Closing Bell - Closing Bell Overtime: Stocks Sell Off Into Close; Nvidia Slams Tech Stocks 3/3/25

Episode Date: March 3, 2025

Jon and Morgan lead a packed hour, covering today's major selling from every angle. A market panel with Wells Fargo's Sameer Samana and iCapital's Anastasia Amoroso to break down the day’s action. Goldman Sachs' Greg Tuorto weighs in on small caps, while former Tesla President Jon McNeill discusses Tesla, tariffs, and EV policy. Later, Wedbush's Dan Ives hits the sharp turn lower in Nvidia and what to do with Apple. Morgan hits a bright spot in the market: European defense stocks. 

Well, that bell marks the end of regulation. Evi Industries ringing the closing bell at the New York Stock Exchange. Appoint doing the honors at the Nasdaq. A sharp sell-off to start the week as tariff fears spook investors with losses accelerating late in the session. A little bit of a bounce at the end after President Trump said tariffs will start tomorrow on Canada and Mexico. That's the scorecard on Wall Street, but winners stay late.

Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brennan. We'll be all over this market sell-off throughout the show. Analyst Dan Ives will join us with his thoughts on NVIDIA's sharp intraday pullback and if there could be more pain ahead for shareholders. Plus, we'll talk about the impact of tariffs on Tesla and the automakers with former Tesla president John McNeil. And we'll look at the big drop for small caps when we're joined by Goldman's small cap portfolio manager.

Let's get straight to these messy markets. This late day sell off after President Trump said tariffs on Canada and Mexico will indeed go into effect at midnight. Joining us as Wells Fargo Investing Institute senior global market strategist Samir Samana and iCapital Chief Investment Strategist Anastasia Amoroso. Guys, welcome. Anastasia, so on the S&P, can we show a six-month chart? Because we're back near, I think, the Friday lows before that big rally. I mean, just the last trading day. Also happens to be near the 2025 lows from mid-January before solid earnings season kicked off with the banks. And also right about near the pre-election highs.

So my question is, with that in mind, it's not like these levels are brand new. What determines the trajectory from here? Right. Well, Don, I think if there's one silver lining about the current setup is that a lot is starting to be priced in. You know, clearly tariffs is a very disruptive thing to most everybody in the markets in various countries. But there's a point to where it becomes priced in. And when we talked about the Mexico tariffs and Canada tariffs and China tariffs first back a month ago, the calculation was that it's somewhere about a 5 percent downside that has to be priced into the market. Maybe it's because of market shrinkage, margin shrinkage that has to take place and also valuation shrinkage as well. But guess what? We are down 5 percent from those 52 week highs.

And we do have, it seems like, certainty of those tariffs going into effect. So with that, the valuations, the levels have been reset. And if you look at the investor sentiment, it is as bearish as we've actually seen it going back to 2022. If we look at the relative strength indicators, I think we're probably going to get hit oversold on a lot of those various stocks. So I do think this is a better setup now. And the bar for upside surprise of any sort is now a lot lower. That sounds like a silver lining with Samir. At the same time, there are growth concerns now that maybe there weren't before. I know you say we believe deregulation and tax cut extensions will help the economy more than targeted tariffs and immigration restrictions will hurt.

That's what you guys are saying at Wells Fargo. But will they help as quickly as they might hurt? Yeah, that's that's the are saying at Wells Fargo, but will they help as quickly as they might hurt? Yeah, that's the key, John, is unfortunately from a sequencing standpoint, and we've said this for a while, the market just has not woken up to the fact that, you know, the Trump administration was going to tackle some of the market negative stuff first, which would include, you know, immigration and was going to include tariffs. And you just saw this game of chicken. And to be fair, you know, President Trump probably played a role in it by reversing the tariffs as quickly as he

did on Colombia and then kicking the can down the road on the ones for Canada and Mexico. So he kind of played a part with respect to the markets, maybe not taking him seriously. But now that we are here and the tariffs are going into effect, I think it's going to last a little while. And look, the market's got a little bit more positive seasonality into, you know, April, but then you kind of hit the summer seasonals, which aren't as great. So I think, you know, you could have a few more months of just sideways chop. And Sage, I want to get into the silver lining a little bit more, because what we have seen is a very defensive tone in the market. We've seen treasury yields come off pretty dramatically here in the last call at week,

week and a half. You've seen real estate, consumer staples, health care utilities, the more defensive sectors in the S&P outperforming. They actually finished in the green today. Are these, and equal weighted S&P, is it better than cap weighted? So we've been talking about the rotation even before we've gotten to this moment with tariffs and growth scare. Are these the places that you invest right now or is this a head fake? No, I think there are places to hide and some of them, which you mentioned, and by the way, completely agree with Samir that, you know, the sequence is everything and tariff threats were going to come before tax cuts. You know, the most likely scenarios, the bars I mentioned, is set lower. So maybe it's the Fed this month. Maybe it's the payrolls report this month. Maybe

