Closing Bell - Closing Bell Overtime: Stocks Set Fresh 2026 Lows as War Ripple Effects Batter Investors 3/12/26

Episode Date: March 12, 2026

Eric Johnston of Cantor Fitzgerald asses the market outlook and explains why near term risks for stocks may rise over the next week or two even as he sees the pullback creating a buying opportunity. Earnings drive the tape with results from Adobe, Lennar and Ulta Beauty. Brian Schwartz of Oppenheimer reacts to Adobe’s results and management change. Julie Biel of Kayne Anderson Rudnick discusses whether software remains a strong long term bet and why companies with proprietary data and regulatory advantages may prove harder for new disruptors to challenge. Renewed strength in cybersecurity stocks and growing debate over whether global tensions could push digital conflict into a new phase with CSIS’s Lauryn Williams. 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 end to the trading day at the NYSC. Vulcan materials ringing the bell and at the Nazak. KLA 10 Corps doing the honors. Welcome to closing bell overtime. We're live from Studio B at the Nazak market site. I'm Melissa Lee along with Mike Santoli. Sox taking another leg lower today. The Dow finished the session down, almost in session lows.

1.6% is a loss there. The S&B 500 down by 1.5%. Of course, oil was a big story. Without a doubt, continuing to move higher, getting closer to that $100 a barrel level on WTI crude, as Iran continues to make threats about the straight-of-horm moves. We'll get the latest on that, along with all the stocks making moves, plus what's happening in the bond market.

And we've got some earnings to watch this hour as well. Adobe, Alta Beauty, and the home builder, Lenar. Meantime, yeah, we did close on the lows. Yeah. S&P 500 is above the intraday lows from Monday, but it's almost 5% as a peak-to-trough decline. Maybe you say no big deal. I think the big debate is, does this reflect composure or complacency?

Is the market actually trying to, in a sober way, look through these challenges, or are we just kind of hoping that we get a window and escape hatch from some kind of help on the headline front? You know, oil at 100. We were at 120 for a blink the other day. We did close below the December low in the S&P. That's one of those things where old logic says that's not good going into the first part of a year. I thought it felt like finally today we sort of got the response you might think you would get to. to accrued up 10% in one session. We saw the typical sort of slight bid for staples. We had bid for utilities here. We had sell off still across the board pretty much in IGV.

And my sort of barometer on the market, boom energy. Which had really benefit from Oracle's earnings, but sort of like this pocket of growth here, gangbusters this week, but finally turned lower late in the session, except, of course, the missing ingredient is bonds, the bid for bonds. That's right. It is not there. Not at all.

of the puzzle. Exactly. I mean, I do think you're right. You could sort of see risk appetite draining from a lot of these parts of the market. Certainly anything cyclical was suffering, no doubt about it. Bloom Energy is kind of that speculative front line of things. And it's big in the Russell 2000, which was down 2%. So I grant all that. I guess the real issue that we have to try and isolate here is, is there something particular the market is waiting for? Is there some kind of support trigger? Or is it much more about, you know, essentially, We're just waiting to get a little more overdone on the downside in the short term and have it go from there. I would argue that you probably want it to see a little messier.

Yes. You want capitulation of some sort. And we sort of haven't seen that. No, not at all. I would also just one other quick note is the difference between today and some other days this week is Mag 7 did nothing. In fact, it was down. So that's kind of almost idiosyncratic. Like it's not really based on the news.

It's not really based on cyclical indicators. So you just didn't have that defensive bid in the main. mega cap tax. We'll see if that comes back. As we mentioned, rising oil prices, driving the market action once again today, hurting many stocks, but of course helping others. Christina Parsonabalus has those names for us. Hi, Christina. Hi, Michael. Tider energy supplies and rising inflation. Really, like you mentioned, dragging stocks lower and adding to fresh signs of stress also in the private credit market, I should say. Energy stocks were the clear winner. Chevron, Exxon Mobil, Conoco Philips, Occidental, all closing higher today with Oxy among the top S&P 500.

performers today. Fertilizer stocks also surging. CF Industries, the best performer in the S&P today, up 13% and hitting a new 52-week high. Mosaic closing up as well, 7%. It's also considered a chemical fertilizer's name. Lionel Basel moving higher after City flagged an attractive risk reward set up, pointing to potential upside from the Middle East conflict and a fresh look at the chemical company's North American assets. Dow Chemical, up in sympathy. You can see all green on your screen, but on the downside, we did see Sherwin Williams as the paint company down again today, now falling in eight of the last nine sessions since the attack, losing about 12% this month alone, Home Depot, seeing similar pressure. And of course, pressure hitting the travel industry hard.

