Closing Bell - Closing Bell Overtime: 5/28/26

Episode Date: May 28, 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 NYSD Churchill asset management, ringing the closing bell and at the NASAC. Sale GP doing the honors here. Welcome to closing bell overtime. We're live in Studio B at the NASAC market site. I'm Melissa Lee along with Mike Santoli. Sox hired today as markets react to news of a potential deal between the U.S. and Iran. Record closing highs for everything. The Dow of very small gain, bigger moves for the S&P 500, NASAC, and the Russell 2000.

More than the market straight ahead. We have another busy hour of earnings ahead as well. some key retail names reporting, Costco, Gap, and American Eagle, and Dell also due out. That stock has been on a tear up more than 50 percent so far in May. And the cybersecurity firm, AQTA, also on our radar. Once those results come out, we will talk to the company's CEO, Todd McKinnon. First, the market action, I mean, today was an interesting day. We had reports of some sort of deal being reached that President Trump had to sign off on that

Iran says no, no deal. And yet the markets, it's like good enough for the markets, good enough to propel memory, higher, semi-conductors higher, same old trades. A lot of the market did sort of relax to the upside a little bit after those headlines, but it's really interesting how this is playing out, because you get these incremental reports that some kind of resolution is coming, and so we sort of ratchet down, the de-escalation takes place, and the market, I guess, incrementally prices it in. So in other words, we're not due for some kind of big relief rally once we get final resolution. Maybe we start to rotate around, but the S&P closed just shy of that 20.

20% up level, 19.8% off the March 30th lows. You've even started to see non-tech sectors start to kind of get a little bit of a bid, which suggests the market is kind of moving along toward assuming we have a near-term resolution. So I don't know if that switches the risk reward in terms of what the news flow might bring from here, but it's certainly, you know, apparent with a 15 plus VIX right now that this market is not under stress. No, not at all. And the fact that the same old trades, the ones that you might say look frothy, look crazy in terms of the moves higher, they are still going higher. I mean, Micron, two price target increases today,

Sandisk also with a price target increase. They continue going higher, along with semiconductors in general. Nvidia continues to underperform. So it's sort of the same theme just playing out over and over and over again. Without a doubt, along with some of the kind of speculative fringe stuff that just won't quit. And we'll talk about some of that as well. So, yeah, there's no doubt about it that people are very comfortable adding to risk day by day. Let's start with the latest on those peace talks with Iran.

Amon Javvers at the White House for us, kind of picking through what we know and what we've heard, Amon. Yeah, Mike, and there's a lot to pick through here, including just within the past couple of moments. We're getting a new report now as a SARS news agency. That is an Iranian news outlet closely associated with the IRGC. And what they are saying is that a few minutes ago, the Iranian armed forces fired missiles from the southern regions of the country toward targets.

The exact targets is not yet clear. but some sources are reporting to this news agency the possibility of clashes over the waters of the Persian Gulf. Some media outlets, again, according to the Iranian news agency, are reporting explosions in certain provinces. So it's unclear exactly what's happening in Iran at this very moment, but we do have reports now from Iranian sources of missile launches in the south of the country. And you guys were just talking about it. You raised the question of this Axios report from earlier today. that there is a deal that's been laid out,

and it's just waiting for President Trump's signature. We haven't seen any evidence of that, though, throughout the day today. That report came in around 11 o'clock this morning. We had Treasury Secretary Scott Bessent in the White House Press briefing room taking questions on camera from reporters earlier today. He was asked several times, can you confirm there's a deal, is there a deal, what's going on with this deal? And he declined to say that there is a deal that's been signed off on.

instead was in essence, look, it's up to the president. If the president wants to make a deal, he's going to make a deal. So he sort of ducked the question of whether there is some piece of paper circulating between the Iranians and the U.S. that's been signed off on and just waiting for some kind of final approval. Here's what he said specifically in response to that question. The teams have been going back and forth, and President Trump has made it very clear. He talked about it at the case that he has several red lines and Iran has to turn over their highly enriched uranium. They cannot pursue a nuclear weapon. And he reasserted the president's red lines here. And that, of course, is something that we've known for some time. What he didn't do is confirm

this new reporting, which is that there is some kind of document that's on the record on camera from anybody here at the White House. What we also don't have is anybody in Iran saying that there's a deal. We do have a report. from another IRGC-linked news organization. This one called Tasnim News. Again, this is an organization that is linked to the Iranian Revolutionary Guard Corps, so we'll be providing their perspective.

