Closing Bell - Closing Bell Overtime: Strong Earnings Season Rolls On 5/4/26

Episode Date: May 4, 2026

Markets push through a busy earnings slate as investors weigh strong results and rising expectations. Dan Skelly, Managing Director at Morgan Stanley Wealth Management, explains why the bar for earnings beats remains high and what it means for stocks from here. Instant analysis and reaction to Palantir earnings with Gil Luria of D.A. Davidson. Dennis Geiger of UBS looks ahead to McDonald’s earnings and explains why he sees an attractive risk reward setup. Our Angelica Peebles reports on the next phase of the weight loss drug story as pills from Eli Lilly and Novo Nordisk begin to reshape the GLP-1 market and expand demand. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing an end to the training day at the N.YSC. JPMorgan asset management ringing the closing bell and at the NASDAQ for OVL doing the honors. Welcome to closing bell over time. We're alive from studio be at the NASDAQ market site. I'm Melissa Lee along with Mike Santoli. The Dow down about 550 points. It's worst day and more than a month. Smaller losses for the S&P 500 and NASAC much more in the market straight ahead.

On our radar at the close, GameStop makes a bid for eBay. We'll play you some of the interview with Ryan Cohen that has a lot of people on the street talking. plus Amazon announcing new supply chain plans and tanking the transports in the process. Big losses on the day for FedEx and UPS. And it's another big afternoon of earnings. Palantir due out in just a few minutes. We are also expecting to hear from on semiconductor, Pinterest, and Paramount Skydance. But it was, Mike, an interesting market day.

We had a lot of sort of geopolitical headlines to deal with. And on WTI, it is worth noting that we are in Iran-conflict era highs at WTI. And that seemed to sort of be a demarcation. We got yields up. and the rest followed. For sure. You could actually detect the market, especially in the morning, kind of looking for permission to ignore the oil price and what's happening with yields.

And then it just kind of pushed to a level where it wasn't quite possible, especially because not all of tech was able to really get any upside thrust. It was really just the memory stocks and a few others. And I do think it's relevant to say that industrials, partly its transports, but also consumer cycles and also banks have actually struggled here. They're 5, 7, 10% below their highs, even as the S&P 500 is at a high. It's not any fatal thing. It's not like rates are at some tripwire, but you have to be aware that we've come a long way in a short period of time.

And what is the next catalyst now that most of earnings have gone through? It's a good point. I feel like we've kind of just taking credit for that. And now it's like, all right, the S&P multiple went from 23 to 19. It's back to 21. Are we going all the way back to 23 or not? Well, let's get to Christina Parts-Nevelas for a look at some of the stocks making big moves today. Christina. Yeah, and let's start with the fact that not all chips were created equal today,

and you saw it really with the subsectors. AI compute names like AMD closed lower ahead of earnings out tomorrow. Qualcomm saw some profit taking after last week's run on news. It'll ship data center chips to a hyperskiller ahead of schedule, but memory kept running today. Micron and S&P 500 leader, the market is really just waking up to the idea that Micron and Sandisk aren't just cyclical chip stocks anymore. Their core AI infrastructure names and supply for that memory is extremely tight. For example, Sandisk closing almost 6% higher after Bernstein hiked its target to $1,700 from $1,250, citing a shift towards longer-term contracts as pricing power. That divergence really showed up between software and chips today, too. The IGV versus the socks

ETFs are a great example. Oracle and Palantir, some of the software names higher on the AI software trade. CMI Modi is going to have Palantir. Switching gears, crypto names also caught a bid today. Coinbase and Circle higher after Senators reached a deal on stable, rewards. Bitcoin also topping about $80,000 overnight, not there right now. On the downside, Norwegian cruise line had its worst day since March after cutting its full year outlook, and that's weighed on a lot of the other cruise lines. And despite all the movers or the upside thrust, as Mike put it, energy was the only S&P 500 sector to close in the green oil higher because of all the hormonous tensions. Guys? Christina, thanks, Christina Parts and Nevelas. Oil rising today on new attacks

in the Middle East, despite the United States efforts to reopen the Strait of Hormuz. Pippa Stevens joins us with the very latest. Pippa. Well, Melissa, oil prices did jump after Iran launched missiles at the UAE, with the country's Ministry of Foreign Affairs, calling it a dangerous escalation and saying the country reserves its full

and legitimate right to respond. That comes after the U.S. announced Project Freedom, which would guide ships out of the restricted waterways. Now, Maersk, confirming just now that one of its vessels did exit the Persian Gulf earlier today, accompanied by U.S. military assets. But there does still seem to be reluctance to cross, especially since we did see

renewed attacks on ships today, with Bimco saying the overall security situation is unchanged. Now, in the U.S., the national average for a gallon of gas, now just four cents shy of $4.50, and Eurasia Group says $5 by June, if not sooner, is now unavoidable, especially since prices usually rise from May to July as demand increases. The global oil stockpiles are now approaching their lowest level since satellite data became available in 2018, according to Goldman, with the firm saying that the depletion speed is more concerning than the aggregate level. Guys? It's not just the depletion overseas.