Norwegian cruise lines, southwest, United Airlines, all down at least 4% again today, guys. Christina, thanks, Christina Partsenevelas. Now let's stick deeper into the latest news, driving those oil prices higher. Pippa Stevens is that for us, Pippa. So the SPR announcement and record IEA released not calming energy markets with Brent settling above $100 for the first time in nearly four years. Three more ships were struck in the Persian Gulf overnight following three vessels sustaining damage on Wednesday. That comes as Iran's military command spokesperson reportedly said to get ready for $200 oil, that's according to Reuters, with the Supreme Leader saying the straight must remain closed to pressure the U.S.

Now, at the start of the war, the oil activity was very much concentrated in the front month. contract as the market view disruptions are short term. But that is now changing a little bit, with the futurist curve moving higher. Brent for October delivery now at 85 compared to 70 before the war. T.D. saying that even if the war ends immediately, it's unlikely for Brent to fall below the 70 to 75 range under a protracted conflict where prices spike and are only calmed by demand destruction. They see a higher post-war floor near $90 due to lasting supply damage. Guys? Pippa, thank you. All right, well, as oil prices threaten to cause inflation even further, bond yields are continuing

to rise. Rick Santelli in Chicago with a look at that. Hi, Rick. Hi, indeed, Mike, and it's all being led by the short end. If you look at it twos and tens for a six-hour chart, it just jumps at you how two-year yields are up significantly. Ten-year yields for a small time. We're almost unchanged.

Right now, 30-year bond yields are unchanged. And by the way, that was a really good auction today. So some investors seem to be picking areas to start to buy. Do remember, with all the nervousness in the market, the credit spreads are extremely tight. You're saying not a lot of buying in treasuries. Maybe some of that loves going into the corporates. And if you look at the two-year, last time we closed at these levels, was August of last year. And finally, the 210 spread, dramatic flattening.

Right now it's the flattest in four months. And why is the two-year yield going up? Well, just look at Fed Fund futures. Pretty much they're going hand in hand as investors take out some of the easing probabilities for the rest of the year. Melissa, Mike, back to you. Rick, thank you, Rick Santali. Well, the stocks close at the lows of the year. Our next guest warns of short-term risks ahead but says the dip is a good buying opportunity.

Let's bring in Cantor Fitzgerald, Chief Equity and Macro Strategist. Eric Johnson, Eric, great to see you in person. Good to see you. You actually think what's going on with the markets provides a good setup for the next bounce higher. Yes. So the risk over the next, I think, one to two weeks are really crucial. I think those risks are high. Finally today, some of that is starting to be priced in, which I think is healthy.

But, you know, we have a situation where, you know, this is all unknown. Hormuz is closed, and this hasn't happened like this in a very long time or ever. And there are real implications every day that it's closed. And we don't know how this is going to turn out, right? With Liberation Day, it was up to one person. This is not. And so I think that unknown and what the rampifications would be if it was closed for another week, two weeks, three weeks, four weeks is real. Now, this, of course, can all reverse with, you know, this coming to, you know, fruition and Hormu's opening.

But I think that, you know, we're down about 3 percent so far since the war started. You know, probably not enough considering the risks that are out there. I mean, the new Supreme Leader said he doesn't want a single leader of oil travel. through the straight of Hormuz. That doesn't sound like they're in any position where they're going to back down whatsoever. So even if Trump says it's going to be, President Trump says it's going to be a matter of weeks

and not months, the other side of the equation doesn't seem to be indicating that there's any way to that path. That's right. I think prior to the last two days, the market was of the view that it was up to President Trump, he could change things on the fly. I think today was about maybe not. Maybe there are other parties that are involved

that need to agree to that. This construction that we're just kind of waiting for this intense phase of the crisis to pass and return to some version of the fundamentals that we thought we had in place before. I guess it depends on those fundamentals not being changed very much by the fact that oil is where it is. You've had these disruptions to trade flows. I mean, the consumer stocks are not acting like people are going to be immune. Financials are not acting very well, too.

So does it cause a rethink yet in terms of, you know, the underlying trajectory of the economy and earnings? I think somewhat. So we've had, you know, rate cuts pushed out. We've had, you know, the ECB has gone from cuts to the outlook is now for hikes. Australia's about to, you know, hike. So there have been changes. Oil prices, six-month oil, is still up 25 percent, right? It's not just front month. So, yes, there will be some lateral implications, but I think the backdrop around earnings, much of the S&P 500 earnings are going to be, I don't I'm going to say immune, but less sensitive to the price of oil. And I would say also for the economy.