that's what kind of provides the markets with some stability. But I do agree that tariff threats are not about to go away. And in fact, they may be with us for quite some time, meaning the cyclical parts of the economy may be suffering for quite some time. And I say that because, Morgan, if we looked at the last instance that we had tariffs and if you look at the manufacturing surveys, they were in this declining trend for about a year. I'm not saying we're going to get that, but let's say it's three or six months. In that case, even if we get a temporary pop in the market, I probably wouldn't step in and buy some of those cyclical sectors because of that precedent that we had before. However, what I would buy is I would look to the domestically oriented parts of the market, not only from the

perspective of revenues, but also from the perspective of your cost of goods sold. What you don't want to be doing right now is importing your input costs from Mexico, Canada, China, and a whole lot of other places. So financials, real estate, healthcare, utilities, those are the sectors that stand out to us, even though they have held up better and arguably they're a little bit more expensive than beaten up tech. Yeah, you bring up a good point. And one of them being the fact that last time we saw tariffs, Samir, tariffs were much more surgically imposed here.

And this is really widespread, pretty blanket across everything, whether you're looking at Canada or Mexico or another 10 percent on China and everything that's coming in across the border, at least right now as it stands as we look to midnight. But you look at global equities as well. We continue to see record highs in places like Europe, and that's in part because of defense spending, which we're going to talk about a little bit more later in the show. But do you look to other parts of the world which have been outperforming since the start of the year and invest there instead right now? So probably not right now, because, I mean, again, it's almost comical, the fact that the market is somehow hiding in the areas that President Trump will

absolutely go after next. So, I mean, I guess if you want to get whacked with all the moles, yeah, by all means, you know, now would be a good time to go to international because that's where he will be moving next. But no, we would not. You know, we would, if anything, be taking the recent strength to pull back on especially emerging markets. The one part of the tariffs that will probably be longest lasting will be the ones on China. And I would argue probably the second longest lasting are probably the ones on Europe. So, no, we would be bringing money home. We would still favor U.S. large caps, but we are warming up to U.S. mid caps. With respect to sectors, you know, I think financials are a pretty domestic story.

I would argue comm services is the part of growth that actually has some reasonable valuations and a good use case for A.I. So I think they'll be OK. Our dark horse picks are probably energy and industrials as those parts of the economy recover into the latter part of the year. But no, this would not be the time to go international. Anastasia, back to sequencing. How long can investors wait for the good news part of this? What do the president and Congress have to deliver on regulation and taxes? Right. Well, by the way, one of the headlines that crossed my phone, at least, is that maybe we are going to roll back some of the stringent regulations on

large cap bank mergers. So I do think that this is all news all at once and some of the new regulation is starting to work its way through the system in the background. I also do know that the House and Senate is absolutely working on the tax cut bill. So I think as we move into the summer, maybe past some of the April deadlines that we have for tariffs, more and more of this focus is actually going to shift to taxes. And so, you know, so that's why it's such a precarious situation for investors is because you don't want to use tariffs as the reason to de-risk your positions massively. You know, but at the same time, it might be too early to step in in size, given that

some of the tariff headwinds are still coming. So what I would do is I would really think about kind of reshifting the core of your portfolio, maybe, you know, if you haven't already, maybe it's too late, but maybe really refocusing on domestic stocks versus some of the internationally exposed tech stocks. And I think it's back to the yield story. You know, one thing that maybe actually puts the bottom under this whole thing is if we see a more dovish Fed and if we actually do end up with a rate cut or two or three as the market is now forecasting. So I think you want to look at some of the higher yielding assets. You want to look at real estate. I also think you may want to look at private

credit as well. All right. A lot to dig into right there. Anastasia Amoroso and Samir Samana, thanks for kicking off the hour with us. With all the major averages finishing lower in the Russell 2000, the worst performer and the Nasdaq composite as well down 2.6 percent. Let's bring in Mike Santoli now for more on this pullback. Mike. Yeah, Morgan, and sort of where it's brought us back to. I remember when prices go down. It also goes back in time. And John was mentioning we're basically into the election day levels, the area that was crossed by that November 6th rally, 2 percent above the 200 day moving average. There's nothing particularly magical about that level, except it is a pretty good intermediate long term trend line. It's kind of the average price

people have transaction at for most of the past year. The other thing I would point out is, you know, if you talk about down 2 percent to the 200 day, this over here, the summertime high before you got the real gut check in mag seven is just under 5700. So that was when growth stocks were finished carrying this market. So, you know, pretty good, you know, six, seven month reset in prices often can be constructive if we're still in a bull market, if things don't fall apart completely in a macroeconomic sense. Take a look at growth versus value, because that's been one of the main dynamics is big growth stocks giving up ground to value. Russell 1000 in both cases. Again, though, you see it kind of goes back and creates this sort of shelf. This is a two year chart. So still long term growth has been advantaged, but you're really faltering in terms of that leadership. Did want to also point out the IPO index ETF has really given up even more ground.