It's also the depletion here in the United States, in part because we are exporting a lot of our own oil to other countries that desperately need it. Right, Pip, I mean, that cushion that we have here may be less of a cushion than we all think it is right now. That's right. So last week, our experts were 14.2 million barrels per day. that was by far a record. Considered that last year in 2025, the average was about 10.5 million barrels per day. And we are especially seeing those draws on the product side. So gasoline inventories 15% below their pre-war level and diesel inventories are 17% below theirs. And of course, it is those products that the world is short. And so with Asia unable to get a lot of their feedstock now

from the Middle East, they are instead turning to U.S. exports. And so those are increasing. And of course, this is now coinciding just as the heavy summer. demand of driving season is picking up. So those cushions we had in place in this, you know, sort of shoulder season are now rapidly leaving. And so those export numbers will become key to watch. And of course, the industry does not want any sort of ban in place. But the more exports rise and the higher prices go, that will certainly become a political headwind. PIPA thanks, PIPA Stevens. PIPA earnings are out. Let's get to see Moody who's got the number. Seema. Hey, Melissa, a very strong beat and raised from Pallenteer. Revenue of 1.633.

billion dollars that represents an 85% year-over-year jump, its highest ever growth rate, fueled by U.S. government contracts, including the Department of Defense and Intelligence agencies amid the ongoing war with Iran. Palantir is raising its full-year revenue guidance by over a billion dollars. And in a letter to shareholders, Palantir's CEO Alex Carp said there is really nobody making the case that the U.S. military should have second-rate AI capabilities or lackluster software separately seemed to see spoke to Alex Carp. And he shared, quote, I'm planning to grow 100% next year, that's sales growth, and we're doing it with less people than we have. CARP ads, we have more free cash flow this year than revenue last year on Palantir,

losing highly skilled engineers to open AI. A story we reported last week, Carp, acknowledged that, quote, it's a very competitive labor market, but also said they see their growth story accelerating with fewer people. He did express frustration around Europe's saying the real challenge for the business is that in Europe, they view AI as some witchcraft, and that's a problem for the West. Overall guys in my conversation where Carpa was really struck by his bullish tone, and he said his message to the retail investor communities, you guys somehow have been ahead of everyone,

and he continues to the tune of 100% growth in the U.S. this year, and he says, I kind of believe that's going to go for a long period of time. Seema, I mean, right now, I'm just looking at the projected revenue consensus for next year. And, well, I don't know if he means December of 2026th year doubling, but that's not what the contendez has, right? It's basically going from $4.5 billion to $7.2 billion. I mean, does that mean, guidance is they're going to double revenue? I mean, he's basically referring to his goal of U.S. revenue in 2026 and 2027.

He says it's in the 100% growth range now. We will look for his commentary on the earnings call, which begins at 5 p.m. Eastern clarity on where he sees this growth story continuing as both commercial and government revenue continues to take off. guys. All right, Seema, thank you. Paramount Skydance earnings also out. Julia Borsden has the numbers, Julia. Paramount beating on the top and bottom lines, adjusted earnings of 23 cents per share ahead of estimates of 15 cents. That's the company's first adjusted profit in three quarters. Revenues of $7.35 billion beating estimates of $7.28 billion. The company also reaffirming its full year

revenue and adjusted EBITA guide and reiterating its previous statement that they do expect revenues to be weighted towards the second half of the year. Second quarter revenue guidance in a range below Wall Street estimates, the company is saying it expects healthy underlying subscriber growth for Paramount Plus, but says that number will be flattished from the first quarter due to the exit of international hard bundle subscribers. Paramount's guidance saying they've made significant progress towards closing the acquisition of Warner Brothers Discovery by the end of the third quarter, and as you can see, shares now up about 4%. Melissa? Julia, thanks, Julia Borson. We want to get to on semiconductor earnings. They are out.

