Closing Bell - Closing Bell Overtime: Stocks Battered as Geopolitics, Rising Energy Prices Hit Investors 3/6/26

Episode Date: March 6, 2026

Markets react to fast moving developments in Washington and across asset classes: Adam Crisafulli of Vital Knowledge and Kevin Gordon of Charles Schwab assess the broader market backdrop and debate how investors should position amid policy uncertainty and macro crosscurrents. More tremors in private credit with Mark Pinto of Moody’s Ratings. Jim Paulsen outlines what the Federal Reserve’s next steps could be as geopolitical volatility and higher energy prices complicate the equation. Jackson Ader of KeyBanc analyzes bellwether Oracle ahead of its earnings next week. Our Sharon Epperson reports on rising 401(k) withdrawals and what increasing retirement stress may signal about the health of the consumer and the broader economy. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing an end to the trading day at the NYSC, the next seat, ringing the closing bell at the NASDAQ. Plug power doing the honors. Welcome the closing bell overtime. We're live from Studio B at the NASDAQ market site. I'm Melissa Lee, along with Mike Santoli. Sox moving lower once again today following a big spike in oil prices. And the president saying he wants an unconditional surrender from Iran. The Dow about 500 points down, had been down nearly 2% in earlier trading.

The SBB off 1.3%. The NASAC down percent and a half. The Russell 2000, the worst performance. or its worst week since August. Let's dive into all the action. PIPA has the numbers on the big moves in oil. Rick is watching the volatility in the bond market. And Amid Jabbers has the latest headlines out of Washington.

But let's start with Christina Parts of Nevelas here with today's movers. Christina. Yeah, more specifically, the doubt posting the worst week in nearly a year last April, though it clawed back from a nearly 100 or 1,000 point loss earlier today. You talked about the 2% drop. Small caps, as you mentioned, the biggest laggards, worst week since August. And despite an escalating complex, with a run and crude breaking $90 a barrel.

The SMP 500 is still almost 4% from a record high. On the tech side, investors we know rotated out of chips and into software this week. In fact, the biggest weekly gap between the IGV and the SMH on record. You can really see that divergence just of the last week or so. Memory names like Sandus, Micron, among the hardest hit. But Microsoft actually caught a bid as investors treated the recent sell-off within software as a buying opportunity. Palantir, the standout. Up about 15% on the week on the view that the Iranian conflict would be a tail win for its government business.

Marvell, a chip name that makes custom chips for Amazon, also hired today on a strong earnings guide and a potential S&P 500 inclusion, traders trying to get ahead of the index rebalancing demand. And then you've got Robin Hood launching its first publicly traded venture fund, ticker RVI. You can see we'll bring that up in just a second, giving retail investors access to private companies like Databricks, for example. And then hard pivot from Tech 2 retail gap shares, closing down 14% after an earnings miss. The company pointing to that historic winter storm, which forced roughly 800 temporary store closures back in January. You can see a week to date down about 17% guys. All right, Christina, thanks. Christina Parts and Neveless.

Mike, I don't know. If you started the day and you said, okay, we're going to have WTI and Brent Crude above 90, and we're going to have a jobs report that wasn't great. That's right. Would you think the mark would end here or lower? Most likely not. And even the semiconductors actually had a late-day sell-off, and that did weigh on the indexes. So market continues to kind of pull the rabbit out of the hat, down 2% for the week.

It's definitely relying on trying to localize the damage in the direct sites of where oil matters. So you have airlines down 15% on the week. Retail down 4.5%. Not a joke. Equal weight, S&P, also down a lot more. So wherever there was air underneath an index or stock price, it got taken out. non-U.S. stocks down 7%. So in other words, the stuff that had been performing and where people felt there was more profits to be taken, that said, I agree that the market continues to kind of stay in position for upside risk. Exactly. For this idea that you could get lucky, you'll get a

quick de-escalation. I think people are coalescing around two to three weeks is when you have to get something resolved and have oil prices kind of revert lower before you really have to think about a swing in the macro environment. Yeah. I was surprised. given over the weekend. Yes, you could have that off-ramp. President Trump could just say, okay, we've achieved what we want to achieve and we're out, which is unlikely, but it could happen. But then you could also have a strike on infrastructure. Yeah, sure. One strike on infrastructure, and I think the game changes on Monday. No doubt. And look, people are getting hedged up, too. The volatility index went out at 28 plus.