And they are saying, contrary to some Western sources claims that the so-called memorandum of understanding text between Iran and the U.S. has been finalized and is only awaiting announcement by both sides, that is not true, and the text has not been finalized yet. So where do we stand as of 4 p.m. Eastern, time here at the White House. We have no on-camera official confirmation from the White House

from anybody on the record here that such a deal exists, and we have the Iranians denying it, and that's where we're at. Back over to you. All right. Amen, thank you for keeping track of all of that. Amon Javers at the White House. Let's get to the market moves driven in part by the Iran news, but also by earnings. Sima Modi's looking at the movers for us. Seema. Hey, Melissa, yeah, Snowflake was a big story in tech today with earnings providing a key catalyst for the stock, which saw its largest gain in over five years. I've provided a much-needed boost for software with the IGV and the CHIPC-TF both trading higher on the day.

Specific winners in software, including names that operate sort of in the universe that snowflake is in. Data Infrastructure like Palantir, Data Dog, Oracle, all higher on the day. Also, check out Service Now, more on the SaaS side on pace for its fifth straight weekly game for the first time since mid-2020. Now, the Red Hot Rally and Memory Sox continues to run. roll on sandisk and cgate are higher along with the DRAM memory ETF iron taking a pause after surging earlier this week on a hardware partnership with Dell down about 5.6 percent on the day and phototronics tanking after disappointing earnings the company blaming memory supply constraints

for the weak results you'll see that stock down nearly 37 percent Melissa and Mike all right sima thanks Simomodi dell earnings are out let's get straight to Julie Borson for that Julia was the Dell beating expectations across the board, sending the stock higher. We see shares are now up about 2% and after hours trading earnings of $4.86, soaring ahead of estimates of $2.94, revenues of $43.84 billion, well ahead of estimates of $35.4 billion. The company is showing extraordinary growth in its AI optimized servers revenue, generating $16 billion in revenue for that division this quarter. That's up 757% year over year. also raising its full year revenue target for AI optimized server revenue by $10 billion to now $60 billion,

as COO Jeff Clark noted in the release, the AI opportunity shows no signs of slowing. And Dell is bullish that this AI-driven growth will continue well ahead of expectations guiding to second quarter revenue between $44 and $45 billion, well ahead of the consensus estimate of $40 billion. Dell is also giving very strong Q2 EPS guidance and is raising its process. profit outlook for the year, now guiding to full-year EPS of $17.90. The consensus, $13.9. Melissa? Julia, thank you, Julia Borson. And keep in mind, this is on top of a big jump that we saw on Dell shares during the session on news that it had secured a contract with the Pentagon yesterday.

Remarkable. So 1790 full-year guidance for earnings per share. As of January 30th, that number was 1150. So essentially, it's over 50% higher for the full year. than we thought four months ago. Yeah. And that kind of explains why you've gotten these massive accelerating moves to higher in the stocks.

Yeah. We're seeing Dell shares up by more than 4%. We'll continue to track that. Meantime, as we mentioned, all the major averages hitting all-time highs today, getting a boost partially from the Iran news as earnings season winds down. Will the end to the geopolitical conflict be the next driver for more highs in the market? Joining us now is City Wealth Chief Investment Officer, Kate, great to have you with us. Yeah, good to see.

I mean, you're sitting here when Aeman was giving the report. I mean, it's like he said, she said constantly, we don't have a deal at the end of the day. And yet the markets march steadily higher, even if it's bit by bit, bit by bit, brick by brick in this wall, with the same sort of trades propelling the markets higher. What do you make of this action? Is this sort of pull forward for that moment when we do have a resolution? Yeah, I think a lot of the snapback we saw since the lows in March was this acceptance that there was going to be a resolution at some point. But obviously, we know, like, the scope of that and the timing of that is still anybody's guess, as we just heard from Maimon, and is kind of our expectation as well.

I really do think what's been driving the market higher is, frankly, the power of the technology earnings. And obviously, we just heard that from Dell, and we just were talking about the raising of guidance as well. Just phenomenal. But this has been happening company after company throughout the course of this earning season. So if the markets are only focusing on one thing at a time, they're not really focusing on the Iran War and the implications of kind of, kind of. of higher oil prices and higher chemical prices on a broad swath of consumer goods. They're instead saying this AI and technology super cycle is full steam ahead. I wonder about just the pace of growth of those earnings.

We've just never really seen this. We have not. It's the largest companies in the world deciding all of our cash flow goes in this one direction. You kind of unleash it on the rest of the technology hardware complex. And then the market is willing to kind of put a multiple on all of it. Right. And, you know, you're seeing earnings growth rates that normally you see kind of coming out of a massive downturn. Yeah. Does it threaten to sort of get us a little bit even further out of balance in terms of that's the only thing working right now?

