So this is going to evolve. And then in the coming days, what will you?

be looking forward to determine how it's going, so to speak. Well, I want to see the user experience is good. The pricing we're providing matches the prices that you're getting in national exchanges. We're going to be able to start enabling lending, you know, like all the activities that things that you are hard to do today when you stock are trapped on a brokerage account. And then as that, those things happen, we'll be adding more names. Well, we might be in a moment here. We'll see how it evolves.

We're very excited about it. Yes. Congratulations. Carlos, stay close. Thank you. Good to see you. Thank you. Carlos Domingo. Thanks for hiring me. Time for a CNBC news update. For that, we'll turn to Brandon Gomez.

Hey, Brandon. Hey, Carl. The USS Lincoln has returned home after supporting the Iran war over a record long deployment of 265 uninterrupted days at sea and 322 days total. The ship endured food shortages and reports of deteriorating mental health on board. Defense Secretary Pete Hegeseth flew out to the carrier yesterday to give the crew the presidential unit citation. That's the highest honor a unit can receive. Meantime Ukrainian President Vladimir Zelenskyy said today's Kiev's European partners are expected to join talks with the U.S. in the coming days. U.S. and Ukrainian officials tell MS Now negotiators will meet in Miami tomorrow to discuss a new proposal to end the nearly five-year war with Russia.

And Disney, reportedly holding talks with a number of Hollywood studios about using Infinity Vision, its new big-screen theater experience that has been designed to compete with IMAX. According to Bloomberg, the media giant has met with Skydance Corpse Paramount Pictures, Comcast, Universal Pictures, and Sony Pictures Entertainment to make the pitch. So maybe come into a theater near you, Carl. Yeah, IMAX shares hit the lowest since July today. Interesting. Thanks, Brandon, Brandon Gomez. When we come back, Connecticut Governor Ned Lamont on his state's new AI regulation and data privacy laws that just went into effect and how they'll impact both businesses and workers. Closing Bell overtime. Be right back. Welcome back to closing bell overtime live from the NASDAQ market side. Tech stocks down today.

As concerned about open AI revenue raises some concerns about the entire AI trade. NASDAQ down one and a quarter percent. S&P down about half. Small gains for both the Dow and the NASDAQ. InVIDIA lost 3 percent. Other chip names with even bigger losses, Intel down 5. As you can see, that selling spread through every area of the AI trade, sand disk and memory coherent.

The optical component maker was the biggest loser. on the S&P 500 today. Power companies down as well. Oracle losing 5%, one of its worst days in months. And T-Mobile, Verizon AT&T, all down after market. SpaceX announcing the acquisition

of low-band spectrum licenses, which will pave the way for Starlink Mobile to become a major carrier in the U.S. Meantime talks over how to rein in AI has become a national issue as some of the biggest names in the industry call for some guardrails.

Even though the Trump administration isn't keen on regulating the technology, Some states are moving ahead with their own regulations like Connecticut. New laws went into effect last week in the state that ran in on how AI is used in employment decisions, workforce development, and online safety for minors. Joining us here, Connecticut Governor Ned Lamont, talk about all that and more. Governor, it's great to have you in. Nice to see it, Carl.

Was this something states want to do, or is it just knowing that at the federal level, this is not going to happen? No, I thought it was insane that 50 states are all going to have their own different types of AI. regulation. I really thought it ought to be led by the Fed so you could standardize this, but the White House doesn't want to do it. And there's an awful lot of pushback we have right now. The tech pros are not really sold AI very well. There's a lot of fears out there. So we had to give people some confidence that you may think it's one of the most important innovations of our lifetime. We're also going to do everything we can to keep you safe. We're starting with the kids. We're saying none of those AI chat box companions whirspring sweet nothings into your

teenager. We're going to stop that. We're doing that along with our neighboring states. AP had a poll out today. They asked respondents whether they think AI is moving too slow, too fast, just right. I think 64% said too fast. Do you know what it is about it, the technology that constituents or voters are most fearful about? I think they listen to the tech bros. You know, they're talking about this could take your job, algorithmic bias. The world could come to an end. I mean, I can see why there's some hesitancy out there. You know, we've got to do a better job, I think, of telling people, this is how we can keep you safe.

This is how we can keep our kids safe. We're going to make sure at a national level we do this, but these are the innovations that can save lives. But do you think it's about more than just they might increase my electric bill? Or it's going to take some water resources. It's more than that. More than just a classic NIMBY problem? Well, my issue with data centers was more about the fact that it would suck as much electricity

is southern Connecticut and jack up electric prices. So I said, look, if we're going to do anything on data, you better bring in your own power along with you. That's a starter. Right. Are you, do you think states are coordinating with each other to keep, to keep policy being as little fragmented as possible? Yeah, we coordinate informally, but it's really important that Connecticut not have a unique set of rules. It's better if I can work with Kathy down here in New York and more up in Massachusetts, speak with one voice, and that's what we're trying to do. Data Center moratorium. Page 1 in the Raleigh News and Observer

today was about a six-month moratorium on data centers. Is there liability in putting a pause on that or do voters really want it? Look, I think what voters want to know is we're doing everything we can to keep you safe, slowing down data centers until we get that right.