Economy was in, you know, very good shape prior to this. And there are significant tailwinds that this economy has this year that I think are going to be somewhat, you know, somewhat affected by this for sure in the short term. But I think can get through it. And we can, you know, look forward, look six months ahead and say, okay, we're still going to have earnings growth that's going to be in the, you know, low to mid-teens. And we're still going to have an economy that's going to be growing. you know, two to three percent. There has been, though, this hope still in the market that there's going to be a rate cut at the end of the year, that there's something like a 90 percent chance right now of a 25

basis point cut. BNP is out with a note saying that they think that there is a significant but underappreciated risk that it's going to become symmetric, that the next move equally could be higher or lower. If we move to that stance where it is in the possibility that we go higher because of inflation, what happens, do you think? So, yeah, I think that would be problematic. I can't say that I necessarily agree with that because a lot of the core inflation trends are going in the right direction, right? If you look at housing prices, they're going in the right direction. Wages are, you know, wages are moving lower, especially with AI likely to be impacting jobs in the not too distant future. We're going to be lapping tariffs over the course of the next six months. So there's a lot of, you know, positive inflation course. inflation tailwinds, this clearly impacts that. But no, I think if we were to move to a scenario

where people thought hikes were really on the table, I do think that would be, you know, sort of problematic for the market. Stay right there. We've got Adobe earnings out. We want to get to Christina Parts and Nevelis who's got the numbers. Christina. Melissa, I want to actually start with the news right now that Shantanu and Ryan, who had served as the CEO of Adobe for 18 years, has announced that he will step down as soon as they find a successor. They have not found a successor just yet. There's a special committee looking into external and internal candidates, so there's no date yet.

He will remain as chair of the board. So that is the biggest news coming from this company. Shares down about 7%. Now for the actual earnings. EPS, we're just not going to compare. It came in at 606 adjusted, so earnings per share of 606 on revenue, which was a beat of $6.4 billion. A key metric for this name is annual reoccurring revenue.

And they break it into a quarterly rate. So Q1 ARR coming in at $26.06 billion. It's slightly higher, a hair higher than what the street wanted. The subscription revenue, which is obviously bread and butter, $6.17 billion for the quarter, slightly higher than what the street wanted. For Q2 guidance, we'll call it better than expected. The range was higher. And for full year guidance, EPS and revenue,

they reaffirmed what they already had full year at $2,000,000,000 in full year revenue. So again, the CEO is going to be trained. transitioning. They're still looking for a successor, and they did beat on their annual reoccurring revenue and their subscription revenue. Yet shares are down about 6% guys. Do we have any granularity in terms of the ARR, Christina, specifically generative AI, ARR? I know that was a huge big point for the company last quarter. Okay, yes, Adobe delivered record Q1 results with AI first AR more than tripling year-over-year in subscription revenue. growing 13%. So there's no actual number that I'm seeing so far specifically to the AI portion

of that, but he's saying that it's tripled. Okay. Gotcha. Thank you, Christina. Thanks very much. Eric, just quickly on, you were saying today it felt like maybe there was a little more of a recognition, maybe a little more of a give up of that hope that we were going to get out of this. What would you be looking for as a sign of some kind of extremes being met or a kind of a full, you know, surrender type moment? Sure. So institutional positioning has come down, you know, for sure. But there's still a fair amount left. And the retail investor has not sold yet. So I would be looking for, you know, RSIs to go below, you know, 30-ish for volumes to spike. So if you look at today's volumes, you know, we were down one and a half percent. They weren't anything that were that special. So, and that's been true. the way for the last, you know, few days. So I think you want to see increased volume. You want to see an oversold, you know, condition and somewhat of a more panicky feel than we've gotten, you know, so far, although today was a good start. There you go. Eric, good to talk to you. Thank you.

Appreciate it. All right. Well, Alta beauty earnings are out. Gabriel von Ruz has those numbers. Hi, Gavin. Yeah, hey. So Ulta is missing on the bottom line. EPS coming in at $8 and $1.1. That's a $2 miss from the $8 and $3. analysts have been expecting. It is a beat on revenue. 3.9 billion they're reporting versus estimates of 3.8 billion. The stock is down now a decent amount. We're seeing it down about 8%. What I think is pushing that down is the guidance. We had a little bit of weak EPS guidance and a little bit of weak comp guidance, even though the quarter was strong itself. In terms of comps, they're expecting comes to be up 2.5 percent for fiscal 26. That is lighter than the 3.5

that analysts have been expecting. And then for EPS, they're expecting between $28.5 to $28.55 at the high end, that's a little bit higher than expectations at 28.40. But then, of course, at the midpoint, a little bit light at 2830. Back to you. All right. And, of course, the expectations going in for this one very, very high. So that's part of the setup there.