We're going to, you know, kind of take that to its fullest extent? Yeah, look, it's a little bit uncomfortable and full disclosure. I mean, I was looking back at my notes that I gave to our internal global call about a month ago at the really start of the reporting season in earnest. And I basically said, hey, 14 to 16 percent earnings growth sounds pretty good. here we are a month later and we're in the mid to high 20s. I would never have expected this type of momentum. And of course, the analyst didn't either. And the breadth of companies feeding has been enormous. So I think it's natural for people to be a little uncomfortable at this point. This is not early cycle. We're not coming out of a recession, as you mentioned. This is mid-cycle.

But we're also talking about this massive disruption, this huge technological change, and that these companies are being able to harness the growth of this technology. in a way that an analyst were underestimating, I think, at the beginning of this year. A lot of questions we get from our clients are like, what do we do outside of AI and tech? How do we go ahead and diversify our exposures in the equity side? And the uncomfortable answer I give is, frankly, all the stories that are working in equity land are around tech adoption, even if you're not in like a hyperscaler or a provider or a chip company, right? You are a company that is showing that you're increasing your productivity, your efficiency, you know, cutting down your labor costs in some cases or opening up new business lines because you're adopting the technology.

And so I get it. It's uncomfortable, but I'm not going to stand in way of this train. Does this all overshadow, though, the concerns that you brought up before in terms of higher input costs going, you know, feeding through the economy and having an impact finally? Yeah, I think this is a big one because we've been a little bit overfocused on or more focused on inflation and the breadth of inflation than we've heard other people. on the street. In particular, we kind of note the number of components of CPI and PCE that are running either about that 3% threshold that Waller has talked about are 5%, which has been our kind of line in the sand. And you get almost half of the components in the last CPI running at a 5% or higher annualized clip. So there was a breadth of inflation even before some of this energy pass through. And as we kind of realize some of the higher costs from oil, chemicals, and all the derivative products, you know,

We think inflation is going to be here for longer. And of course, today's PC report echoes that. It does, although the market was kind of like a bit of a shrug. If you knew it was going to be here. And I wonder if finally one of the things you can look forward to if you get a resolution, the straight reopens, if it's all about, okay, let's rebuild the supply chain and supplies, then what you can do is at least have the other side of that debate

for looking through it and saying disinflation should re-engage again. Yeah, I mean, I know that's the hope. But we had inflationary impulse in the second half of last year, even as the Fed was cutting rates. And we were actually talking about the breadth of inflation even before the Iran conflict. The one thing I do worry about is that people think, okay, if we can just get oil flowing through the straight, everything is clear. But we all know we've got disruption to natural gas. This massive disruption to chemicals and the rundown in inventories has huge impact for consumer goods. Like 95% of manufactured goods require some chemicals.

and every company that we talk to says we're at or close to the bottom of our inventory, and the prospect for restocking in the near term, even if we were to get some flow, is quite limited. So I think people are underappreciating how long this inflation tale will be, and that this really, like, frankly, underscores our continued overweight in the tech space, which are less sensitive to some of these energy input costs. It's uncomfortable. It's the sector for all seasons, then. I guess so.

Doesn't that make you just inherently uncomfortable? Just say tech is defense, tech is growth, tech is, I mean, it's the everything trade. That's right. And if you don't have a tech strategy, then you are going to be sold off by the market. I'll tell you one of the risks that we talk a lot about, though, is that because there's so much investment in the space, we may reach kind of the physical limits of some of the AI and technology CAPEX this year, whether it's kind of natural resources or the build out of the data centers or the power grid or all of the above, perhaps regulations on some of the, um,

AI and tech spend, this may be a source for disappointment. It's not our base case, but we're aware of it because that could take some steam off the trade. Yeah, the bottlenecks kick in. And who knows if long term, that's good. But in the immediate term, it's going to interrupt those growth rates. Yeah. People have to extend out the revenue expectations. Maybe it's not in the fourth quarter of this year, but it's further out. So we're watching that closely. And then the other thing I'd say we're watching really closely is if this expectation of higher inflation continues to percolate and permeate around the market, then we'll get more. expectation for Fed tightening bias, and that could have an implication on valuation.