Christina Parts and Nevelas has the numbers. Christina. Yeah, so it's a beat on the top and bottom line. So specifically 64 cents. That's a four cent beat with revenues of 1.5 billion dollars for that same quarter Q1 non-gap gross margins came in at 38 and a half. So that was in line. But more specifically, this company is extremely exposed to the auto market. We saw from competitors like Texas Instruments and XPI that auto was improving. In this case, auto fell light for the company compared to estimates at $737 million. However, industrial revenue did improve, or I should say, beat estimates at $540 million. They also said their data center revenue doubled year over year because of broader adoption. However, this is a much smaller portion of their business. Their Q2 EPS guide came in higher, 65 to 77 cents.

Q2 revenue guide was also higher. Their Q2 non-gap gross margins. the range that they gave was also higher in the company. In the release, the CEO saying that the demand strengthened in the quarter, we've moved beyond the cyclical drop onto a path to recovery. So, you know, somewhat positive reaction. The stock, though, is down about 5%. Keep in mind that it did run up 65% just in the last month.

So it could just be some profit-taking, guys. All right, Christina, thank you. Three quarters of the S&P 500 companies have reported earnings so far, with 71% beating on EPS. That's the best rate since, Q2 of 2025, and EPS growth is now up 16% year over year. The strong earnings backdrop offsetting disruptions from oil and geopolitics, but will it be enough to keep the U.S. indexes at records?

Joining us now is Morgan Stanley Wealth Management head of market research and strategy, Dan Skeli. Dan, good to see you. Great to be back. Thanks. So markets actually kind of traced out the textbook response to a geopolitical shock in some ways, right? Tracking the average.

You're down high single digits, recovered most of it, even. before kind of the world is settled down fully. Where does it go from here, I guess, is the question. Since there wasn't a whole lot of pain toward the downside, what's the gain look like? Yeah, and it was quick, too. We recovered quickly. So look, what we've been telling folks is that over the last year or so, you've seen this pattern before where last year in April with Liberation Day, big sell-off, big recovery,

now with the war in the Middle East, it's almost like the market is treating geopolitics and some of these domestic policy shocks like pop-up ads along a longer winding narrative. centered on AI, the economy, and resilient earnings. And we just saw, as you said, almost 80% of earnings report, pretty strong beat so far. I mean, that's totally true, although, you know, last year was down 20% and it seemed like we had recession fears flaring up. And it really created a liquidation type event that fueled the next few months of upside. This time, as you suggest, we have a little wobble. It's been a narrow recovery. I think only 20% of S&P stocks have outperform the index over the last month. So what does that tell you in terms of where you might

want to concentrate? Yeah, so that's a great point. It was historically difficult to beat the market over the last month or so. And so what we're telling votes, Michael, is in that next couple of months, we want to rebounds portfolios. We've got potentially another pop-up ad coming up with the midterm cycle later this fall. We're going to see the new Fed chair tested, no doubt, as that almost always happens by interest rates. And then, look, there may be one final act to go in terms of the saga in the Middle East. And as one of your shows had earlier, a CEO of a leading integrated oil company said the March and April energy price environment was still cushioned by the fact that ships were still on the water. So let's foresee that going away. So we want to rebalance portfolios

back into some maybe lower beta, more defensive type areas like health care and staples that have lag recently. So what will be the primary? I mean, you mentioned some of the pop-ups that are going to come in the next few months. At what point do we really, focus in on the high price of oil because at the start of the conflict, everybody said five to six weeks, you know, if the straight remains closed, it's going to be disastrous. That timeline keeps getting pushed out, pushed out, pushed out, and now we're staring down the barrel to June. And it's a much different story here. As you mentioned, there's not going to be any cushion of inventory anywhere either on the waters or on land. So then what? So that's an excellent point.

And look, what we would say is in the past, we've seen this case-shaped phenomena really take the lion's share of spending, right? So higher income folks have really held up well. But look, those are also the same, typically the same cohort of people who pay more attention to politics. So then you come into this, again, difficult window ahead of the midterm cycle. So look, what we would say is we think, again, a final act is different from a whole new theater opening. we would say absent oil going to new highs, $120, $150, $150, we can still largely digest the $100 level. And we think that range might kind of vacillate between $80 and $100. But at the $100 level, you still have enough high-income spending to offset what will be a deeper hit to the broader consumer.

We've been talking a bit about this move in yields. That as well. I mean, it's not very high historically. We've been here not that long ago. But I wonder if that's another kind of turn of the dial that creates some friction. No doubt. And we're seeing five-year, five-year break-evens on inflation break out to five-year highs as well. The Fed is in a situation where its goal remains 2%. We still have some cushion definitely to ease if we see a growth scare eventually. And just to be fair, it looks nothing in context like 2022 when you were battling 9% historic inflation with zero rates. So we don't want to get that kind of worried as well. But no doubt, we want to keep an eye on inflation. And like I said earlier, new Fed chair. are almost always tested by interest rates. Yeah, it's going to be a tough environment for the Fed to be in, for Kevin Warsh to take over.