That's pretty much the highs for this move. So it's clearly we have to sort of tense up ahead of what we don't know. Let's turn to the oil market. Sub-UTI posting its best week on record up more than 35 percent. Pippa Stevens. This is more on this. Pippa. Hey, Melissa, the Debtai's first settle above 90 in two and a half years and best week going back to 1983 when the contract started trading. This after Qatar's energy minister told the F.T that all Gulf exporters could shut in production within days, sending oil to $150 per barrel. There's now 76 million barrels of oil in the Gulf with nowhere to go. That's according to J.P. Morgan, which said the market is, quote, shifting from pricing pure geopolitical risk to grappling with tangible operational disruption. The Brent WTI spread narrowing today with the gun capital, Jean Kildoff, attributing it to Brent getting a stranded asset discount, while WTI gets an availability premium. And European natural gas jumping more than 60% on the week, we've started to see LNG tankers headed for Europe U-turn and instead sail to Asia. The spread between the two prices is increasing in order to attract more cargo to the Pacific. Finally, gas oil, which is European diesel, hitting the highest level since 2022 and seeing its best best.

week back to 1981, up here 53%. Guys? In terms of offsetting the pain of higher oil prices around the world, PIPA, I mean, India is now allowed to buy some more Russian oil, which had been previously sanctions, so those sanctions lifted a little bit. How much more sort of cushion is there out there in terms of allowing some more supply getting to where it needs to go? Well, clearly the administration is watching this very closely. We also had a couple of hours ago the announcement of that 20 billion reinsurance program to try and get traffic moving through the straight. Then, of course, there is the option to tap the SPR, although thus far officials have said that that is not on the table.

We've also seen moves from Japan suggesting they might tap some of their reserves. China also now putting a limit on exports of petroleum products. So it seems like every country is now trying to see what they can do in order to stem some of the upward price pressure. But I think what's going to be really key next week is we're going to see whether this moves from a logistical issue to more of a structural one right now, given where Brent is trading six months from now. It's clear that the market is saying this is a short-term issue, but the clock is really ticking. And so next week will really be key for whether or not this can be a short-term blip

or a longer-term issue that becomes more structural. Yeah, and with those forward prices, much lower than the spot price, I guess it means not a lot of restart of production is going to be incentivized in the U.S. anytime very soon, most likely, Pippa. Thank you. Let's turn to the bond market, where the 10-year yield saw a significant move higher this week, Santelli is in Chicago with more. Though, Rick, we've been here pretty recently, haven't we?

Yes, we absolutely have. Listen, I'm not diminishing the fact that we had some major U-turn in the Treasury complex because we had such significantly low-yield closes one week ago today. Matter of fact, we had the low close for this move on both pretty much every maturity on the curve. But, of course, that all changed. And for the week, you see twos and tens there. Right now as it sits, two years up about seven. 17 basis points on the week.

A 10 year's up about 19 base points on the week. But here's what's interesting. Look at the right side of that chart. A two year is taking a little bit of a reprieve here. It's actually down and yield up in price. And the 10 year is hovering darn close to unchanged, which means the yield curve steepened. Let's look at the week of the yield curve, 2's 10 spread.

And the reason I bring it up, because we had a weak jobs report. That kind of shook the market and shook it out of its funkier. and what it caused us to do is steepen because two-year note rate slid because it potentially brings the Fed easing back a bit. And that did show up in the probabilities. Not huge, but the probabilities of an ease are a little higher today than they were yesterday. And finally, the dollar index week to date had a great week. That charts for money.

If you look from Friday, it's up about 1.6%. Mike, Melissa, back to you. Rick, thank you, Rick Centelli. Breaking news out of Washington as the president makes some comments on his meeting with the major defense companies this afternoon. Amon Javris has got the details on this one. Amen. Yeah, the president giving us a readout on that meeting on social media.

He says he just wrapped up the meeting with CEOs of a bunch of defense contractors. He says the CEOs of BAE Systems, Boeing, Honeywell Aerospace, L3 Harris, Missile Solutions, Lockheed Martin, North of Grumman, and Raytheon were all in the meeting. And the president says that it went well and that they've agreed to increase production. He says they have agreed to quadruple production of the exquisite class weaponry in that we want to reach as rapidly as possible the highest levels of quantity. Expansion began three months prior to the meeting and plants and production of many of these weapons are already underway. We have virtually unlimited supply of medium and upper grade munitions, which we are using as an example in Iran and recently used in Venezuela. Regardless, however, we have also increased orders at these levels.