This is also a two-year. It kind of goes back to levels that you'll see right there at the beginning of last year. Everyone's talking about IPO calendar filling up. Hasn't really happened. These, of course, are older IPOs because there haven't been all that many. But they're kind of less, you know, seasoned, more untested companies. And it shows investors risk appetite for taking a chance on them has declined a little bit in this whole general growth scare, guys. How much do the technicals matter here? I mean, BTIG's Jonathan Krinsky put out a note.

It might have been before President Trump confirmed that tariffs were going to move forward. And we saw this leg lower in the market in the afternoon. But, you know, he pointed out the fact that today will be the seventh day in the last eight sessions where the SPX closed below its open. And that they continue to continue to see near term downside risk through 200day moving average, which would be 57.23, and highlights the roles that semis are playing in all of this. So I do wonder how closely we need to be paying attention to some of these levels. Well, once you start getting this sort of downside momentum and you get the intraday sell-offs, it does create the scenario for some kind of crescendo or an accelerant to kind of find exactly where you're going to get to sort

of the high conviction buys. I always say that when the market gets more volatile, volatile, it means the price has to swing and move farther to find buyers and sellers who have conviction to move there. And when the when the sort of news flow and when the outlook is more unsettled, you have to actually see if if those levels might hold. We don't not say we're going to get there, but it's a logical next place to have in your mind as a potential stop. OK, Mike Santoli, see you again in just a little bit. Well, tech stocks getting crushed today with the Nasdaq falling more than two and a half percent. Our Steve Kovac is following two of the big tech losers.

Steve. Yeah, John, that would be Microsoft and Apple. And look, we talk so much about the Canada and Mexico tariffs, but this is also China impact as well. So let's start with Apple. It's closed down about one and a half percent today. This is because of that additional 10 percent of tariffs that President Trump mentioned. This is going to be bring the total up to 20 percent. Now, we know a couple of weeks ago, Trump said he met with Apple CEO Tim Cook, presumably to talk about these tariffs. And last week, last Monday, Apple announced that 500 billion dollar investment in the United States. We'll see if that gives them the tariff relief they wanted. But right now, it looks like it's just going to be broad based and so forth. But

look, analysts said what those first round of tariffs, that 10 percent that went into effect a month ago in China, that would hit earnings by low single digit percentage points. We'll have to see what they say for this run. I'm expecting a lot of analysis to come in tomorrow morning. But now let's go over to Microsoft, which took even worse than Apple, down about two percent close today. Also, that China tariff impact on the last earnings call. I'm going to point to some comments from CFO Amy Hood, who warned that Windows revenue could decline to the low to mid single digits because of what she called, quote, tariff uncertainties. Now, as you know this, John, most PCs are made in China and some PC makers at that first round of China tariffs have already said they're going to need to raise prices. You can also see Dell and HP were off quite a bit as well, guys.

All right. Steve Kovac, thank you. Thanks. Small cap stocks getting crushed in today's sell-off, adding to their underperformance this year. The Russell 2000 touching its lowest level since September of last year, finished down more than 2.8% today. Let's bring in Greg Tuarto, managing director and portfolio manager at Goldman Sachs Asset Management.

Greg, it's good to have you here on set. And that's exactly where I want to start. The fact that small caps have been underperforming. Obviously, we have this tariff news. We've seen the dollar weakened today in the midst of all the trade angst and growth scare concerns for the market as well. Do you buy here? You know, I think you have to. I think you have to start legging into small caps. It's been a number of years of underperformance. I think one of the largest headwinds, especially over the last couple of years, was rates. That's out of the way right now. And I think that that should be turned into a tailwind. The growth scare narrative is something that is, you know, that we have to get through. But I do think it's a buy right here. Why do you

think the rates piece of it now turns into a tailwind? We know the Fed, at least for now, is sitting on its hands. Is it just because the bond market is actually sending yields lower? Yes. And I do think that that point of friction with small caps does tend to kind of hold people back at the index level. There's an old sold saw about small caps that they don't have the best balance sheets. They're exposed to floating rate debt. So the higher the rates are, it does impact their cost of borrowing. It hurts their cost of doing business. So I do think that generally

speaking, it does kind of create a little bit more attention to what the end calculus could be for what the return should be. Help me understand, Greg, why the pros and small caps in the medium term even outweigh the cons. Because I'm thinking of cons, you mentioned higher rates. I'm thinking they've got less scale to absorb costs. Maybe they've got less budget to get into something like AI that could deliver some shorter-term productivity enhancements perhaps. But then they've got more domestic business, I suppose, by and large. So they're going to perhaps be hit by some of these