I mean, we have oil prices so high, we have inflation kind of sticky. And I'm just wondering, are you baking into your baseline scenario that we will have higher for longer, whether it be inflation or rates or down the line? I mean, that is going to be friction that continues, no? We've been in that higher longer for camp for some time. And as such, as part of a broader asset allocation, we've been recommending real assets, which have held up really well and helped, actually be diversifiers against S&P correlations in an environment where fixed income hasn't typically

done that job as well. We just want to quickly show the closing bell over at the CBO, the closed regular options trading, meeting and incentives worldwide ringing that bell in Chicago. And what should investors be expecting from this point on in terms of returns? I mean, I know it's not like it always reverts to the mean, but if you just look at, you know, since 2009, you know, we're mid-teens, I think, in terms of annualized appreciation, the average. We've been on an unbelievable run, the last five years since COVID, the last 15 years since 08. And so what we've been saying is to expect some moderation in that, where earnings growth actually picks up the baton in terms of total return contribution. And frankly, Michael,

as you've seen the last several years, earnings growth has contributed more to total return. Last year, we were up 18 percent total return in the S&P, while the multiple remained flat the entire time. So earnings have been starting to take a bulk of the return, which creates a more idiosyncratic and stock picking type environment. Dan, good to see you. Thank you. Good to see as well. Hans Skelly. Pinterest earnings are out. Let's get to Julia Borson, who's got those. Julia.

Pinterest shares up 16% on a beat. This comes after Pinterest missed earnings estimates for the past five quarters. Now Pinterest beating on both the top and bottom line with 27 cents and adjusted earnings for share. That's four cents ahead of expectations. Well, revenues of $1.01 billion topped estimates of 966 minutes. million. Multi-active users of 631 million are right in line with expectations and a record for the company. And the company's guidance is stronger than expected for the quarter revenue, guiding to revenues in a range of 1.13 to 1.15 billion ahead of estimate of 1.1 billion. Also guiding to adjusted quarterly EBITDA, a range with a midpoint of 266 million.

That's 5 million ahead at the consensus. So Q2 guidance better than expected. And we see the stock now up not. 19 and a half percent. Melissa? Yeah, Julia, thanks. We should note it has about a 13 percent short interest. Yeah, and the stock was really beaten up. Yeah. It's actually pretty low. And also like 10 times earnings. I mean, it really got cheap. It's kind of been, you know, almost considered no growth for a while. Palantir earnings just out of beat in the top and the bottom line. Strong guidance as well. The stock volatile around it will get into reaction to those numbers. Next, you're watching closing bell overtime, live from the NASAC market site. And to the training day at the N.I.S.C. JPMorgan asset management ringing the closing bell and at the NASDAQ for OVL doing the honors. Welcome to closing bell overtime. We're live from the studio be at the NASDAQ market site. I'm Melissa Lee, along with Mike Santoli.

The Dow down about 550 points. It's worst day in more than a month. Smaller losses for the S&P 500 in NASAC, much more in the market straight ahead. On our radar at the close, GameStop makes a bid for eBay. We'll play you some of the interview with Ryan Cohen that has a lot of people on the street talking. Plus Amazon announcing new supply chain plans and tanking the transports in the process. Big losses on the day for FedEx and UPS. And it's another big afternoon of earnings. Palantir due out in just a few minutes. We are also expecting to hear from on semiconductor, Pinterest, and Paramount Skydance. But it was, Mike, an interesting market day. We had a lot of sort of geopolitical headlines to deal with. And on WTI, it is worth noting that we are in Iran conflict era highs. Yes.

And that seemed to sort of be a demarcation. We got yields up and the rest followed. For sure. You could actually detect the market, especially in the morning, kind of looking for permission to ignore the oil price and what's happening with yields. And then it just kind of pushed to a level where it wasn't quite possible, especially because not all of tech was able to really get any upside thrust. It was really just the memory stocks and a few others. And I do think it's relevant to say that industrials and partly its transports, but also consumer cycles and also banks have actually struggled here. They're 5, 7, 10% below. They're highs, even as the S&P 500 is at a high. It's not any fatal thing.

It's not like rates are at some tripwire, but you have to be aware that we've come a long way in a short period of time. And what is the next catalyst now that most of earnings have gone through? It's a good point. I feel like we've kind of just taken credit for that. And now it's like, all right, the S&P multiple went from 23 to 19. It's back to 21. Are we going all the way back to 23 or not?