The president going on to say that the meeting concluded with another meeting scheduled in two months. States all over the country are bidding for these new plants. So the message here, Melissa, twofold from the president. One is there's no concern about a munitions shortage in Iran, but also that he's spoken to these defense CEOs, and they've agreed to increase production and build new plants here in the United States. That, he said, focused on high end or what he calls exquisite class. munitions. Melissa, back over to you.

You got to wonder if this lines up with the capacity that is available to actually quadruple production, you know, according to a lot of the defense analysts we've spoken to on this show, they say that we're pretty much at capacity right now. Yeah, I mean, that's a question for the CEOs who come out of the meeting. The president says they agreed to that. Do they say they've agreed to that? And do they say that it was plausible to do. Yeah.

Amen, thank you. Amon Javers. What was a Friday for the Bears with spiking oil prices and negative February jobs report and more investor jitters around private credit, but markets holding up better than what many might expect. So are stocks poised to shake off the recent volatility, or is there more trouble ahead? Joining us now here on set is Adam Christopher Fulay, Vital Knowledge founder and Kevin Gordon, head of macro research and strategy at Charles Shawup. Great to see both here on set.

Adam, I'll start it off with you because you've got to wonder, the markets are all thinking that it's going to be a limited conflict that will last two or three weeks and that oil prices will go back down. I mean, very little has to change, deviate from that assumption for the markets to be completely off-sides at this point. Yeah, there's definitely a little bit of complacency in the market. You know, I think, like you said, it was very impressive throughout the week that we saw relatively resilient price action. Obviously, you saw stocks decline, but, you know, even today gets given the volume of negative headlines. But I feel like the range that we've been in now for the last several weeks is going to hold in place. And that's kind of where we're going to be for the next several weeks as we see this geopolitical tension on resolves.

itself. Kevin, one of the things I always go back to is this idea that the last thing that made smart investors feel stupid is the thing they swear they're never going to do again. Is that last April believing that we were in for a prolonged downturn? And all of a sudden, you had this V bottom. And what if you missed it? Well, yeah, I think that, you know, this really gets to the distinction that I've sort of used as a framework for this period over the past year, which, what's front page risk versus bottom line risk? At the end of the day, the S&P 500 as an index is going to care if this flows into earnings and actually hits the growth estimate for the index and for corporate America. So not to say that that's not the case right now. Of course, you can have the knock-on effects

from not just the rise in oil prices, but when you get a spike in gasoline prices that we've already seen, does that affect consumption at a time when the labor market is in a weaker spot than it was in 2022 when we last went through this kind of move? But you have to have all of those sort of fall into place. I think right now the market treating this as sort of a bit of a non-event in terms of the magnitude of the decline, which hasn't been that bad, I think it's right in that sense because it hasn't proven yet to be that much of a hit to growth. But of course, if this extends into several weeks, then I think you have to really change that assumption.

I like the line that you had, I think, in your note, redistributing opportunity over the past week. Is that the kind of market that where you think we're still going to be in next week, where we see some of the year's biggest sector winners pull back the most because it's an opportunity to take some gains off the table? Oh, yeah. It's been, I mean, the character, I think, of the market is year to date, really in a good chunk of the past couple of years. And I think for the note about volatility and a lot of the churn that we haven't seen sort of at the index level, even this week, if you back it up to just year to date prior to the beginning of this week, you'd already seen an amazing amount of churn under the surface.

We've sort of been calling it the smoke on the water, you know, fire under the surface market because the average drawdown for a member in the S&P 500 this year is already 13%. So you've had a lot of corrective activity. It's just happening in certain pockets and it's been isolated at times. Adam, in order for this range to hold, do we have to see more of what we did this week, which is some of the laggard mega-cap stocks did actually find their footing? I was just looking at the net contributors to the S&P on a week-to-date basis, and it's Microsoft, it's Amazon, it's the stuff that hadn't performed. It seems a delicate dance to try and make sure that something big is rallying at all times

while we wait for the smoke to clear. No, definitely, like he said, you know, dispersion is at, you know, multi-year highs. to your point, you're seeing this aggressive rotation beneath the surface. And there definitely are some risks in counting on tech to act as a leadership group. Again, we just saw that right before the market closed, another kind of AI tape bomb, you know, concerning a Stargate data center. And we have another big AI earnings report coming up. So there definitely are some risks around tech.

But I think that you're going to see kind of some of the groups that have led year-to-date stabilize and still contribute to the market, which is why I feel like the range that GSTP has been in will be able to hold. It's interesting that you mentioned that Oracle headline. regarding the Stargate because Oracle stock went down sharply, but then it bounced right back up. And that feels like the kind of market that we're in right now in terms of wanting to see past the worst of it. Yeah. And well, you did see some, you know, some selling in some of the chip names associated with it.