Gabby, thanks. Gabrielle Fon Rouge. Earnings just out from Adobe. The stock is lower in the after-hour session. We've got instant reaction to those results. And the news that the company's CEO will step down. Plus, where the broader software group stands right now. That's coming up on closing bell overtime, live from the NASAC market site. Dollar General shares lower following its results this morning.

It beat on earnings in revenue. A comp store sales growth was 3% for the full year, but Dollar General doesn't expect to match that growth for 8,000, which is weighing on the stock. The company is saying it's monitoring of a number of potential headwinds, including the changing tariff environment and the possibility of higher gas prices due to the war in Iran. Well, Adobe reporting earnings just moments ago. It was a beat on revenue. Also, though, we had news that long time Adobe CEO, Shantanu, Narayan, will be stepping down as soon as a replacement is found for more on that stock's results and the reaction. Let's bring in Brian Schwartz, Oppenheimer analyst and managing director. He downgraded the stock to perform from outperform back in January. So, Brian, I guess first your reaction to the CEO transition. Obviously, there wasn't really a process in place. Is that what the market's, at least in part, reacting to here?

First of all, Mike, thank you very much for having me on your show. Yes, that is a negative surprise. I think the investment community was looking for a change, that, you know, Adobe had fallen behind the AI curve, they missed product cycles, the execution has been inconsistent. But I think not having a successor name, it just puts a negative overhang on the stock. You don't know who the new CEO is going to come in, what they're going to do with the strategy. There's now risk to the guidance because typically when a new CEO comes in, they like to lower the bar so they can execute and beat numbers. So I believe that's the biggest driver of the after hour pricing.

What do you make of Shantanu Narayan being allowed to be chairman still? I mean, it sounded like he was pushed out in some capacity, and that's just me reading between the lines here, Brian. but to also have him as chairman. I mean, what does that tell you about the company and where it stands? Melissa, I think that's right. You know, this is certainly news that wasn't expected. So I think it's fine with him being the chairman. He's been around for 20 years.

He knows all the customers. So he's got deep customer relationships along with the partners. And certainly has been one of the figureheads leading the evolution of the product. But the chairman tends not to drive the strategy or even really the execution of a soccer company. It tends to be driven by the management team. So certainly going to be a big parlor game moving forward on who's going to replace Chattanoe ad adobe. The results themselves, I mean, I guess coming in relatively close to expectations, but what really matters here in terms of trying to size up this stock?

There's a really simplistic way of looking at saying, like, wow, this is close to a 10% free cash flow yield, at least in the short term. But what's the real story in terms of what can drive the stock up from here? So two questions there, Mike, before I get into the catalyst on the improvement, in terms of the results, you're saying more of the same. You're seeing a business that is slowing top line growth. Looks like it's heading towards an industry average growth rate with risk that it could go below the industry average. So give up share in the market. at the same time, you're seeing the profit margins decrease for this business. So clearly the business is under pressure.

And Adobe sends tends to guide very conservatively put up a low bar. So, you know, beating the numbers is expected. To your second part of your question, in terms of what could trigger an improvement in the sentiment, you know, Adobe needs something new. They need a new growth vector. You know, they are facing a classic squeeze. AI is accelerating the velocity of content creation of basically their value proposition. It's commoditizing pricing.

It's decreasing the number of marketing people you need. It's increasing the number of competitors. Ten years ago, Adobe was the only game in town in digital creation. Now you've got Figma, you've got Canva, you've got Open AI, Anthropic attacking them from the high end. And then in the low end of the market, you've got, again, Chachee, You've got Anthropic Canva is best in class. So Adobe needs a new growth factor. Maybe they can look at developing in-app purchasing to increase engagement for the platform,

as well as increasing growth for the business. But they need something that's going to help stabilize the top line, and then hopefully Adobe can reemerge when they get through this technology transition, and growth can improve. So basically what you're saying, Brian, in the age in which AI is really putting extreme pressure on many fronts, on Adobe specifically, that growth vector does not exist currently at the company. Not that what we can see. I think that their AI vision, their product suite of Firefly has been underwhelming. I'm sure they were expecting it to be performing much better than it is today. And again, the competition, the development, the increasing adoption of AI is just very detrimental to the pricing and the competitive intensity of the business.