But I don't think we need a blanket moratorium. By the way, what's the data center? If Cigna wants to upgrade their IT facility, we've got to let them do that. So you've got to be careful about these words. Right. Meantime, we've spent a lot of our time talking about energy and costs and moving into the winter. Heating oil is a concern, especially in the Northeast. Is it not? Yeah. The price of home heating oil, and most of our homes are done with home heating oil, is going to go up about 80%.

And we provide support to working families that have a hard time affording that, you know, you've got to keep people warm in the winter. So I think the state will have to step up and make up some of that shortfall. We're working on that proposal right now. How are you feeling about midterms in general? You think there'll be much policy change if the Dems take the House and maybe the Senate, maybe not? I hope so. You do? I hope so. I mean, I see what's coming out of this administration.

As a former business guy, I can't stand the uncertainty and unpredictability. If you want to raise tariffs, raise it but do it on a consistent basis. Instead, the herky jerky style is really tough. And it's tough on government as well because one day we're going to have mental health grants for our schools. the next day they've gone back, then again. So you really need the change direction, I think. And, you know, I'm worried about what they're going to do, health care costs.

They're going to jack that up. Just as energy prices are going up, sorry, health care costs. A lot of that's related to the feds and Medicaid. That's another poll issue. I think I saw this week health care concerns are topping even energy concerns in some polling. That seems to ring true probably where you are. Yeah, the state of Connecticut, we've had eight balanced budgets in a row.

We finally got our pensions under control. They're going like this. Now we've got them stabilized, and it's health care costs that are eating us. And I'd like to see the feds take more of a lead on this. But short of that, I think the states can do a lot on their own. We are certainly in Connecticut. That said, labor market's pretty good. Jobless claims today were pretty tame.

You've got to feel good about the resiliency of the economy to withstand some of these shots. I agree with you. I mean, it sort of surprises me. You see what's going on around the world. But in particular in Connecticut, we've gone from one of the slowest growing states in the country to the second fastest in manufacturing, seven-fessional. passes overall. A rising tide doesn't lift all ships, but it sure helps. You know what will freak out the market a bit as if taxes, tax increases, start to become

a main topic of conversation going into 27. Do you think that's likely, either on income or corporate? Not at the state level, not at the Connecticut level. We're in a very competitive environment, so I've been very careful. We haven't raised income tax. The fact, we reduced it. We'll see what happens at the federal level, because you can't keep going with $2 trillion deficits as far as I can see. There'll have to be a compromise there. Bond market has something to say about that. A lot happening this fall, Governor. It's great to have you in. Thanks for joining us.

Nice to see you. Ned Lamont of Connecticut. When we come back, we'll look at how higher prices of goods and rising interest rates are impacting consumers spending and sentiment ahead of the holiday shopping season. Closing bell overtime live from the NASDAQ market site. I'll be right back. Some big moves after hours in health insurance names. Medicare Advantage releasing its latest star ratings, Humana up 15, as its rating improved above the threshold for bonus payments, which could mean billions of dollars. CVS Health down four, a line getting hit hard as well. Rising interest rates and oil prices,

putting pressure on the markets, but are they also stressing out consumers? Our Steve Leesman joins us with the latest results of our CNBC NRF retail monitor. Is there a new methodology here? Just wait. Big, big changes. I'll get to that in the second. I want to give the headlines first. CNBC NRF retail monitor showing the consumer remaining resilient in September, but revealing some stresses from higher interest rates and oil prices. Overall sales, Ex-auto and gas, that's our top line number, growing 0.28%, about a 10th below the long run average. And we use real credit card spending data from Affinity Solutions. The monitor shows the year-over-year rate rising 4.05% up from last year,

again, below the average. Take out restaurants for our core number and sales rising 0.27 for the month. That's 3.7% year-over-year. Gas station sales surging. Five and a half percent. That's a monthly number, folks, and that likely explains weakness in things like general merchandise and sporting goods, those discretionary items. Still health care, personal care, electronics and clothing, they had a good month helped by a strong back-to-school shopping season, according to the NRF. Home furnishings and buildings, well, not so good. They came in weak, a potential sign of how high rates are hurting the housing markets. You don't go buy the stuff for the new homes. This month, as Carl suggested, marks the debut of a new massively expanded retail.

monitor, which we believe makes it the largest source of real monthly credit card spending data in the country. What do we do? We increase reported monthly sales to $40 billion. That's up from eight with the original. We are now drawing from 120 million credit cards, up from 26 million, and we will give you gross dollar sales seasonally adjusted and not. The data model to the census here, I'm talking to my economic friends out there. They're going to want to know these questions because they're going to use it. It's going to let us look in-depth at it. It's going to let us look in-depth that income, age groups, boring on geographic trends. We could look, for example, at how the World Cup affected a town and stuff like that.

But the story called us to wrap up. Consumer remains resilient, but we want to watch that resilience. Do you think, I mean, we talk a lot about the saving rate coming in, wealth effect being more important. Are they running out of pillars? You know, look, we juice the economy. We had that tax refund. That took us a little while. Maybe they didn't spend all of it.