So there's definitely still a lot of anxiety when it comes to AI just from a few months ago where there was kind of uniform optimism. There's a lot more, I think, consternation about pockets of that industry. You know, Kevin, by one way of reading the market, October was kind of the peak in risk appetites. It was when everybody thought it was nothing is, it was nothing but tailwinds, right? And you had the big peak and the AI names and all the rest of it. Since then, we first got to today's S&P level like five months ago, early October. Because earnings estimates have kept going up, the P multiple is like gone from 23 to 21. So I guess there's a way to say, okay, the market's just kind of rebalancing here as the fundamentals catch up.

And I guess, though, that requires that all we've been really worried about here is the war. and energy and not financial stocks, you know, slipping and all the rest. I think this is where the index math just works against you if you're a cap-weighted oriented investor. I mean, Com Services Tech and Consumer Discretionary make up 55% of the S&P 500's market cap. So if you don't have those in a leadership position, you're not going to have an index that's rallying. You're going to get the result that you've had over the past five to six months, which

just this really aggressive chop under the surface. I mean, it has been a lot better. And I actually think it hasn't been sort of this coincidence that the rest of the market has done relatively well, of course, up until this week. But even if you look at some of the economic data, some of the turning points in the PMIs so far this year, the fact that we have started to see a stabilization in labor. I know February was a big miss, but average that over the past four to five months. And it's still relatively stable, especially in the private workforce. So to me, it's not a coincidence that a lot of those components of the market have been working well. But the index math just works against you in that sense, especially if you're more exposed to a cap-weighted index versus something that's equal-weighted in nature.

In terms of what we've seen really bounce. I'm wondering, Adam, if you think once this war is, let's just say, magic wand, wars over next week. Do we still see IGV go higher? Do we still see what was left for dead? And maybe the trends had started prior to any sort of attack on Saturday. but do we see that action continue or do we go back to the playbook from before? I think some of the soft-door names that have been completely washed out have a little bit further upside to go. You had a decent earning season from that group.

The January-end earnings were definitely, I think, better than feared. You have some very aggressive buybacks in place. Some of the companies are buying back a pretty healthy chunk of their stock. And I think you've seen some of the announcements from the AI startups have been a little bit more kind of conciliatory cooperative versus disruptive and displacing. And I think that's helping sentiment as well. So there still is some technical tailwinds for that group. I don't know.

It sounds like you also just described the big banks. Great earnings. They have buybacks, and they haven't been able to get out of their own way. So we have to see if, you know, if that's predictive of anything. But software doesn't have the private credit overhead. No, without a doubt. Luckily. Adam and Kevin, thank you for coming.

Nice to see you. Coming up, we'll discuss whether investor fears from the conflict with Iran are exceeding the reality. And if so, does that mean the market could soon spring back into rally mode? And a perfect storm for private credit. That's what our next guest calls this current environment. and find out if he thinks we're on the verge of a full-blown credit crisis. You're watching closing bell overtime live from the NASDAQ market site. Welcome back. Financials among the worst performers today down a little more than one and a half percent.

All the sector ETSs were lower with the KBE moving below its 200-day moving average for the first time since November. For the week, interactive brokers, State Street, Truist, and Goldman Sachs were among the worst performers. Well, sticking with financials, private credit exposed names also with big losses. BlackRock and Jeffrey seeing the biggest drops. BlackRock falling after it limited redemptions in a private credit fund due to a surge in outflows. So how concerned should investors be about the credit market? Joining us now is Mark Pinto. He is the global head of private credit at Moody's.

Mark, it's great to have you. So you say it's a perfect storm in the sense of what is driving this instinct for investors to pull money out of private credit, but it's not a credit crisis. So explain exactly where this friction is coming from. Yeah, not at this stage. It's not a credit crisis. It's really more of a liquidity crisis. And the perfect storm is, in effect, related to sector concentrations, dividend cuts, additional or elevated redemptions, and then against some of the macroeconomic backdrop you've just been talking about. So because the private credit funds have loved lending to software, because a lot of investors rushed into this asset class,

maybe thinking that the funds were a little bit more liquid on a real-time basis than they were. So that's what we're dealing with now. But you don't think that the underlying creditworthiness, the default profile, is getting worse at a rapid rate? Yeah, no, at the current time, we're seeing this really more as a liquidity issue and less as a credit issue. Over time, if a liquidity issue is extended, it can turn into a credit issue. What you're seeing today is a relatively new type of vehicle that private credit lenders began to sell and attract retail investors into. And these vehicles, though, are illiquid, are filled with illiquid assets. And I think they were sold as semi-liquid funds.