international effects less. But what else? So I do think you hit some of the big ones. And I think that, you know, it's kind of a commercial for active management because you can stay inside the, you know, kind of color inside the lines of the companies that will be less impacted by some of those tariffs. When we look through our universe, the company, some of the soft lines, retailers, some semiconductor capital equipment companies may be impacted a little bit more from this new wave of tariffs we're seeing. But for the most part, I don't think that it's going to change the business plans that most of these CFOs laid out six months, three months ago. And in addition, if you look through some of that domesticity that you just

mentioned and what we talk about a lot, I still see the consumer as, you know, while they're saving a bit and weather has been tough for some of the restaurants year to date, I do think that there's a good demand picture as you go throughout the rest of the year. But the working class consumer has been strapped. And one wonders, given how big an employer smaller businesses are, if tariffs have an impact on them and then it starts to inflect employment with a working class that's already stretched, what happens? Is that a danger for small caps in the economy? It could be a risk factor. You know, we haven't seen it or heard it from the companies who've just gone through an earning season, a significant amount of earnings.

You're not hearing that there is a, you know, kind of any job cuts out there. As a matter of fact, you know, most of the surveys we see from small cap executives are quite bullish, even through the last few weeks. So I do think that there's no real danger of job loss from the small cap companies. And I do think that if you start to think about the employment picture and, you know, we kind of bring in some of the worries about, you know, kind of federal jobs that are lost, I still think employment is pretty solid. And if people are employed, I do think that they will spend. All right. Still looks good then. Greg, thank you. Greg Tuarto. Well, Okta earnings are out. Seema Modi has those numbers. Seema. Hey, John, this is the security cloud provider that reported better than expected earnings.

The four cent beat on its bottom linevenue coming ahead of the average analyst estimate. And its first quarter guidance was also above Wall Street expectations. RPO, which is a measure of subscription backlog, was a standout. And amid this tough backdrop, worth noting, shares are up nearly 13.5 percent, 14 percent. J.P. Morgan did make the point going into this report that this specific company, and especially given the magnitude of hacks that we've been seeing in recent months, is well positioned in the security market. Stock again higher in overtime. John and Morgan. All right. Seema, thank you.

Coming up, Tesla pulling back after an early bounce attempt as the February weakness carries over into a new month. We will talk about how Tesla and other automakers could get hit by tariffs. And analyst Dan Ives will join us with his take on NVIDIA, which fell more than eight and a half percent in the session. Overtime is back in two. Welcome back to Overtime. Auto stocks getting hit today ahead of President Trump's tariffs on Canada and Mexico. Phil LeBeau has the details. Phil. John, we will find out over the next couple of days just how quickly automakers,

at least some of them, may decide whether or not to pass along a 25 percent tax, some portion of it or none of it, to their passengers or their customers, I should say, in the form of new prices on vehicles. When you look at the number of vehicles that are manufactured in North America, the bulk of what's sold in the U.S. is built in the U.S. But Mexico at 16%, Canada at 7%, put those together, basically one out of every four vehicles sold in this country are coming from north or south of the border. So what we've been 16 percent. Canada at 7 percent. Put those together. Basically, one out of every four vehicles sold in this country are coming from north or south of the border. So what we've been told by those in the auto industry, and I've talked with people at a number of different suppliers

and automakers over the last couple of days, they're building inventories. They've been doing that for some time so that if they need to get vehicles across the border, they've done that as much as possible. Or parts close to plants in Canada or Mexico, they've done that as much as possible or parts close to plants in Canada or Mexico. They've done that as well. Auto prices are unlikely to immediately change. At least that was the expectation as of earlier today. We'll see if that plays out over the next few days. The automakers and suppliers, they're going to be in a cost influx because the suppliers are saying, we're not going to eat all of this 25%. You've got to pay some of it. The automakers are saying, wait a second, we're going to hit ourselves.

So they're trying to hash that out, the automakers and the suppliers. Take a look at GM, Ford, and Stellantis. Keep in mind that the automakers, a little better position than the suppliers because they have some capacity that they can shift some of their production to here in the United States. And then finally, as you take a look at Toyota, Honda, and Nissan, we should point out it's almost every automaker that's impacted here. It's not just the big three. Yes, the big three have more exposure than some of the foreign automakers,

but the foreign automakers are taking a hit too. And there are some popular vehicles that are built in Mexico and in Canada. Take the RAV4 for Toyota. I mean, that's one of the most popular vehicles that's built in Canada. What will happen to the price of that? Again, we'll find out how quickly the automakers have to decide what to do in terms of passing along costs. Great setup, Philip Boe. Thank you. And now for more on the tariff impact on autos, let's bring in John McNeil. He's a former president of Tesla, former chief operating officer of Lyft, and currently serves on the board of General Motors and is the CEO and co-founder of DVX Ventures. Good to have you.