For sure. Kate, great to talk to you. Thanks so much. Kate Moore. All right, American Eagle earnings are out. Gabrielle von Rouge has the numbers. Gabby. American Eagle reporting Q1 earnings per share of 14 cents on revenue of $1.20 billion. That's a beat on the top and bottom lines, but comps were a different story. Comparable sales at American Eagle's namesake banner fell 2%, while analysts were expecting comps to grow three percent. percent. CEO Jay Schontenstein said in a press release, the company is moving to, quote, re-ignite the women's business as a result and strengthen product execution. Now, he did point out consumer uncertainty, but did say he's confident in the brand's ability to navigate those

headwinds. Now, it's also important to note the Miss at American Eagle came after the retailer's latest campaign with actress Sidney-Sweeney. Once again, though, it wasn't a major sales driver across the business sales were up 10%, but like we've seen for the past several quarters, Mike, that was driven by Airy, American Eagles Intimates brand. During the quarter, Comps at Airy soared 25%. Gabby, thanks. Gabrielle Fon Rouge. Octa earnings are out as well. The stock is moving slightly higher. earnings of 91 cents this year, six cents better than expected. Also beating on revenue. Subscription revenue margins and cash flow also topping expectations. As far as guidance, We're not comparing the numbers to estimates quite yet because of a potential item.

As soon as we clear that up, we'll let you know right now the shares are down by about a half a percent. Coming up, Axta CEO, Talat McKinnon will break down the results in an exclusive interview. Stay tuned. All right, oil prices, pulling back a bit after those reports of a possible ceasefire extension between the U.S. and Iran, both WTI and Brent hitting their lowest levels since April, but oil, not the only commodity seeing unsteadiness. Gold is pacing for its third straight monthly loss. its first three-month losing streak since October 2022, and silver also on a downtrend, pacing for its third straight weekly loss.

Joining us now is Don Ströven. He is co-head of Goldman Sachs Global Commodities Research. Don, it's great to have you here. It seems like, based on, for example, your base case outlook for Brent crude prices, right around these levels next month and also several months down the road, I suppose you feel as if a lot of the reopening or ceasefire hopes are, are largely priced in at this point? Yeah, I think that the risk premium has come down very significantly,

essentially since the ceasefire, as market participants have reduced their perception, their probability of the conflict re-escalating and of the conflict leading again to damage to energy infrastructure. The big question at this point is, you know, when do we see a recovery in flows? Is it a full recovery? How quick will it be?

but I do think that much of the risk premium at this point has come out because inventories continue to come down at a pretty rapid pace as today's Department of Energy inventory's data show. Don, there's a narrative out there that oil would remain higher for longer even after the straight reopens, even once oil flows to the strait as it did pre-war, because there's going to be a desire for countries to develop their own SPRs or to refill their reserves. How much of that do you think is true? Yeah, that's correct. I mean, we forecast brand prices to average $90 per barrel in the fourth quarter. That's about $30 higher than our forecast before the work. The main region is really the very large amount of inventory depletion, as at this point, about 1.3, 1.4 billion barrels of lost supply from the Middle East is pretty much baked in. That is the key reason, lower commercial inventories. On top of that,

To your point, once flows have normalized, we do think that governments in the US, in China, and other OECD and non-OECD countries will stockpile not only to deplete currently low inventory levels and strategic reserves, but likely also to target higher equilibrium future levels for SPRs. And in some scenario analysis we did, that could be worth, you know, one, up to one and a half million barrels per day. of demand for oil from a stockpiling perspective. And so you could have an oversupply market with supply greater than demand, but with much of that oversupply, ultimately being absorbed by government purchases. Don, has there been as any demand destruction that you think will actually be semi-permanent or durable? In other words, is it catalyzed further switching away from fossil fuels in a way that you think is going to matter for longer-term demand estimates? I think the big reason why oil prices are not higher, despite a longer than expected closure of the Strait of Ormuz, is a reduction in risk we discussed and higher than expected demand destruction.

One striking data point is that oil retail sales are down year over year by 22% in China, in April, and 14% in France. And I think one of the reasons oil sales seem to be declined in pretty significantly response to a higher prices is that there is more flexibility in the system with the energy transition. For instance, we saw a rise in EV charging volumes during the China holiday travel season of almost 60% year-over-year. If you analyze EV sales data, you see a big pickup in the share of car sales that are EVs in places like China. So while we expect most of the weakness in oil demand that I currently estimate at around