So they need something new. And let's give the company credit that they are recognizing it. They're looking to shake up the leadership. And hopefully they can bring in a very good visionary and a product person to lead this company through the AI technology transition. Brian, thanks for your insights. Brian Schwartz of Oppenheimer. Thanks for having me, Melissa. A head on overtime. A look at the big name you know, which is riding its worst losing streak since 2023, plus the S&P 500 closing at its lowest level of 2026. Could that downturn turn into a breakdown? We'll be right back.

Welcome back to overtime. Nike shares falling again today. It's a 10th straight negative session, the longest slide for the stock since August 2023. It is now down more than 13% of that time, close to its lowest level since April. Yesterday we spoke to the Barclays analyst who upgraded the stock to an overweight, who said the recent action by the company indicated the worst may be behind it, although the street doesn't appear to feel the same way, at least for now. The chart already in a downtrend, but Mike is actually taking a look at some of the names that are cracking potential long-term uptrems. Exactly. Melissa, I mentioned a little while ago, it's becoming a little harder to give the market the benefit of the doubt,

based on a lot of these maybe bellwether indicators. Here's the S&P 500 over two years, and this is the 100-day moving average. So obviously we look at the 50 and 200, but the 100 has actually been a better guide on a tactical basis at the last couple of years. Aside from the tariff panic here, we haven't spent more than a few days below this level before bouncing pretty strong. You see we actually bounce right on it a couple of times this year. We've been below this for about a week at this point, so definitely kind of the burden of proof is rising on the S&P that it gets back up to like 6850. or thereabouts. So sometimes it's like, oh, the hernia is there. Maybe it pops back in on its own. Other times it's more painful. It lasts a longer time. The other piece I would look at is the

financials. We keep talking about this. So here's the BKX, the Big Bank Index. That did breach its 200-day. Now, one year, it's still up 25%. It's still kind of part of the leadership matrix out there. But it's, again, sort of losing a little bit of that leadership status. And finally, they want to take a look at the Small Cap Russell 2000. There's a lot of excitement about the breakout. This is a five year. Okay, we're below 2,500. 2,400 and change is where we peaked back in November of 2021 and here. So you have this whole big shelf out there that it's trying to hold against.

And so far it is, but maybe by not much. So these are all wait to see what happens. Well, they're always wait to see what happens. I mean, it can kind of go quickly from, oh, no, that's a problem area to, hey, look, it's so overdone that we have a buying opportunity. So, you know, you have to use it as a matrix to try to pull. out the messages at the market. Time now for a CNBC News update. Julie Borson, how's that? Hey, Julia. Hey, Julia. Hey, Melissa, police in Michigan say a suspect rammed his car into a Detroit area synagogue today. Synagogue security confronted the gunman and exchanged fire. He was killed in the confrontation.

Police say one security guard was hurt when the suspect's car rammed into him, but is expected to be okay. No one else at the synagogue was injured. The Oakland County Sheriff says something in the suspect's car ignited, causing a fire, and that out of an abundance of caution, bomb technicians and bomb sniffing dogs were searching the vehicle for explosive devices. NASA has a new target date to send astronauts around the moon. Setting its launch window to open April 1st when four astronauts will make a long-awaited Artemis 2 mission to the moon and back. The 322-foot-tall space launch system rocket has been back in the hangar for repairs since

last month. And the UFC is teaming up with the FBI this week. The Bureau and Mixed Martial Arts League announced today that UFC fighters will travel to the FBI Academy in Quantico to train agents in mixed martial arts techniques. Back over to you. All right, Julia, thank you, Julie Borson. A software stocks took a beating this year as investors worried

they were holding the blockbuster of cess. But the rebound in the last two weeks shows these stocks are hard to quit. Our next guest has a playbook on how to find jewels in the wreckage. Welcome back to closing bell overtime live from the NASAC market site. And another down day for stocks. The Dow down 740 points. S&B 500 down 1.5%. NASAC off nearly two, all three closing at their lows of the year.

A big day for oil. Once again, the main issue weighing on stocks rebounding sharply from a low of around $77 a barrel earlier this week. Brent closing the day above $100 a barrel for the first time since August 2022. All the meantime, we're watching that one, continuing to move lower after hours. year of the lows, a company missing on EPS is beating on revenue. Same store sales guidance, though, weighing on results and shares of cybersecurity company rubric moving higher after the close. The company reported EPS of four cents versus the expectations for a loss of 11 cents. Revenue also beating the company giving full year guidance above consensus. That stock up 3.6%.