So it looks like things, they're not getting any cheaper anytime soon. Rates are higher for longer. That makes payments on vehicles more expensive. Hard to imagine prices going lower. Automakers were already pulling back from some EV plans. So what does that do to everybody who's not Tesla in the EV space in particular? And then what does it do to Tesla? It's a great question, John. I think, you know, businesses can adapt to competition, but sudden shifts in tariff can make long-term planning for any company difficult.

And policy whiplash can certainly disrupt supply chains and investment strategies. I think in GM's case, GM's built its business on resilience. It hasn't been waiting to react and has been proactive around this, and they've invested in a really resilient supply chain and an agile approach to manufacturing. And so GM's in a strong position to mitigate the short-term impacts and ensure customers get the GM cars that they want and they love. As Mary Barra said recently, we think that we can mitigate 30% to 50% of the tariffs without deploying capital. And at the same time, GM and the administration, I think, want the same thing, which is good jobs for hardworking Americans and a strong domestic auto sector that keeps us competitive globally. So there's a lot of reaction in the moment.

And I understand that. And GM's built a business model that can adapt. And there's a lot of noise. But GM's really and the team is really focused on execution. I want to go back. We can absorb these kind of shocks. Okay. I want to go back to Tesla for a moment because you operated there at a very high level.

Is it possible to separate the Tesla brand in the eye and mind of the U.S. consumer, global consumer, from the brand of Elon Musk. We're at a moment where Elon Musk has become a force in the Trump administration. People have a lot of feelings about that, but I don't know how many government employees were buying Teslas anyway. Well, I think, you know, you've seen the impact of those two things being tied together. Elon has been Tesla and Tesla has been Elon. And I think we've all seen the numbers in terms of what's happened to the brand over the last quarter or so, and therefore what's happening to sales and key markets. And I think in the more broad sense, Tesla no longer owns the EV market. And for a variety of reasons, not just the brand, but competitions here.

There are now dozens of really compelling EVs that give the customer some pretty attractive options. And we saw in January that EV sales were growing faster than any other automotive segment. Global EV sales increased 18% in January of 25 versus January of 24. And that's really worldwide. And so I think for Tesla, what's bad for Tesla may be good for the sector in that there's a lot more competition and there's a lot of really, really attractive EV product now that is on the market and coming to market. How do the tax credits, the EV tax credits we've seen that might be going away factor into this or the credits we've seen that might be going away factor into this or the credits we've seen that have been paid to Tesla by other automakers? I mean, that whole environment

had existed for a while and propelled a company like, for example, Tesla. And now potentially a lot of uncertainty could be on the chopping block. We spoke to the CEO of Rivian who said this could affect demand if you start to take this away? Yeah, Morgan, you raised two good points. One is the supply side incentives and one is the demand side incentives. And on the demand side, the major incentive in the U.S. has been the $7,500 tax credit. And in countries where those tax credits have been pulled off the market, you see an impact on demand. And it can be 20% to 25% impact on demand. So that, I think, is real if those credits get pulled back. On the supply side, as you mentioned, Tesla's been the beneficiary.

And if the supply side credits get eased and that market changes, that's a negative to Tesla because it's a significant portion of their cash flow comes from other car companies paying them for credits. We start to see negotiations for the USMCA next year. I do wonder, with tariffs poised to go into effect on Mexico and Canada tonight, whether this is the opening salvo for the possibility of those negotiations starting sooner. And I know one of the concerns from an auto supply chain standpoint, an automaker standpoint, is China potentially coming into Mexico to set up shop to get around other trade restrictions and barriers that would exist through more traditional means. So are there ways to start to negotiate and shore up the supply chain in a way that would make a GM or a Tesla or name another automaker that's operating in the U.S. more comfortable with the manufacturing process? North American Free Trade Agreement, which really set up this architecture of having North America be a regional competitor against both the Chinese car makers and the European car makers. And so ironically, the cross-border manufacturing and assembly is really the result

of the prior Trump administration's trade agreement. And I think the conditions broadly are still the same. We want to have a very strong competitive base here to compete with the Chinese. And China is really at its all-time strength in auto. So if we've got trade concerns with China, I think we're going to want to be very proactive in solving this very quickly for the automotive industry, because we don't want to put the North American or especially the U.S. automotive industry on the back foot, right as China's coming to market with so much competitive strength. John McNeil, we covered a lot. Thanks for joining us. You bet.

It's time now for a CNBC News Update with Pippa Stephens. Hi, Pippa. Hey, Morgan. The FAA says it's investigating why several flight crews received false alerts of nearby aircraft on Saturday at Reagan National Airport in Washington. The agency said today some of the crews conducted go-arounds as a result of the alerts. The airport's traffic has been the subject of intense focus after an army helicopter and an American Airlines flight collided midair in January, killing 67 people. The top spokesman for the Department of Health and Human Services has quit just weeks after starting the job. In a LinkedIn post earlier today, Thomas Corey wrote he resigned on Friday, effective immediately. It comes as HHS Secretary Robert F. Kennedy Jr. faced blowback over his comments last week about the measles outbreaks following the death of a child in Texas

from the disease. Corey has yet to respond for comment. And after 31 years of covering the NFL for Fox Sports, Jimmy Johnson is retiring. The Hall of Fame coach made the announcement today during an appearance on The Herd with Colin Cowherd. Johnson won two Super Bowls with the Dallas Cowboys. Morgan, I'll send it back to you. Pippa Stevens, thank you. Coming up, we'll look at one indicator of analyst sentiment that could be signaling an even more bearish setup for the market. And much more on the major pullback for NVIDIA in the regular session and the broader dip for the chips. Overtime will be right back.