5 million barrels per day or so to recover. That's what we have seen in past supply different price spikes. One prices moderate. Most of the demand comes back. But at the margin, I think this will incentivize households companies to focus on security of energy supply. And at the margin may accelerate the shift to energy sources that you're less reliant on from an import perspective, including renewables, EVs, but probably also coal for some of the emerging markets. Fascinating. Really great detail. Don, really appreciate your time today. Thank you. Thanks. MongoDB earnings are out and the stock has been on a wild ride in after I was trading. Software

company reporting EPS of $1.32 a share beating estimates of $118 revenue coming in at $688 million versus expectations of $668 thanks to strong subscription sales. MongoDB also issuing better than expected second quarter guidance on both the top and the bottom lines. The stock began lower in reaction now up over more than 12 percent. moment. Coming up, we'll look at some of the retail names making big moves today following their results. And we've got a couple more reports we are waiting for numbers from Gap and Costco. We'll get you those right after this break. You're watching closing bell overtime. Live in the NASDAQ market sector. Gap's off dropping about 13% right now on earnings. Gabby Fram Rouge has the

numbers. Gabrielle. Yeah, so Gap reporting mixed Q1 results. It saw adjusted earnings of 38 cents per share beating expectations while revenue of 3.5 billion fell short. Guidance is also a mixed picture. The company cut its full-year sales guide and is now expecting revenue to grow between 1% and 2%. I spoke with GAAP's CEO Richard Dixon, and he attributed the cut to declines at Old Navy, the retailer's biggest brand. He told me Old Navy Spring and summer assortments missed with shoppers, especially dresses and swimsuits. However, he said he's confident this isn't related to the macro because that same shopper spent elsewhere at the brand. He told me, quote, it's not a consumer issue and we're winning with all-income cohorts.

Now, on EPS, GAP raised its guidance and is now expecting adjusted EPS to be between $2.30 and $2.40. It's largely beating expectations. And the company is also expecting an $80 million tariff benefit. But CFO Katrina O'Connell told me that raise is not related to that. It's more about taxes and interest income. Back to you. All right, Gabby, thanks. Gabrielle Fong Rouge. And do not miss Jim Kramer's exclusive interview with Gap CEO. That's coming up top of the hour, 6 p.m. on mad money. I like when they say it's not it's not you. It's us. I give them credit. They can fix that, right? You can't fix the macro. I mean, so often a retailer, especially a fashion chain, is going to say, oh, macro, pressure, lower-end consumer.

And in this case, they said fashion was off, I guess. Well, Costco earnings are out as well. Brandon Gomez has those numbers. Brandon. Hey, Mike. Yeah, another consumer check. Stock not moving much right now, pretty much on the flat line. EPS in line with expectations.

Revenue was a beat, $70.53 billion compared to the $69.8 billion that was expected. Accom sales were up 9.8% X gas and currency. They were up 6.6. Digital sales, interestingly, up 21%. Now, there's been some conversation about who is leading online sales, demographically, younger, less likely to renew memberships, which has been an issue for the company. We'll listen in on the call for any additional consumer commentary and see how they play this out. Brandon, thanks. Brandon Gomez. Anthropic announcing a new funding round today that puts it closer to a trillion-dollar valuation. and Clips's rival Open AI. Kate Rooney's got the details here. Kate. Hey, Melissa, yeah. So this was a $65 billion round in private markets putting Anthropics valuation now at $965 billion.

That does pass rival Open AI, which until now had been the most valuable private AI company. It was around $850 billion. This for Anthropic is a series H round. It was led by Altimiter, Sequoia, Dragone, or another venture capital investors. Anthropics' CFO today, Krishna Rao, saying that the funding, will help serve what he called historic demand that they're seeing. The main source of that demand is from Claude Cod Code. That's Anthropics Buzzy AI Coding Assistant.

The company, for the first time, also announcing its annual revenue run rate. That is now $47 billion. It's up from $30 billion when you look at the run rate earlier in the year. And then if you look at annual revenue, that was about $10 billion just last year. The company has been on a deal spree lately to try to get more compute to keep up with some of this growth. Recently partnering with Amazon. They teamed up with Google. there was the XAI and SpaceX deal for more capacity.

It does also come as Anthropic and Open AI, get ready to go public. Open AI, we've reported, could go public as soon as September. Anthropic, from what I'm hearing, has been ready, getting ready to go, to be ready, rather for an IPO, kind of setting the table, talking to lawyers and bankers, but no timeline yet. So Anthropic looks to be second behind opening I in terms of IPOs. It's fascinating, although, you know, even at the new valuation, Kate, and with that, annual revenue run rate, it's like 20 times sales, presuming those sales are even going to grow well beyond this by the time they come public. That's low relative to SpaceX, certainly, and maybe

even open. I am wondering, and not to get into the weeds, but when they say this is our annual revenue run rate, over what period are they saying that? Are they saying sales in the last month annualized to that level, or is it the last week? Yes. So it's the last 28 days, Mike. So they look at their commercial deals, they look at the last 28 days, and they annualize that over 12 or 13 months, and that's how they come up with that revenue run rate. So it's meant to sort of reflect growth, the current state of things we heard from Dario Amade at a conference a couple weeks ago saying the growth in the beginning of the year was 80X. Not sure if he was talking about revenue or some of the coding growth, but they've seen explosive growth. The thing with that

number, as you mentioned, it is a snapshot in time. It's not certain that that's going to continue, although with what we've seen lately, it suggests that this company is growing at a pretty rapid clip, but we'll see if they get there at the end of this year. It's rolling four-week sales times 13. I mean, that's basically. Yeah, pretty much. They're annualizing it. But nonetheless, impressive no matter how it's calculated.