And semi-liquid is a very fuzzy definition, I would say, and not completely accurate for how these types of vehicles work. At what point does this become a concern, Mark? At what point do you think it smells like a crisis? I mean, one thing can, you know, a liquidity crisis can beget the credit crisis to your point. So what point do you say, you know what? Yeah. Here we are. Well, we're going through this redemption phase right now.

And so you've heard about some of the private credit lenders for these perpetual non-traded BDCs raising gates. Effectively, they're not really raising gates. The way investors should be thinking about this is when they invest into these vehicles, they're quoting money into gated community. On a quarterly basis, the board of directors at their discretion can lower gates and allow up to – there's a soft promise of about 5% of the funds' assets can be redeemed by investors. What we've seen is investors seeking to redeem money that was higher than the 5%. And as a result, many of the private credit lenders had said, okay, if there's 7% redemptions, we'll honor those.

If there are 17% redemptions, we'll honor those. So it's created a little bit of confusion. I would say we're at a watershed moment here. Let's call it a test. And I think the private credit lenders have passed this test, not with flying colors, but they've passed. And they've been able to pass it because asset quality has remained quite stable. And the evidence of that is, for example, when Blue Owl sold $1.4 billion of assets within one of their funds, and the investments were sold at par.

In a one-quarter's time from now, we'll go through this again, where people will line up. They will seek to potentially look for new redemptions, more liquidity. And at that point in time, the question is whether, if needed, can these private credit lenders sell again at par. You know, Mark, one of the issues that some have brought up is not so much that, let's say, the software borrowers are in immediate distress, but they do require refinancing not too far out into the future on average. And so maybe we're not going to be able to get off this treadmill where people have concerns

about the software business and then, you know, it creates a little bit more of an issue in some of these portfolios. You absolutely could, but I don't know. stock where it's a very broad. Mark, we've got to leave it there. We're having trouble with your audio. We apologize. Mark Pinto, talking about private credit

and how it's not a credit crisis, but a liquidity crisis. Still, the stocks tell, well, I mean, a different story in terms of the long-term downtrend that we've seen, the sharper downtrend we've seen recently, although we've seen them bounce back. I think part of what the publicly traded stocks tell you is that people are concerned about any asset

raising down the road. Exactly. So, I mean, as an asset class, what we thought was a real growth story, maybe isn't anymore. And the growth was in the retail investor. And that's what Mark was talking about in terms of the misconceptions, wanting the liquidity back, and what is semi-liquid? Exactly. Well, Oracle is the big name on next week's earnings calendar coming up.

We'll discuss if the stock is too cheap to ignore after it's nearly 20% slide this year. And check out shares of day one biopharmaceutical skyrocketing today after agreeing to be acquired by French drug maker Servier for $2.5 billion. to expand its oncology portfolio. That is a 68% premium to yesterday's closing price. Day one makes the only drug approved by the FDA to treat the most common pediatric brain tumor. Welcome back to overtime. One area of getting a boost today, fertilizer stocks, Mosaic, CF Industries, Nutrient, all outperforming today. Analysts pointing out those companies are likely going to benefit from tight supplies and higher prices due to the war with Iran. More than a third

of the raw materials used in fertilizer travel through the strait of hormone. news, CF industry is posting its best week in nearly six years and hitting an all-time high today. And you've got to want, I mean, farmers are paying more. Without a doubt. The food prices. Farmers paying more, plantless acreage, commodity prices go up. And also commodity chemicals had a big run this week as well for the same. A lot of upgrades for Dow Chemical, for instance, apparently between 11 to 15 percent of the global ethylene and polyethylene market are impacted by the war in Iran.

Stuck over there. Yeah. Time now for a CNBC News update with Angelica Peoples. Angelica. And Melissa, thousands are gathering in Chicago today to celebrate the life of civil rights activist Jesse Jackson, who passed away last month at the age of 84. Former presidents Joe Biden, Barack Obama, and Bill Clinton were among the speakers at the service.