Well, let's get to Christina Parts Nevelas for a look at some of the stocks making big moves today. Christina. Yeah, and let's start with the fact that not all chips were created equal today, and you saw it really with the subsectors. AI compute names like AMD closed lower, ahead of earnings out tomorrow. Qualcomm saw some profit taking after last week's run on news. It'll ship data center chips to a hyperscale or ahead of schedule, but memory kept running today. Micron and S&P 500 leader, the market is really just waking up to the idea that Micron and Sandisk aren't just cyclical chip stocks anymore. Their core AI infrastructure names and supply for that memory is extremely tight. for example, Sandisk closing almost 6% higher after Bernstein hiked its target to $1,700 from $1,250, citing a shift towards longer-term contracts as pricing power.

That diversion really showed up between software and chips today, too. The IGV versus the SOXs at ETFs are a great example. Oracle and Palantir, some of the software names higher on the AI software trade. CMMMODE is going to have Palantir. Switching gears, crypto names also caught a bid today. Coinbase and Circle higher after Senators reached a deal on stable corn rewards. coin also topping about $80,000 overnight, not there right now. On the downside, Norwegian cruise line had its worst day since March after cutting its full year outlook, and that's weighed

on a lot of the other cruise lines. And despite all the movers or the upside thrust, as Mike put it, energy was the only S&P 500 sector to close in the green oil higher because of all the Hormuz tensions. Guys? Christina, thanks, Christina Ports Nevelas. Oil rising today on new attacks in the Middle East, despite the United States efforts to reopen the Strait of Hormuz. Pippa's Stevens joins us for the very latest. Pippa. Well, Melissa, oil prices did jump after Iran launched missiles at the UAE with the country's Ministry of Foreign Affairs, calling it a dangerous escalation and saying

the country reserves its full and legitimate right to respond. That comes after the U.S. announced Project Freedom, which would guide ships out of the restricted waterways. Now, Maersk confirming just now that one of its vessels did exit the Persian Gulf earlier today accompanied by U.S. military assets. But there does still seem to be reluctance to cross a space. especially since we did see renewed attacks on ships today, with Bimcoe saying the overall security situation is unchanged.

Now, in the U.S., the national average for a gallon of gas, now just four cents shy of $4.50, and Eurasia Group says $5 by June, if not sooner, is now unavoidable, especially since prices usually rise from May to July as demand increases. The global oil stockpiles are now approaching their lowest level since satellite data became available in 2018, according to Goldman, with the firm saying that the depletion speed is more concerning than the aggregate level. Guys? It's not just the depletion overseas.

It's also the depletion here in the United States, in part because we are exporting a lot of our own oil to other countries that desperately need it. Right, Pip, I mean, that cushion that we have here, maybe less of a cushion than we all think it is right now. That's right. So last week, our experts were 14.2 million barrels per day. That was by far a record. considered that last year in 2025, the average was about 10.5 million barrels per day. And we are especially seeing those draws on the product side. So gasoline inventories 15% below their pre-war level and diesel inventories are 17% below theirs. And of course, it is those products that the

world is short. And so with Asia unable to get a lot of their feedstock now from the Middle East, they are instead turning to U.S. exports. And so those are increasing. And of course, this is now coinciding just as the heavy summer demand driving season is picking, up. So those cushions we had in place in this sort of shoulder season are now rapidly leaving. And so those export numbers will become key to watch. And of course, the industry does not want any sort of ban in place. But the more exports rise and the higher prices go, that will certainly become a political headwind. PIPA thanks, PIPA Stevens. PIPA earnings are out. Let's get to see Modi who's got the number.

Seema. Hey, Melissa, a very strong beat and raise from Pallentier. Revenue of $1.63 billion. That represents an 85% year-over-year jump, its highest-ever-growth rate, fueled by U.S. government contracts, including the Department of Defense and Intelligence agencies amid the ongoing war with Iran. Palantir is raising its full-year revenue guidance by over a billion dollars. And in a letter to shareholders, Palantir CEO Alex Carp said there is really nobody making the case that the U.S. military should have second-rate AI capabilities or lackluster software. Separately seemed to see spoke to Alex Carp, and he shared, quote,