Yeah, exactly. Okay, thank you. Exactly. Shares of micron are up nearly 80% over the past month, and it's not alone, as other chip stocks have also been scorching hot lately. Does what go up that fast have to come back down to Earth? Well, we'll see what history tells us about that next on overtime. Bitcoin today falling to its lowest level in about,

six weeks, right around 73,000. Bitcoin ETFs have now seen eight straight days of outflows. According to CoinDesk, Black Rock's Ibit Fund, had its second worst outflow ever yesterday, more than a half a billion dollars in net outflows, while Bitcoin is seeing outflows. Semis, of course, are seeing inflows, which we have seen time and time again here in the session. Massive accelerating inflow. So here are the instances when the semiconductor sector has had a 30-day rally of at least 45%. It's only happened three times prior to this latest month here. As you see, it was a period ending in 1998, 101, one in late 2002. This is according to Ned Davis Research. So this is the moment at which they all hit that 45% 30-day rally mark and what happened afterward. Obviously 2001, it was just

a bare market rally. That was right in the midst of the tech bust after the boom in 2000. Now, 2002, obviously it ended up nicely higher one year later, but it did have a period of chopping around a little bit lower. And then 98, that gave way to the final burst higher in the tech bubble. In every case, however, they all kind of cooled off, right? I mean, it did not keep up that pace of gain for a while, at least over the next several months. You shouldn't have expected too much more to the upside.

I guess the caution here is, by definition, it's rare and a tiny sample size, so we don't know what's going to happen. You can't draw any probability calculations out of three instances of rallies. I would advise against it, but it's interesting to know. It is so fascinating. Yes. All right. Tie now for a CNBC News update with Angelica People.

Angelica. Hey, Melissa. Disney Today filed early license renewal request with the FCC for eight ABC stations, but called the request unlawful. Last month, FCC Chairman Brendan Carr ordered the early license renewal, saying that it was related to Disney's DEI policy, but came in the wake of the president's repeated calls for the company to fire the late-night host, Jimmy Kimmel. In its filing, Disney writes that the true purpose of the order is to suppress speech.

And Major League Baseball owners today formally proposed a salary cap to the Players Union. It's a system that the union has vowed never to accept, and the last effort to implement one back in 1994, well, that led to a nearly eight-month strike in the cancellation of the World Series for the first time in a century. The union's current five-year deal expires in December. And the Postal Service today suspended most non-essential spending as it faces a mounting cash crisis. According to an internal memo, the cutbacks in travel, office supplies, outside consultants, and other measures are being made to protect core operations amid a severe financial crisis. Certainly one that everyone is probably watching closely, guys. Back over to you.

All right, Angelica, thank you, Angelica Peebles. Coming up, we'll get you caught up on the stocks making moves in the after-hour recession, including Octa, which, which is up that 5% right now and back the strong results. The company's CEO will join us on the other side of this quick break. Welcome back to closing bell overtime live from the NASDAQ market site. Record closes for all the market averages. The Dow up just 24 points. The S&P 500 gained half a percent on the day.

The NASDAQ higher by nearly a percent. Now let's turn to some of the after-hours move. We're starting with Dell, a big gain of earnings of $486 per share, much better than the estimate of $294. revenue also a big beep. And the company raising guidance its second quarter earnings range is 480 per share at the midpoint. The current estimate is $298. The company seeing revenue in the range of $44 to $45 billion that compares to $35 billion analysts are expecting. American Eagle and Gat both down big. Gat missing on revenue, American Eagle, beating on top line

sales, but the same store comps came in short of the expectation. Sentinel 1, another big after-hours declineer. First quarter earnings of four cents a share beat the estimate of two cents. Revenue was right in line, but the company's guidance dragging on the stock. It is now down just about 17 percent. Second quarter forecast for earnings and revenue, both slightly below the current expectation. The company also cutting 8 percent of its workforce. It is amazing that we don't even flinch at double digit percent moves in the after. I mean, I feel like this is, it's not normal. It's a bit of an all or nothing reaction for sure, very binary. And, Because, I mean, I guess the disruption trade can cut both ways.