Welcome back to Overtime. Another rough session for the bulls as President Trump confirms tariffs on Canada and Mexico will go into effect at midnight. The Dow falling more than 600 points. The S&P 500 dropping 1.75 percent, the Nasdaq falling more than 2.5 percent. Let's get back to Mike Santoli with a look at sentiment among sell-side analysts. Mike? Yeah, John. Bank of America for decades has been tracking the recommended asset allocation to their clients of their strategists. And right

now, the recommended equity allocation is just under 57 percent. And they use this as a potential contrarian indicator when it becomes excessively bullish or excessively bearish. And these kind of moving lines tell you the current average that qualifies for excessive bullishness or bearishness. Basically, we're never going to be as wild for stocks, presumably, as we were in 1999, and therefore we have a new normal. And right now, it's just below that threshold where you would say, uh-oh, everybody's too bulled up. It's going to be a negative implication

forward-going for equities at this point. So I think it really more speaks to the elevated expectations in general that prevailed coming into this year that are now being reset through prices being chopping to the downside. What strikes me about that, Mike, is how bad that advice seems to have been. I mean, during that most of that period when it was going down, it should have been going up, right? Well, yeah. And that's kind of always the way you fight the last war.

There's no doubt about it. On the other hand, you know, this has been kind of coming up in the last couple of years, and stocks have trounced bonds over that period. But this year, it's been bonds and cash over stocks. It's been non-U.S. stocks over U.S. stocks, and it's been defensive U.S. stocks over aggressive ones. So it shows you that all those things essentially turn the consensus upside down. That's what has to happen in order for us perhaps to find some kind of a bottom.

People find a new storyline. All right. Mike Santoli, thank you. NVIDIA is one of the worst performing stocks in the S&P 500 today on tariff and export control concerns. Up next, Wedbush's Dan Ives on whether investors should buy NVIDIA shares despite those headwinds. Plus, we'll look at the drop for fintech stocks and which names could be due for a bounce. We'll be right back. Welcome back. Tariff and export control fears are hitting NVIDIA and other chip stocks hard. Christina Parts-Nevelis has the details for us. Hi, Christina.

Yeah, hitting it hard. NVIDIA lost almost $300 billion in market cap, which is the equivalent to the entire value of Salesforce or Coca-Cola. Last week's strong earnings report for NVIDIA really failed to attract investors. They were sitting on the sidelines due to margin concerns. That was a big one with the earnings report. But another risk that you mentioned is potential U.S. export restrictions on AI hardware amid reports of advanced chips from NVIDIA reaching China despite sanctions. And sales to Singapore, which is about 18 percent of total revenues as of fiscal 2025, raise concerns as a possible backdoor to China, especially after Singaporean authorities arrested three individuals last week for misrepresenting the destination of U.S.-made

servers from Dell and Supermicro. Separately, Taiwanese outlet Commercial Times reporting today NVIDIA customers are cutting orders specifically for Hopper to wait for the next generation Blackwell. Other names lower. You've got server assembler Supermicro plunging 13% today, bottom of the S&P 500. Lots of momentum trading in this name just over the last little while. It's very volatile, especially after it filed with the Nasdaq. It had delayed reports, finally filed last week. There's competition from Dell an issue.

Supermicro also said it would build another campus in Silicon Valley last Friday. Tariffs announced today make construction more costly, which would also be the case for Taiwan Semiconductor, fell 4% today and promised to spend an additional $100 billion in U.S. investments. Keep in mind, in December, Macquarie Bank warned it was 30% more expensive to build here in the U.S. for TSMC. So with tariffs, that cost goes even higher, and you can be sure that TSMC will not be absorbing those costs. Guys?