Obama praised Jackson's presidential campaigns, saying they helped people take his 2008 run seriously. A judge dismissed several charges against former Michigan football coach Sharon Moore after he agreed to plead no contest to new lesser allegations. was charged with felony home invasion, misdemeanor stalking and breaking and entering following his firing from the University of Michigan. His sentencing is scheduled for April 14th. And residents of British Columbia will change their clocks on Sunday for one final time. The Canadian province is moving permanently to daylight savings time, lining it up with

the Yukon territory, which stopped changing clocks in 2020. Most states in the U.S. will also spring forward in the early hours of Sunday. So don't forget to set your clocks. Back to you. Thanks for the reminder. Angelica, thank you, Angelica peoples. Up next, we'll discuss whether spiking oil prices in a weakening job market could force the Fed's hand on interest rates. Welcome back to closing bell overtime, live from the NASDAQ market site. Stocks ending today in the red, but off their lows. The Russell 2000 was the worst performer off more than 2%.

For the week, the Dow off 2%, the S&P also down 2%. And the NASDAQ was down about 1.2%. It was its worst week since February 12, I assume. Staples and energy eking out some gains today while discretionary and materials were the laggers. The software ETF, IGV, seeing some buying this week up nearly 8%. Samira, Intuit, C3AI, App Lovin, and Crown Strike all up more than 15%. Actually, probably was the worst day since February 12th. The worst day, yeah. Oh, not bad.

The attack on Iran triggered a big rally in oil, raising concerns about the worst. the possible resurgence of inflation. Crutes are passing 90 bucks a barrel for the first time since October 2023, prompting some Fed officials to shift their tone on rate cuts. If the conflict or the war settles quickly and the oil disruption that people are worrying about doesn't transpire and doesn't live for a long time, well, then we'd just see those things come back and we'd be back to a normal place. You don't want to act aggressively when you don't actually know that part. I'm hesitant to react to what's going on in oil until. until we know more. But if anything, it biases me toward even more doveish policy.

I think that's the standard Federal Reserve reaction function. With a new leader, Kevin Warsh, likely to take over the central bank if confirmed by the Senate in May, could rising oil prices complicate his eagerness to cut rates? Joining us now is Paulson Perspectives author Jim Paulson. Jim, great to have you with us. We see what the bond market is thinking about the prospects of inflation. How do you see this playing out and the impact on the Fed's path? You know, Melissa, I just put out a piece earlier this week that looked at real private sector GDP growth.

And eagerly, it's 2.3%, which looks okay on the surface. But if you back out the 11% comprised by new era spending, investment spending, the remaining 89% of the private sector of the economy is growing at 1% in the last four quarters. that is historically recession-like growth for 90% of the economy essentially. And when you put that together with virtually no job creation for the last 12 months and an average duration of unemployment now, as reported this morning, reaching almost 26 weeks a half a year, I'm kind of hard-pressed to see how the Fed can stand pat

and say that there's stability in the job market when it's flatlined and when 90% of the economy is growing basically barely 1%. I do think, you know, that the rise in energy prices could add a little to inflation, but it's also going to be another tax on the 90% of the economy that's not doing very well. And if we're concerned about inflation, the one part of the economy that is doing well, New Era part of the economy, although it's small, it's growing so very well. rapidly, and it is a major disinflationary force. I think the Fed's going to have a lot more pressure, particularly if we get any more bad job numbers, to ease interest rates again and to bring a greater

policy accommodation. So do you see the potential inflation risks brought on by the conflict in Iran, either to be short-lived and or offset by what you call the new era disinflationary impacts? I do mostly. First off, you know, I think energy for the consumer budgets on average is now 2% or 2.5% is all it is. And we'll see how long this lasts. It could certainly pick up the CPI, but it's probably not going to last that long. And quite frankly, you know, when 90% of the private real GDP is growing at 1% and no one's hiring, it's hard to see how we have a runaway inflation problem.

I think the bigger problem in the room is let's try to get the big 90% of the old area economy going again. And I do think that's where the Fed's going to fall by default. Yeah, and I guess, Jim, for as much as the bond market has moved in terms of expectations, we're still talking about most likely a cut or two at some point later this year. I guess from the Fed's perspective, they might say, sure, it looks like the tech capital spending is dominating the net job, the economic growth statistics. However, if that weren't happening, maybe the economy would be drawing that investment somewhere else. And besides that, 4.4% unemployment rate doesn't seem like an emergency, even if you haven't had very much job growth, prime age, labor force

participation, pretty much near the recent highs. So I just wonder if from their perspective, they don't have a whole lot to react to on the growth side yet. Well, I think we're in unprecedented of territory though Mike but you know we have the unemployment rates risen by one full percentage point over the last couple of years during a so-called expansion when in the history of the unemployment rate going back to 1948 it's never risen during an official expansion at all let alone by a full percentage point over that period of time and and I just don't know how long can we go in this country when someone looking for a job can't get one because there is no job creation going on. I think it's just sort of an unacceptable situation, even if the aggregate numbers,