That's one thing. Look, bottom line is I have one rule that had it for like 25 years. Watch employment. Okay? On the margin, you can do better or worse. You do much worse if we have an employment problem. You can do much better if we're putting more people back to work. So I'm not especially concerned about the consumer giving it up big time, but I do, I'm not surprised to see a little bit of weakness because of the two factors that are buffeting them, the high oil prices and high interest rates.

Finally, between Waller today, Williams, Jefferson, odds are moving around a lot for a Fed that doesn't want to do much comms. Yeah, it's interesting. Well, look, this is what Warsh gets if he's not going to take the lead. Other people are going to take the lead. The market's going to spend a whole lot of time listening to them. If the chairman wants to come out, nothing stops for making a statement. Kevin, give me a call. If you want, you know, whatever you want to do here.

But if he wants to, he can. But I assume he's satisfied with the other. folks saying these things. I'm watching the market, 17% probability of a hike in October, 85, 89% for December. That's the way the market's priced. The question becomes how you go into the meeting. If you go into the meeting all the way on one side, it kind of forces the Fed's hand, unless it has some reason or doesn't mind a major surprise in the market. I don't generally think that the Fed thinks it's a good thing to have a big surprise on the day of the meeting. But we'll see. I mean, right now, we used to go in in the old days.

That is before Powell, about that long ago. 95% one way. And then the last several meetings we've got in with much higher probabilities of the opposite happening. Yeah, yeah. Well, we'll learn a lot more next week. Yeah. Steve, thanks.

Thanks. Coming up, our retail trader is starting to lose confidence in this market amid these rising rates. Up next, Schwab's head trading strategist on how his clients are feeling and what they're buying and selling right now. A recent survey from Charles Schwab, shows investors are turning more bearish for October after a September that saw clients try to reduce concentration risk. But active traders are more bullish on the market and view a potential market pullback as a buying opportunity.

Here to discuss where clients are buying and selling is Charles Schwab head trading strategist, Joe Mazzola. Joe, good to see you. Thanks, Carl. Walk us through how you think psychology has evolved these last, say, six to eight weeks. You know, I think your last segment dovetails really nicely into what we're going to talk about because September showed a resilience. investor, but there were some, I would say, wholesale changes at the portfolio level that indicate maybe some reduction in beta, some reduction in idiosyncratic risk. And here's what I mean. This was the first time since we've been kind of tracking our Schwab Trading Activity Index that

five ETFs were amongst the top 10 net buys. And the first time also that we saw an ETF at the top of the list as opposed to a single stock. So, I mean, it says to me that, investors still want to participate in this market, but they're looking for a little bit more broader participation as opposed to trying to pick the winners. Right. You think that's about evolution in technology trends or maybe the political cycle, something of each? You know, I think it speaks to what we heard in the survey from them. There's a few things that are coming to a bit of a bowling point. And there, you know, there is some concern around what we're seeing with interest rates and how that affects, you know, maybe some of that single stock tech

risk. We're also seeing a little bit of concern around, as you mentioned, you know, the election cycle and what that could do to the overall market framework. But I think it really comes down to things, some trimming of some winners, in particular, meta, AMD, Intel, those are three stocks that if you remember, Carl, in September, they were up 35, 40 percent. So we're seeing trimming of those winners. We're seeing a little bit more indiscriminate buying of maybe some of the stocks that didn't participate, Amazon being one, Broadcom being another. And then the stock that has been number one on the list for the past three months since the White Public has been SpaceX. That has been an amazing, amazing turn. I can see it there on your list of top buys. I mean,

it's interesting. You talk about the buy the dip mentality. I think we've gone, what, 40 some days without a 1% decline on the S&P. Can't get the VIX above 16 for more than five minutes. Yeah, it's been a really interesting market today, notwithstanding, because you add actually two to one advances over decliners, but yet you saw the indexes go down, especially on the NASDAQ. And I think it really speaks to the concentration risk that's built in the market right now, when, especially as we're heading into earnings season, and if you look back at what we saw in Q2, you know, 50% year-over-year earnings growth. But a lot of that was tied to two stocks, Micron and Invidia.

And so if you kind of pull that out and you look kind of below the surface, there's been a lot of churn. We haven't had a lot of participation from the other sectors. But on a day like today, when you do start to see some of that participation, and I think a lot of that was fueled by two things. Number one, a pullback in rates that kind of broadens some of that participation. But then the Open AI story definitely caused a bit of a pullback in the tech sector. So I think investors are, you know, they're really trying to figure out what's a landscape

as they're heading into earnings here. Yeah. Today was instructive in that sense, very much so, because of that FTPs, and just gave you a clue of what's underpinning some of this technology, psychology, and that rate action, too, really, really interesting. Joe, appreciate that very much. Great to talk to you as we work our way through the course of this week. Of course, we'll learn a lot more next week with CPI,

work our way toward the next Fed meeting. That does it for overtime. Fast money with Brian Sullivan begins right after this quick break.