Meantime, we're also keeping an eye on Adobe after earnings earlier this hour. A shift in leadership hitting the stock. Longtime CEO Shantanounurion will step down once a successor has been named. He'll as the chair. Now, for the quarter, the company beat on the top and the bottom line. It did grow revenue at about 12%. Question now is whether we've seen a real bottom for software since hitting a nearly 18-month low late February. The IGV ETF is up nearly 11% while the QQQ is about flat in that same time. Some of the top performers during that span circle, crowd strike, data dog, and Palantir. Our next guest says investors have reached a place of peak disillusionment on the sector. Joining us now with Julie Beale. She's chief market strategist

and portfolio manager at Kane Anderson Rudnick. Julie, it's good to see you. I guess it would be kind of poetic if we did put in this very intense bottom in software in reaction to this speculative piece of research from Satrini. Everybody thought the companies were kind of doomed in a hurry. So we've seen the bounce. What do you do as an investor to try and pick among the opportunities there to figure out if there actually is enduring value. Yeah, I think you really have to recognize when you're looking at each individual software business, there's a lot of idiosyncratic elements that drive whether or not there can be easily displaced.

So what it requires is rolling up your sleeves, which no one is lazier than I am. I hate that. But you really kind of have to in software. It's pretty critical. And I think the way that we like to think of it is we're trying to think of businesses that have barriers around them where a startup is going to have a market. much harder time penetrating. It's not enough to say that you're embedded in workflows because I think the younger population is better able to adopt new workflows. You need things like regulatory barriers.

You need to have actually genuine proprietary information that's going to be a defensive moat around your business. And if you don't have some of these elements, it really makes it hard to protect against a venture-back company. And the thing I hate the most about competing against those businesses is they don't have to be profitable, right? They can be as aggressive. in their competition as they want. That makes it really hard if you have to compete against that. You know, you're talking about having proprietary information and sometimes some kind of regulatory blessing. That sounds like a lot of the data services companies that got blasted in that same sell-off, you know, whether it was Fair Isaac and whether it was, you know, some of the index

providers, financial data, things like that. So, I mean, have you arrived at some that you actually feel like you can trust? Yeah, we've been long-term holders of Fair Isaac and companies like that because, you know, we really do fundamentally believe that that data is proprietary and protected. It's embedded in workflows in a way that's really hard to unseat, and it has a lot of scale in its business. But it's not just, you know, in the financial services sector. I really like a company Bentley Systems that works in infrastructure software.

There's a lot of regulation on how you build a bridge, thank God. And I think those types of kinds of. companies, they're unique. They're a little bit of eocentric in terms of what are the drivers of them. And that, to me, is where you can find these businesses that add a lot of quality to a portfolio, right? They have high returns on equity, great cash flow. There's a reason why software traded at these really rich valuations. If you're a professional money manager, they really make your characteristics page look great. They have growth, recurring revenue, all of these really nice elements. And it makes it hard if you're an investor to just kind of walk away from it on the

that it's going to be immediately disrupted in a really kind of violent way. Does Microsoft fit the bill, Julie? Yeah, I mean, I think considering how hard it is to still pull up a single email on Outlook and considering that we still use it, yeah, I think this is embedded in a way that's really meaningful and material,

and they're working really hard to be more on the front foot when it comes to AI. I think that moving beyond their partnership with Open AI is really wise. I think they're recognized that Anthropic has a better motion in terms of the enterprise that they're going after. I think they have better safeguards, and it's a better partner for them. So I think that their pivot, despite all of the investment they've already sunk into OpenAI,

makes a ton of sense. And what about, I mean, just kind of reading between the lines of what you're saying. I guess Adobe may not qualify under the standards you're setting out there. What about things like Salesforce and Service Now? So I think that Salesforce, the place where Salesforce has a lot. of embedded workflow is really in the fact that a lot of the transaction is captured in Salesforce. And I think that that gives them some level of protection. Adobe makes me nervous.