I'm planning to grow 100% next year, that's sales growth, and we're doing it with less people than we have. Carp ads, we have more free cash flow this year than revenue last year. On Palantir, losing highly skilled engineers to open AI a story we reported last week. Carp acknowledged that, quote, it's a very competitive labor market, but also said they see their growth story accelerating with fewer people. He did express frustration around Europe's saying the real challenge for the business is that in Europe, they view AI as some witchcraft, and that's a problem. for the West, but overall guys in my conversation where Carpa was really struck by his bullish tone, and he said his

message to the retail investor communities. You guys somehow have been ahead of everyone, and he continues to the tune of a hundred percent growth in the U.S. this year, and he says, I kind of believe that's going to go for a long period of time. Seema, I mean, right now, I'm just looking at the projected revenue

consensus for next year. And, well, I don't know if he means December of 2026 year doubling, but that's not what the consensus has, right? It's basically going from 4.5 billion to 7.2 billion. I mean, does that mean, guidance is they're going to double revenue? I mean, he's basically referring to its goal of U.S. revenue in 2026 and 2027. He says it's in the 100% growth range. Now, we will look for his commentary on the earnings call, which begins at 5 p.m. Eastern clarity

on where he sees this growth story continuing as both commercial and government revenue continues to take off, guys. All right, Seema, thank you. Paramount's guidance earnings. Also, Julia Borsden has the numbers, Julia. Paramount beating on the top and bottom lines, adjusted earnings of 23 cents per share ahead of estimates of 15 cents. That's the company's first adjusted profit in three quarters. Revenues of $7.35 billion, beating estimates of $7.28 billion. The company also reaffirming its full year revenue and adjusted EBITA guide and reiterating its previous statement that they do expect revenues to be weighted towards the second half of the year. Second quarter revenue guidance in a range below Wall Street estimates, the company saying it expects healthy underlying subscriber growth for Paramount Plus, but says that number will be flattished from the first quarter due to the exit of international hard bundle subscribers. Paramount Skydance saying they've made significant progress towards closing the acquisition of Warner Brothers Discovery by the end of the third quarter.

And as you can see, shares now up about 4%. Melissa? Julia, thanks, Julia Borson. We want to get to on semiconductor earnings. They are out. Christina Parks and Nevelas has the numbers. Christina. Yeah, so it's a beat on the top and bottom line. So specifically 64 cents.

That's a four cent beat with revenues of $1.51 billion for that same quarter, Q1N, non-gap. Gross margins came in at 38 and a half, so that was in line. But more specifically, this company is extremely exposed to the auto market. We saw from competitors like Texas Instruments and XPI that Auto was improving. In this case, auto fell light for the company compared to estimates. at $737 million. However, industrial revenue did improve, or I should say, beat estimates at $540 million. They also said their data center revenue doubled year over year because of broader adoption.

However, this is a much smaller portion of their business. Their Q2 EPS guide came in higher, 65 to 77 cents. Q2 revenue guide was also higher. Their Q2 non-gap gross margins. The range that they gave was also higher. And the company in the release, the CEO saying that the demand strengthened in the quarter, we've moved beyond the cyclical drop onto a path to recovery. So, you know, somewhat positive reaction.

The stock, though, is down about 5%. Keep in mind that it did run up 65% just in the last month. So it could just be some profit taking, guys. All right, Christina, thank you. Three quarters of the S&P 500 companies have reported earnings so far with 71% beating on EPS. That's the best rate since Q2 of 2025. and EPS growth is now up 16% year over year. The strong earnings backdrop offsetting disruptions from oil and geopolitics,

but will it be enough to keep the U.S. indexes at records? Joining us now is Morgan Stanley Wealth Management head of market research and strategy, Dan Skeli. Dan, good to see you. Great to be back, thanks. So markets actually kind of traced out the textbook response to a geopolitical shock in some ways, right? Tracking the average, you're down high single digits,

recovered most of it even before kind of the world. has settled down fully. Where does it go from here, I guess is the question, since there wasn't a whole lot of pain toward the downside, what's the gain look like? Yeah, and it was quick, too. We recovered quickly. So look, what we've been telling folks is that over the last year or so, you've seen this pattern before where last year in April with Liberation Day, big sell-off, big recovery, now with the war in the Middle East, it's almost like the market is treating geopolitics and some of these domestic policy shocks like pop-up ads along a longer winding narrative centered on AI, the economy, and resilient earnings. And we just saw, as you said,

almost 80 percent of earnings report, pretty strong beat so far. I mean, that's totally true, although, you know, last year was down 20 percent. And it seemed like we had recession fears flaring up. And it really created a liquidation type event that fueled the next few months of upside. This time, as you suggest, we have a little wobble. It's been a narrow recovery. I think only 20% of S&P stocks have outperformed the index over the last month. So what does that tell you in terms of where you might want to concentrate? Yeah, so that's a great point. It was historically difficult to beat the market over the last month or so.