All right. Christina Parts-Navlas, thank you. That's a great setup. As for more on NVIDIA and the pullback in mega-cap tech, let's bring in Dan Ives, Web Bush Security's Global Head of Technology Research. And Dan, that's exactly where I want to start with you, because there had been some speculation. We expected we were going to get a chip-related announcement from President Trump this afternoon, and that was really when we saw the speculation that maybe it's going to be increased export controls on the likes of NVIDIA and some of these advanced, you know, SEMI-related products. Instead, we got this $100 million investment from Taiwan Semi. But that fear is

still out there. And it's kind of interesting because we have export restrictions on quite a few countries, but apparently not Singapore. Yeah. And I was just there on Friday, right? So I could tell you the sense is that these export controls, it's not going to be really constrained to ultimately Singapore. And I think the fear here, and I think you're seeing on the Nvidia sell-off Is that this is gonna be a huge ripple effect. There's me harder and harder to get those chips That's something even though there's the China piece. It could have a much broader Impact across the region. I do I think barks worse than a bite I mean as someone you know in Asia for two weeks

I think it's when I get the fears But I don't think this is something that's really going to be as much of a restrictive factor, despite everything we saw today. Do you think it's deep sea concerns that are spurring this next wave potentially of regulation? And I guess perhaps just as importantly, has the train already left the station when you look at homegrown chip development in a place like China. Look, I think deep seek, that was a shot across the bow because I think everyone recognized, OK, they didn't do this in the basement with no chips. And it comes down to if they use next gen

NVIDIA chips, what does that mean? And I think, look, the broader fear, especially that you see in the Trump administration is, OK, we got restricted more and more. So I think what you're starting to see from an investor perspective is, OK, what does this mean for NVIDIA? Second derivatives. Is this going to crimp the supply chain? Now, we disagree. I think when it comes to tariffs, we've seen many times this is one it's going to have an impact, but I do not believe it's going to have such a pronounced impact. I think it's being factored in here in terms of supply chain. Still, 15 to 1 demand to supply even when it comes to Blackwell. Well, OK, bark is worse than bite. But still, a bark can be pretty bad if it hurts sentiment, right? If it sort of puts a wet blanket on the

party, has an impact on valuation. At what point does it start to do that? And do you have to, if you're an AI investor or even NVIDIA investor, have to get less bullish? Yeah, look, I mean, no doubt you're going through a lot of turbulence here. From a sentiment perspective, you're seeing this stuff. Then it becomes self-filled in prophecy. But what I'll tell you is it comes down to just demand. Do we see any changes in spending? That demand is going to continue to be there.

And I think it's when there's only one chip in the world that ultimately could fuel this. I get we're going to go through this, but in my opinion, these are opportunities, not the time to run for the hills. I think when you look at it in terms of tech winners, if you look over the years, it's period like this and these white knuckle periods that you own the winners, you own the NVIDIAs. Well, speaking of a company that's been through cycles like this, Apple, right, on the client side with AI versus on the data center side. It's the biggest premium consumer product company on the planet. And, boy, could things get more expensive. iPhones get more expensive under these China tariffs. How much of a threat is that for a company that has some different ways to sell phones, has a lot of cash to do some subsidizing of the debt necessary to help consumers do that?

Yeah, I think we believe there's a 90 and 95 percent chance that ultimately there's loopholes that they're not going to really be impacted in terms of iPhones from the tariffs. I think very similar what we saw in 18, 2019. You know, Cook, it goes back to like, you know, 10% politician, 90% CEO. I think they could absorb, if they actually had to, some of these tariffs with no sort of passing that through to consumers. The bigger issue is if this lasts until September, until actual iPhone 17 production, that's where it gets a little more, you know, I think nerve-wracking. But as of now, we believe that they'll ultimately be loopholes that Apple is not impacted. And that's why you're

seeing the stock not really reflecting too much negative because the investors are kind of reading through that. Only 10 percent politician? Maybe I'd say 10 percent, maybe the last few weeks, 20, 25 percent politician. But that other CEO piece, it's like 60 percent supply chain focused CEO, right? All right. Dan Ives, thank you. Yeah, thank you. One outperformer in today's pullback. Well, European defense stocks, also U.S. defense stocks, but European defense stocks surged after Friday's Oval Office meeting with President Trump and Zelensky. We're going to talk about those moves and why we're seeing them ahead. And fintech stocks falling again today after a rough end to February for that group. Coming up, an analyst tells us the names he's recommending to buy

on these dips. Be right back. A big drop for U.S. markets today, but a huge move higher to start the week for defense stocks in Europe. Big gains in European contractors like Britain's BAE Systems, Germany's Remittal, France's Thales, Italy's Leonardo, Sweden's Saab. They all added to torrid rallies that we've seen since the start of the year. It was the best session for the stocks Europe Aerospace and Defense Index in five years. And actually, broader indices in the U.K. and Germany were spurred to record highs by some of these moves. So what's propelling it? When European leaders met over the weekend to forge a peace plan for Ukraine, they pledged to ramp up defense spending. This following the explosive meeting

between President Trump and Ukraine's President Zelensky last Friday. We've got more details are expected tomorrow regarding this so-called rearm Europe plan. Now here in the U.S., defense names also finished higher because at least in the near term, international growth is outpacing domestic growth. And as Jeffries points out, in 2024, NATO allies spending increased by 18 percent. That was compared to 11 percent for the U.S., with broad foreign military sales support, quote, reshoring potential long-term trend. But interoperability likely leads to near-term needs with Ukraine. So whether it's directly or indirectly, at least here in the near term, the expectation is that U.S. defense contractors are going to benefit from more defense spending in Europe and other parts of the globe. Makes sense.