I think that Adobe is embedded in a lot of workflows. But I also think that a lot of the tools that are coming out are really trying to attack some of Adobe's core markets. I think it will take time for that business to really get eroded. But that's one that I just don't see as much protection because it really feels like a lot of the tools that are coming out from Anthropic and from Open AI, they're geared towards consumers and they're geared towards enabling us to work better and more creatively. I worry a lot that Adobe isn't up to par in terms of being able to integrate that. Julie, you mentioned Bentley

and FICO as two names that you've owned for a long time. Have you picked up any in this latest software downturn? I think most of what we're trying to do is just make sure that the names that we do own are the right types of names. I think there are are other names that we're kind of interested and starting to sniff around at, but we want to have more confidence that there's a lot of protection around them. So while it's always compelling and exciting when you see a big down draft in pricing to kind of step in, you want to first make sure that your core portfolio has safeguards around it first. But I do think that there are going to be more names, especially that could be coming to market soon, that might be really compelling

and interesting, especially if they have much more modern data infrastructure underneath that can actually leverage a lot of these AI tools properly. Yeah, a lot of times it is just having like, you know, the latest version and putting it in that in that wrapper. Julie, great to speak with you. Thank you, Julie Beale. Well, Lenar earnings are out. The company reporting EPS of 93 cents a share versus estimates of 96 cents. Revenue also missing forecast. Deliveries and new orders coming in below expectations, but the CEO saying, quote, the fundamental shortage of housing in America has not been solved. Demand is real, deferred, and building. This is the second

earnings miss in a row for the company, and the fourth miss in six quarters, let's see, shares down about flat, a little up about a third of a percent. Coming up on overtime, medical device maker striker struck by major Iranian cyber attack, and our next guest warns it won't be the last. How quickly could this war turn into cyber warfare? And how can companies prep? We'll dive into that next on Overtime. Welcome back to closing bell overtime. The threat of cyber attacks on U.S. companies taking center stage as an Iranian hacker group

takes credit for an attack that crippled medical device maker Stryker. It is the first major Iran-linked cyber attack of the war. Stryker says it has been contained to the wiping of some employee devices and that no internal infrastructure has been compromised. The cybersecurity trade in rally mode on concerns that these attacks could intensify the hack ETF up nearly 7% just this month. For more on the potential threat to American companies and infrastructure posed by Iranian cyber warfare, let's bring in Center for Strategic and International Studies Deputy Director and Senior Fellow, Lauren Williams. Lauren, great to have you with us.

Thank you for having me. As you see the war unfold and as you see the U.S. touting winds like taking out their Navy and really decimating communications, It seems like we're at a point where Iran will really lean on cyber warfare because they can't have a symmetric military response to what the U.S. is doing. Yes, that's correct. So we have obviously seen over the last week and a half massive kinetic strikes that have decapitated the top of the Iranian regime. So certainly we would expect as those kinetic strikes take out other capabilities that Iran might leverage its. already known to be fairly sophisticated capabilities in cyberspace, including by leveraging proxy groups outside of the country. And that's what they really have a lot of, and we think about

Iran and we think about Iranian cyber attacks from there to the U.S., but these hacktivists are around the world, and they are proxies and they just need to be activated. So as you look around the world, what do you think are the greatest targets? We've already seen them, you know, know that their leverage exists in stopping oil flow. But there are other leverage points, I'm sure, that they look at particularly when it comes to the United States. That's right. So Iran has in the past, both through state-sponsored actors, but also these linked hacktivist groups targeted U.S. critical infrastructure. Back in 2023, we saw a targeting of a water utility here in the United States that was linked to another conflict ongoing at that time. But now and today, we do see,

we would expect Iran to have interest in targeting that type of infrastructure again here in the United States. There's been chatter around financial services. Of course, defense industrial base linked companies to the U.S. and in Israel as well, there might be interest in targeting. And Lauren, what, if anything could be done at this point, aside. from just, I guess, the usual vigilance if you're a company or your organization and you're looking out for these things? So that's certainly right. It's paying attention to the escalation of the conflict and the fact that this conflict

has continued for several days and weeks now after February 28th. And again, as Iran's kinetic capabilities are being downgraded, noting that there might be more of an interest on the Iranian regime side to leverage. these cyber capabilities that they can activate outside of the country. So that's exactly right. Companies should be thinking about their cybersecurity best practices. They should be paying attention to any anomalies on their systems. And then also they should know who to contact in the federal government.

Obviously, the cybersecurity and infrastructure security agency operated out of the Department of Homeland Security is a key point of contact with the FBI as well. What companies and what individuals do from this point on is very important, Lauren. But can you give us some background on some of the past cyber attacks that we've seen? Because as I understand it, I mean, these hacktivists, these hackers have probably gotten into systems through backdoors or whatnot years before. And they lie and wait and they wait until they're activated. They just wait for the right time. So that's exactly right.

when it comes to Iran's capabilities, we have seen Iran and Iran-affiliated actors conduct what are called distributed denial of service attacks, conduct wiper attacks where they wipe systems, these sorts of things, as well as ransomware, to encrypt data and make it difficult for for companies to access their own data without paying a ransom. So these are the sorts of attacks that we have seen in the past. and then again, targeting a specific critical infrastructure here in the United States. And in terms of the offensive efforts by the U.S. and Israel on Iran, do we know if any of their cyber capabilities have been targeted or compromised? So that's a key element of the story as well. We've talked about Iran's capabilities, but of course the United States has formidable cyber capabilities.