And, you know, there's a lot of sensitivity around retail. Those stocks bounced hard when oil came off. And now we have to see it to fundamentals. Back it up. Speaking of movers, let's take a look at Octa. That stock is also moving after ours up 5%. The company beating on the top of the bottom lines, reporting better than expected subscription revenue guidance for revenue and EPS coming in line with analysts' estimates.

Joining us now in an exclusive interview. Before the earnings call is Octa co-founder, Chair and CEO, Todd McInaninan. Todd, great to have you with us. Great to be here. Thanks for having me. Walk us through the environment in the quarter. I mean, there had been a narrative in place that AI would displace security, displace some of the need for security. How much in terms of what you sell?

We're seeing quite the opposite. Yeah, exactly. I mean, you have AI agent security. So walk us through. I think just broadly, we're seeing broad strength across the entire product portfolio. identity infrastructure, identity, security, workforce identity, customer identity. I think customer, it is a volatile time. They're dealing with a lot of technology news and PR announcements and hype and AI and on and on.

And they're turning to trusted vendors, trusted infrastructure providers that have proven over long periods of time. We can deliver highly reliable, highly secure systems, predictably implemented. It was just a solid performance across the board for ACTA. This idea, Todd, of treating agents, AI agents as individuals that need to obviously be verified, as you suggest here, is that something that will be somewhat standardized? Are you just kind of going to your customers and saying, look, you ought to do it using our products, or is there just going to be some other way that we decide there's a protocol for this? Let me set the stage for you what's happening in every large company, from Dell and Fed. MedX and every large company is figuring out how they can take all this AI innovation and deploy this fleet of agents to make their people more productive, make their customer experiences better,

and make their environment more automated. And to do that, they have to put a lot of things together. And every vendor is coming at them with agenic solutions and innovation, the foundation model, startups, traditional vendors, Salesforce and ServiceNow. and what they all are saying and what everyone knows is that they're going to get agents from many, many different companies. So they're going to have to

know where their agents are and where they're coming from. And they're going to have to treat them as first-class identities. They also know that they're going to have to connect their agents to various resources. Agents are only as powerful as the systems they are connected to. If you want to use Claude Code from Anthropic,

it has to be connected to your source code system. It has to be connected to your database. of software vulnerabilities and software enhancements. And so what our products do is they tell customers where their agents are, what they can connect to and help them connect securely, and then what can those agents do. So this is a common thing across every customer we talk to that have to answer these three questions.

And it's unclear how to do that. And by using our tried and true identity technologies, we can give them a blueprint and help them execute on that. And that's what's driving these results. Todd, when it comes to cybersecurity, they always say you're only, you know, a company is only secure as the weakest link. So as this AI build out happens so quickly and there is this rush to deploy agents, in your view, just sort of more broadly, what is the weakest link out there right now? Well, identity is very important and that's why we're so well positioned. It goes back to those three questions.

First of all, where are the agents? If you're going to secure millions and millions of agents to help your people and automate your company, you have to know where they are. You have to know which ones are coming from Salesforce, which ones are coming from Microsoft, which ones you built yourself. So we allow customers to have that visibility. Secondly, you have to know what they can connect to. Everyone has to, the first wave of agents and the first wave of co-pilots, they weren't connected to anything.

So they couldn't do that much. They could answer some questions based on web data, but now the wave is that they're being connected to every system. And the way to do that securely is you have to manage them as first-class identities. And that's what we're helping our customers do. In addition to what you need to do to try and track the agents, as you describe it, what about on a defensive level, have you had to sort of rethink or revamp any of the services based on, you know, some of the AI-driven threats out there?

Yeah. So one of the things we've done that's been really well received is we published this industry blueprint on how the industry needs to redefine agentic security. Because just like every part of cyber, it's going to take. take many solutions combined together in a secure fabric of solutions to help this be more secure. So this blueprint defines how the different pieces fit together, from identity controls like we've talked about, to things like prompt injection and malicious control of agents and soft software patching vulnerabilities, how it all fits together in this new ecosystem. Because make no mistake,

we're building, the industry is building this new layer of technology that has tremendous potential, but it has to be built together in this systematic way to make sure it can reach that potential while also being secure and reliable. Really appreciate your coming on before your call, Todd, and filling us in. Thanks very much. Todd McKinnon. Thanks for having me. From Octa. Two more Fed governors, sounding the alarm on inflation.

Up next, we'll discuss whether a rate hike by the Fed could soon become a reality. Closing bell overtime. We'll be right back. Welcome back to overtime. Today's PCE report showing prices up 3.8 percent from year ago. It's the hottest since 2023. And this week, more Fed officials are raising the flag about the upside risk to inflation. Governor Lisa Cook saying she's prepared to raise rates if inflation doesn't cool. And Minneapolis Fed President Neil Kachari saying inflation risk now outweighs job risk. With us now is Seth Carpenter, Morgan Stanley, Global Chief Economist and Head of Macro Research. Seth, good to see you. It's great to be here. Thanks for having me on.