GDP are okay, if there's no hope for a job, I think it's just going to be something that's unacceptable even for the Fed to stand pat on that. And so I just, I don't know, of course, but I think the odds are that they're going to err on the side of trying to revive a big part of the economy that isn't doing well. You know, consumer confidence, have been telling us for the last several years that things aren't that great out here. I know tech's doing well, but it's still a relatively small piece of the overall economy. And most consumers are not feeling like it's doing that well out there. And here we have a president raising taxes with energy prices or with tariffs,

and we have a Fed that says that they could be patient. I just don't think it adds out. Yeah, that's all very fair. Of course, housing is certainly contributing to that poor. consumer confidence as well. Jim, always great to catch up with you. Thank you. Jim Paulson. You bet. Thanks for having me. All right. Up next, Oracle shares are down 21% this year ahead of its earnings report next week. So has the stock gotten cheap enough to buy? We'll discuss that. And as we head to a break, here's a check on some notable names hitting 52-week lows.

They include Blue Owl, ADT, Universal Display, Perigo, and Cody, which hit the lowest level since it went public in 2013. Welcome back to overtime, probably the most close. closely watch relationship in the market has been semiconductors versus software. You've had a somewhat of a reconvergence of these two sectors after the widest ever diverges. This is a five-year chart of the SOXs ETF along with the IGV. And you see just incredibly how much semiconductors had outperformed software. This was the latest software panic when obviously the reports about AI disruption really got to the market. So we've had a comeback, but it doesn't look like a whole lot. I would focus more on the absolute performance, perhaps, of semiconductors compared to the S&P 500,

which is this next chart. That's usually considered to be a pretty important bellwether group to remain somewhat in an uptrend in a leadership position. So far, we're hanging in there. So this is the socks relative to the S&P. And if you just wanted to say, okay, are we on trend or not, still are. So you probably have a little more downside before you'd have to worry that we lost semiconductors the way we've kind of lost financials to some degree, as well as consumer discretionary. But on to the software point and also the overall AI investment story, Oracle reports its Q3 earnings on Tuesday after the bell. The stock has been a laggard. It's still more than 50% off at September peak and trading in a forward P.E of around 21.

So what can we expect next week? And is this a buying opportunity? Let's bring in Jackson Ader, KeyBank Capital Markets analyst, a breakdown. What is that stake for earnings? So, Jackson, this is like a one-stock wall of worry in a way. people worried about the credit, about the balance sheet, about CAPEX. What are we looking for in these numbers to potentially calm some nerves? Mike, thanks for having me again. It's good to be here. I think next week, what we are looking for is to see some execution from Oracle on the ever-important Oracle Cloud Infrastructure Revenue line. Oracle has remaining performance obligations sitting off of its balance sheet waiting to come into revenue.

We would like to start seeing some of that revenue be recognized and show upside in that key metric. There is a report, Jackson, in just the past hour so that Oracle and Open AI are going to halt plans to expand their Avaline, Texas Data Center. What was your reaction? We saw the stock immediately take a hit. It bounced back. But what's your take on that? And how does that impact those RPO's that you're mentioning and just the notion that that was contracted and will not get built? Yeah, Melissa, it was timely, wasn't it?

So, yeah, about an hour ago, there was a report that said the expansion plans that were originally reported last summer are now on hold or I should say. I mean, they're canceling to expand the Abilene, Texas footprint for Oracle and Open AI. The existing contract between the two, the four and a half gigawatts, the $300 billion over many, many years, absolutely still in place. It's just that this particular expansion in Texas is not going to be a part of that contract. So if you're thinking, oh, my goodness, is the Oracle remaining performance obligation number at risk? No, this would have been an expansion of their footprint. the contract is still in place. So it won't impact the RPO number that you mentioned, Melissa.

So we're looking at for a company like Oracle, I mean, just burning cash for a couple of years out and who knows for how long in order for them to get scale in this area. You mentioned the remaining performance obligations. That is, in a sense, cost in the short term for them, right? They have to build the capacity in order to execute on that. What does this company ultimately look like if this is, all goes well in terms of it's operating dynamics. Is it kind of just a landlord? Is it just a massive cloud player like Amazon? What's the destination here? Yeah, it's a good point. So

remaining performance obligation for traditional software companies doesn't really pose much of a risk. It's not like you sign a contract and then you promise to go, you know, build a bunch of software on behalf of the customer, the software is already built. It's really just the passage of time that moves remaining performance obligation onto the income state into revenue. But in this case, you know, with Oracle and with Microsoft and others, we are in the data center business. We are in the business of we sign a contract and now have to go build something. So it does introduce a different dynamic for remaining performance obligation for Oracle relative to its old just software business. So if I think about where we're headed, in the future, Oracle will