Up next, the top analyst on whether there's a strategic opportunity for hard hit fintech stocks like Coinbase and Robinhood following President Trump's plan for a crypto strategic reserve. Be right back. Welcome back to Overtime. Fintech names like Block, PayPal, Coinbase, Robinhood falling again after underperforming the market in February. With Coinbase and Robinhood giving up an early pop today on optimism about a strategic crypto reserve. Let's bring in Mizzou host senior analyst Dan Dolev. Dan, how much of this is a preview of possible good things to come with a friendly Trump administration when it comes to crypto and some of the stocks connected to it? Or how much of this is just a sign of volatility and the risk associated with that?

Hey, thanks for having me. I think it's actually a preview to a good thing because if you think about it, Trump promises, Trump delivers. And I think he's proven to be a put option on crypto. So when he sees crypto starting to derail, he throws out the strategic reserve. And I guess

what happened after that, you know, the market kind of gave up the gains. But just in general, I think he's very focused on that industry. So he'll probably do it again or they'll find a way he'll find a way to get excitement back in the, you know, in the sector. Yeah. I wonder how to feel about the fact that, I mean, it was at 85 on Friday, went up to 95 over the weekend. Now it's back at 85 like nothing ever happened. But you really like Robinhood, PayPal, Affirm, Toast. Pick a couple of favorites there and tell us why. Yeah, Robinhood, look, they're basically gaining share in crypto.

They're gaining share in equities. They're moving into Asia. I heard the downloads are really good in Europe. So everything good is just going really, really well. And what you saw in the fourth quarter, I think it's going to get even better, especially now that they're getting into Asia. And that's a huge market. Really like PayPal, there's like this big misunderstanding of PayPal. It's really just more about the macro that's hurting the branded checkout button.

It's not the company itself. So people are just too focused on Apple Pay. They're actually not losing share. And our research shows that. On Affirm, just really quick, they're gaining share from their competitors. Their competitor is going to go public this year. And everyone's going to see how much better Affirm is than their competitor, their big competitor out of Europe. So I think all these names are looking really good in toast as well, as you mentioned. Dan, what's been interesting to me is, I mean, more broadly, we've seen this rotation out of growthier parts of the market in the last couple of weeks. And the trading across broader fintech reminds me of what we saw in the market a couple of years ago,

where it didn't matter what the company was and what the company's businesses were, their customers, their verticals. If you saw a name like PayPal trade lower, you saw everything else in the fintech universe trade lower. I wonder how we've gotten back to that collective lockstep in terms of trading patterns. It's a growth scare right now. So I think we have to emerge out of this growth scare. That's exactly what I was saying. It's a great observation because it's more macro driven and fear driven than fundamentals. And I think once we get through this growth scare, hopefully, you know, a couple of weeks, then everything's going to look brighter on the other side because the underlying fundamentals of the stocks that I mentioned are actually really good. So it's actually good news to see that, not bad news in that sense.

So in light of that, are names that have global exposure or are growing internationally going to be a little more attractive here? Or do you stick with stuff that's a little more domestic still? I would say idiosyncratically. So getting strategically into Europe and Asia like a firm or Robinhood

is just boosting their revenue and boosting their volumes and boosting their users. So it's more just it's not about the mix it's about the incremental revenue where does that come from. Dan Doliff thanks for joining us. You. Some names for

investors to check out there on a down day broadly for the markets with- you know the Nasdaq the worst performer of the major averages. But Russell 2000, the worst performer in general of the ones that we track here on a daily basis, down something like 2.8 percent. Treasury yields continue to fall lower. And to Dan's point, it is really a growth scare that is rippling through the market right now. And tariffs don't help this.

Just weird, though, in a way to see NVIDIA down more than eight and a half percent and the other mega caps, Apple down one and a half, Microsoft two, Amazon three and a half ish. I mean, NVIDIA has had such a big presence. It's been on such a strong run over the past couple of years. And of course, we had Jensen Huang on CNBC post earningsearnings last week, talking about his continued belief in the story, the trajectory of AI. One wonders whether, you know, as Dan Ives was saying, there's an opportunity here when it goes down or, you know, it's going to go down perhaps more, at least in the short term. Yeah, it is worth noting, though, that we've seen more broadly the semi sector turn and it will be interesting to see whether the broader markets can continue to hold up if that continues to play out. Speaking of semiconductors, interesting commentary out today from a former Intel CEO kind of backing up what Pat Gelsinger was able to do.

They're saying don't split design and manufacturing over at Intel, though it's expensive to know what they're going to do with that over time. Yeah. Crude was lower today. Gold was higher. We're going to watch for those tariffs that take place at midnight. In the meantime, that does it for us here at Overtime.