And so what we're telling votes, Michael, is in that next couple of months, we want to rebalance portfolios. We've got potentially another pop-up ad coming up with the midterm cycle later this fall. We're going to see the new Fed chair tested, no doubt, as that almost always happens by interest rates. And then, look, there may be one final act to go in terms of the saga. in the Middle East. And as one of your shows had earlier, a CEO of a leading integrated oil company said the March and April energy price environment was still cushioned by the fact that ships

were still on the water. So let's foresee that going away. So we want to rebalance portfolios back into some maybe lower beta, more defensive type areas like health care and staples that have lag recently. So what will be the primary? I mean, you mentioned some of the pop-ups that are going to come in the next few months. At what point do we really, focus in on the high price of oil because at the start of the conflict, everybody said five to six weeks, you know, if the straight remains closed, it's going to be disastrous. That timeline keeps getting pushed out, pushed out, pushed out, and now we're staring down the barrel to June. And it's a much different story here. As you mentioned, there's not going to be any cushion

of inventory anywhere, either on the waters or on land. So then what? So that's an excellent point. And look, what we would say is in the past, we've seen this case-shaped phenomena really take the lion share of spending, right? So higher income folks have really held up well. But look, those are also the same, typically the same cohort of people who pay more attention to politics. So then you come into this, again, difficult window ahead of the midterm cycle. So look, what we would say is we think, again, a final act is different from a whole new theater opening. We would say absent oil going to new highs, 120, 150, we can still largely digest the $100 level. And we think that range might kind of vacillate between 80 and 100, but at the $100 level, you still have enough

high-income spending to offset what will be a deeper hit to the broader consumer. We've been talking a bit about this move in yields. That as well, I mean, it's not very high historically. We've been here not that long ago. But I wonder if that's another kind of turn of the dial that creates some friction. No doubt. And we're seeing five-year, five-year break-evens on inflation break out to five-year highs as well. The Fed is in a situation where its goal remains 2%. we still have some cushion definitely to ease if we see a growth scare eventually. And just to be fair, it looks nothing in context like 2022 when you were battling 9% historic inflation with zero rates. So we don't want to get that kind of worried as well.

But no doubt, we want to keep an eye on inflation. And like I said earlier, new Fed chairs are almost always tested by interest rates. Yeah, it's going to be a tough environment for the Fed to be in for Kevin Warsh to take over. I mean, we have oil prices so high, we have inflation kind of sticky. And I'm just wondering, are you baking into your baseline scenario that we will have higher for longer, whether it be inflation or rates or down the line? I mean, that is going to be friction that continues, no? We've been in that higher longer for camp for some time.

And as such, as part of a broader asset allocation, we've been recommending real assets, which have held up really well and helped actually be diversifiers against S&P correlations in an environment where fixed income hasn't typically done that job as well. We just want to quickly show the closing bell over at the CBO, the closed of regular options trading, meeting and incentives worldwide ringing that bell in Chicago. And what should investors be expecting from this point on in terms of returns? I mean, I know it's not like it always reverts to the mean, but if you just look at, you know, since 2009, you know, we're mid-teens, I think, in terms of annualized appreciation in the S&P.

We've been on an unbelievable run, the last five years since COVID, the last 15 years since 2008. And so what we've been saying is to expect some moderation in that, where earnings growth actually picks up the baton in terms of total return contribution. And frankly, Michael, as you've seen the last several years, earnings growth has contributed more to total return. Last year we were up 18 percent total return in the S&P, while the multiple remained flat the entire time. So earnings have been starting to take a bulk of the return, which creates a more idiosyncratic and stock picking type environment. Dan, good to see you. Thank you. Good to see as well.

Yes, Kelly. Pinterest earnings are out. Let's get to Julia Borson, who's got those. Julia. Pinterest shares up 16% on a beat. This comes after Pinterest missed earnings estimates for the past five quarters. Now Pinterest beating on both the top and bottom line with 27 cents and adjusted earnings for share. That's four cents ahead of expectations, while revenues of $1.01 billion topped estimates of $966 million. Multi-active users of 631 million are right in line with expectations and a record for the company. And the company's guidance is stronger than expected for the quarter revenue, guiding to revenues in a range of 1.13 to 1.15 billion ahead of $1.15 billion, also guiding to adjusted quarterly EBITAN, a range with a midpoint of $266 million. That's $5 million ahead of the consensus. So Q2 guidance better than expected. and we see the stock now up 19.5%. Melissa?

Yeah, Julia, thanks. We should note it has about a 13% short interest. Yeah, and the stock was really beaten up. It's actually pretty low. And also like 10 times earnings. I mean, it really got cheap. It's kind of been, you know, almost considered no growth for a while. Palantir earnings, Jess out of being on the top and the bottom line, strong guidance as well. The stock volatile around it will get into reaction to those numbers.