really be, I think, a, you know, if all goes well, it'll be a two-headed monster. It will still have its rock-solid software base of enterprise resource planning applications and database software and a bunch of back-office functionality software in applications. And then it will also, again, And like, you know, if we assume all goes well, it will also be call it the fourth or fifth hyperscaler, whoever you want to include in that cohort. But they will absolutely be one of the hyperscalers and in a big way in GPU hyperscalers. And just real quickly, you're running with a $300 price target, so it's a double from here? We do have a $300 price target.

That's right. Yeah, it surpassed 300, not that long ago. But it's been rocky, but yes. Gotcha. All right, Jackson, thank you. Jackson, Ader. Up next, the troubling rate that Americans are rating their 401Ks to help pay for day-to-day expenses amid rising debt levels.

Could that pose a risk to the economy? We'll dive into that when closing bell overtime, live from the NASAC market site returns. Welcome back to overtime. 401Ks are supposed to be used to fund retirement, but more and more Americans are tapping them to pay for expenses now. Sharon Epperson has the detail. Sharon.

Well, Mike, a growing number of Americans are now tapping their 401K using hardship withdrawals. These 401K hardship withdrawals, according to the IRS, are for immediate financial needs. Now, what we're seeing is an increasing in debt loads as well as ongoing affordability pressures that are driving these withdrawals, experts say, and as well as regulatory. changes under the secure 2.0 tax law, which makes it easier to qualify. Vanguard data shows that the share of 401k participants taking out hardship withdraws reached a record high in 2025 at 6%. At retirement provider alight solutions, the percentage of these withdraws nearly doubled to 3.7% in the 12 months ending January 31st, 2026. Fidelity has also seen a small uptake in hardship withdrawals at 2.7%.

percent in the fourth quarter of 2025. Now, while slightly more savers have been taking money out of their accounts, at Fidelity, the average 401k account balance sold double-digit gains last year, and the number of 401k millionaires rose nearly 24 percent in 12 months. You can check out my Money 101 newsletter for alternatives to tapping your 401K, including the best places to stash cash to get stable returns. You can use the QR code right there on the screen or go to CNBC.com. slash money 101. Back to you at the NASDAG. Sharon, what are the kind of pros and cons do you think, or what would an advisor say about trying to get one of these hardship withdrawals or simply borrowing against the 401K balance

where there's kind of a structured repayment plan? Well, definitely they say that it's better to take the 401K loan. Again, that loan is not taxable and you are paying yourself back. But again, you could be paying a significant amount of interest there, but at least it's going back into your 401K. The key is to not stop contributions. And when people take money out either with a loan or a 401K withdrawal, it's because they need to free up cash. So they're likely not making contributions at that time either. And so that they're not getting the dollar costs averaging. They're not getting that long-term growth. So the key is to really figure out what your goals are so that you know if you need money in the short term, if you need money for emergency, it should not be in the stock market and it should not be in your 401k.

There are better places to put cash. A lot of advisors saying they are now telling their clients for the part of their investment portfolio that is in cash, maybe put that in short-term treasury bills or treasury ETFs or a high-yield savings account for some is probably the best place to put an emergency fund somewhere where you can have the liquidity that you need, the access that you need to get to that money when you do have that immediate. and heavy financial need, which is what a hardship withdrawal is for. Yeah, no penalty CD also fits the bill.

Sharon, great to see you. Thank you. Yes, it does. Yes, it does, Melissa. Let's get you set up with next week's trade. On the earnings calendar, Hewlett-Packard Enterprise will report Monday, Oracle and Coles. The highlights Tuesday, Campbell's out on Wednesday, and Adobe, Alta Beauty, Dollar General, Dick Sporting Goods, and Linar will report on Thursday. And on the economic front, we'll get existing home sales. That's on Tuesday.

consumer price index, the big thing on the watch for Wednesday, Thursday brings a producer price index and jobless claims, and the week closes out with the latest GDP report, personal income consumer sentiment, and the Jolt survey. But of course, oil prices are going to be a key determinant. I was going to say, yeah, we are in kind of crisis mode trading, and obviously that's going to be sort of the one variable that drives everything. So, you know, two days of news to get behind the open on Monday. been sort of impressive we were going down 2% in the S&P this week, given everything going on. Well, that does it for overtime. Fast money starts right after this quick break.