I mean, look, I guess we're used to economies that are sending up mixed messages. Right now, it's a fascinating one, because you have one, you know, the KAPEX story is just absolutely full steam ahead. It's driving a lot of the macro. Consumers seem a little bit stuck with higher prices and stagnant real incomes. Where does that bring you in terms of what the prevailing path is for the economy? I mean, I think you're right that we are used to some mixed messages in general. I would say right now there are in sub stories and sub-narratives that are going in opposite directions. That's hard.

In terms of underlying inflation, underlying inflation trends, We've been kind of constructive and optimistic. Tariffs clearly pushed up inflation, especially for core consumer goods. 70 basis points over the rest of this year, that's got to be pushing things in the right direction. But now oil prices have gone up so much. If you look at history, it says oil prices show through to headline inflation, not so much to core. And so there, if you're trying to forecast where core inflation is going, you might feel kind of relaxed. However, these guests in the news flow has been back and forth.

back and forth. And so that makes it super tricky. Layer on top of that, it has been over five years that inflation's been above the Fed's 2% target. So at what point do consumers, at what point do businesses change their psychology about which price increases to make, which price increases to accept if you're the consumer? I think it's that whole set, that array of different narratives at the same time that makes this a particularly challenging environment. So do you think that the Fed will feel, and I guess I'm speaking as if it were a one entity, and it's really many individuals, will feel the need to sort of make a symbolic stand against inflation at this point, given how long it's remained above target? I mean, I think that's really part of the debate that's going on now, but it's funny that you said, will it be a single view or is it going to be a view? I remember when I worked at the Fed, one of my bosses would joke that the FOMC are 19 people who can't agree on the color of an orange.

So I think each of them will have their own views and how it plays out. And there's going to be a healthy debate. We saw at the last meeting three of the voting members dissented against the statement because they didn't want to provide any forward guidance that indicated a predilection for a rate cut. My read of the minutes from the last meeting, the current communication coming out of policymakers suggest that there's a lot of support for that view. Let's not be hasty. Let's not lean toward rate cuts yet.

I think they are all very willing to wait and see how the data play out over time. And are there risks to that? I mean, does the economy seem to be calling out for rate cuts in any respect? There has been some firming in the labor market data. I know there is this case out there that there are parts of the economy that are sensitive to short-term rates going down, maybe getting longer-term rates down that are kind of being left behind. No question. So the economy is definitely not homogeneous, right? There are definitely differences across the sectors. But the labor market, clearly critical to the momentum of the economy, hiring came down a lot last year as businesses were trying to, you know,

manage their costs. Tariffs drove up these costs, and you can't control that. But what you can control are your labor costs. And so businesses pulled back a lot on hiring. That pullback seems to have bottomed out. Stabilizing, last couple of months of data, if we can extrapolate, says that maybe that's firming. And so I'm not sure that the macro data scream out in any way for,

a rate cut. Business investment and the aggregate looks pretty healthy, but it's so skewed right now towards AI-driven CAP-X that you don't want to extrapolate too much. Our baseline view is the momentum continues, it spreads out, it broadens out across the economy. But screaming out for a rate cut, I don't think so. You've only talked about rate cuts, Seth.

Not a mention of a hike. Are the markets being too, I don't know, thinking too much about a hike, putting too much weight into that possibility? So I don't think they're thinking too much about this, This is one thing that is absolutely critical for investors to do is to think about all the possible scenarios and try to come up with some sort of probability weighted set of outcomes. I might not be inclined to put quite so much probability, but there's no sense in which the market is just wrong about this. If we don't get much moderation and inflation, and I think that's clearly possible. And if growth doesn't take a bit of a step down because of the higher energy prices, if we keep going along at two and a half to three percent in growth and we stay at,

3% or higher inflation, then I think the Fed really does have to consider raising interest rates again. Last year, they cut interest rates because they were taking out insurance against a weaker downside. That risk has clearly passed. We heard from some policymakers that the risks are shifting, and now they're starting to worry more about inflation. Seth, thank you so much. Thanks for having you. Good to talk to you, Seth Carpenter. More overtime. Coming straight ahead. Question for tomorrow. Does Dell have coattails? We're going to get this big gain in Dell. We'll see if that matters or if there's a sell of the news.

for the broader sector, the AI hardware sector. That's going to do it for overtime today. Fast money starts right after this.