And one of the key changes, I will call it, in U.S. Cyber Strategy, the administration just released its national cybersecurity strategy last Friday. But tying into that what they were saying after the Venezuela attacks and also following the February 28th attacks, this administration is very much publicly messaging that the United States has substantial cyber offensive capabilities. So we saw in a press briefing right after the Iran strikes began, the chairman of the Joint Chiefs of Staff talk about U.S. Cyber Command as a first mover in this conflict. He also talked about the fact that U.S. Cyber Command or U.S. cyber operations helped degrade, disrupt, and deny Iranian regime's abilities to communicate and to respond to the attacks at that time. So certainly this administration is very focused on offensive systems. cyber operations and making sure that our adversaries know what our capabilities are.

And last question, Lauren, I mean, the internet blackout that Iran has imposed in its own country starting February 28th, does that limit U.S. and Israeli capabilities in terms of launching its own cyber attack into the country? So that's right. It plays a double-edged sword. So the Iranian regime-imposed blackout that has had Iranian citizens has dropped their connectivity to about 1% of normal levels. It has two implications.

So as you noted, it means that Iran is in some ways less susceptible to cyber attacks coming from the outside, but it also does limit the regime's ability to launch cyber attacks. So there's a double-edged sword. And then a second dynamic we're seeing is both citizens and maybe even cyber actors leveraging Starlink and satellite capabilities. Lauren, I really appreciate you talking us through it all. Thank you. Thank you. All right ahead, the Senate passes the largest housing affordability bill in 30 years.

We'll look at what's next and what it could mean for the housing market. And as we hit to a break, take a look at some names hitting 52-week lows today, including Paramount Skydance, Lenar, Brown Foreman, Campbell Soup, and McCormick. Closing Bell Overtime Live from the NASDAQ market site. We'll be right back. The Senate passing a major housing affordability bill. Let's get to Emily Wilkins for the details. Emily.

Hey, Melissa, well, yeah, the Senate passed this major housing affordability. bill, 89 to 10. So very strong bipartisan support here. Now this technically is supposed to head to the house, but there is a bit of an uphill climb, and that's because there's a concern with a specific provision in this bill backed by President Donald Trump. Now, this provision would ban private equity, major investors, and companies from buying more single-family homes if they already own 350 or more. It would allow companies to actually build and develop new homes, but it would, would require those companies to actually sell those homes after seven years. And that's raised a lot of concern about what this is going to mean for capital when it comes

to building, as well as concerns about what it's going to mean for the bill to rent market. Senator Brian Schatz, Democrat from Hawaii, was one of the few Democrats who actually voted against this bill, and he laid out his reasoning on the Senate floor yesterday. The problem is that it was written in such a way that it was trying to capture the hedge fund problem, but they wrote it wrong. They wrote it wrong. And so the definition of institutional investor says, essentially, anyone who owns and operates more than 350 units to rent, that's bananas. Shads isn't the only one with concerns. A number of housing, rental, real estate associations have come to senators and members of Congress saying they have concerns

with this provision in the bill. And I've spoken with numerous members of the House, including members of leadership who say that they also have concerns. Now, the House passed their own bipartisan bill just the other month, does not have the investment provision in it. Lawmakers say they're going to have to get together and negotiate. Senators, meanwhile, are hoping that President Trump puts the pressure on the House to just move through the Senate bill. It's really critical for both parties, given the amount that affordability is going to be playing a role in these midterms. And this is one of the bills. It's close to passing, but you definitely have a big hurdle here before it gets to the end. Gus? Emily, thank you. Emily Wilkins. All right, so we have

Adobe doing poorly in the after our market session. IGV will be interesting to watch tomorrow. It is held above its lows, but definitely it didn't trade all that well today. So that's one of the things we're looking at. We are going to get, what, PCE? Yes. Inflation, if that matters at all. And then really it's a matter of whether the market response to the fact that we finally did close at a new low and going into a weekend. In a new high. No less. Exactly. So we'll see if anybody's brave enough.

That does it for overtime. Fast money starts right after this quick break.