Next, you're watching closing bell overtime, live from the NASAC market site. Check out chairs of Iran jumping nearly 10% today. This is a Bitcoin miner-turned data center player. It announced the energization of its data centers in Texas, saying it's connected to the grid, giving it legitimacy as able to meet power demand from AI. The stock is up more than 600% in the last year. Let's get another check on Palantir Q1 numbers are out moments ago. Stock bouncing around in overtime here, it is just higher by a fraction of percent.

The company giving Strong Full Year guidance, CEO, Alex Karp, saying in the release, its U.S. business had its highest ever year-over-year growth. Joining us now is D.A. Davidson, head of technology research, Gil Loria, he's got a neutral rating on Palantir. Gil, great to have you with us. What's your take on the numbers? It's remarkable. We're running out of superlatives for Palantia. They just grew 85% at 60% operating margins at scale, at a $7 billion run rate. Nobody can do that. There are no other companies that are growing at these rates at this level of profitability. for mostly recurring revenue. So it's a universe of one.

They're doing phenomenally well. Expectations are high because they keep raising them, which is probably why you're not seeing a lot of reaction in the stock, but the results themselves, they keep getting better every quarter. I mean, I don't know the expectations like meaning the estimate. The expectation in terms of the pricing of the stock didn't seem to be anticipating a lot going into the numbers. I'm just wondering why you think if these numbers are truly extraordinary,

why there isn't much of a bounce in the stock when it's not like it's been a high flyer into earnings. Yeah, that's the trap they're in right now. They were trading. Before they reported this, they were trading it 90 times cash flow. I want to say that by the time we all adjust our numbers, they're trading more like 80 times cash flow. That's very high expectations. That's a lot more than anything else. And the expectations for the fundamentals are very high because they've been accelerating every revenue for the last couple of years.

So they're in this trap that there's nothing they can do to impress investors because every quarter keeps being better and better than the previous quarter before that. But I don't think they care. I think what they care about is the business is doing phenomenally well. The stock over time is performed very well. And they're going to continue to grow this business very rapidly. There's really not a lot of reason to believe this is going to stop anytime soon. Gil, what do you use in terms of macro factors, industry drivers, to model the performance? Where is Palantir getting all of this growth from, whether it's from, you know, competitors or just kind of new functions, or is it just, you know, the free spending by the Defense Department at a time of war?

Yeah, so we thought the commercial business would get bigger than the government business. The reason it's not is that the government business accelerated a lot. So they're almost half and half right now. So it is two completely different things. One is the United States government is increasingly reliant on Palantir for its most critical systems. I think it's very well understood at this point that a lot of the successful targeting that happened, especially at the beginning of the conflict in Iran, was Palantir tools. So they're blowing away everybody's expectations in the Department of War,

which means the Department of War is going to rely on Palantir more and more local municipalities in the United States who rely on them more and more. That's what's happening on the government side. On the commercial side, they're just having tremendous success supporting those commercial customers, so they keep doubling that business.

They're in such good shape. They don't need salespeople to hit enterprises up. They have more inbounds than they can handle. We went to their conference, and what we heard from most of the CFOs we talked to of their customers is they called Palantir, and Palantir's in a position to be selective. So that just tells you the success their customers are having is bringing in other customers.

That's a very rare position to be, especially in software these days. Yeah, no doubt about it. It's pretty remarkable. We'll see, you know, as they sort of race to grow into that valuation, as they've done so far, Gail. I appreciate the time, Gil Luria. Thank you. All right, shares of eBay jumping today as GameStop makes a bid to buy the company. eBay's market cap is five times GameStop, so how would this work? Well, we'll hear from GameStop's CEO Ryan Cohen after this break.

Shares of eBay rising today and hitting an all-time high after GameStop announced an unsolicited offer to acquire the company for $125 a share in cash and stock, a bid that values eBay at roughly $55.5 billion. But GameStop's market cap is only a fraction of the offer price and significantly smaller than eBay's, raising some questions about financing. Wall Street is skeptical of the potential impact of a deal with GameStop shares ending the day lower. Truist writing that there appears to be limited synergy, Bernstein saying they're scratching their heads over the idea and bared, flagging questions around GameStop CEO Ryan Cohen's compensation structure if the deal closes. We spoke with Ryan Cohen exclusively on Squawk Box this morning. Here's how he defended the bit. There's an opportunity to build a much larger business, to make the business,

much more efficient and to accelerate revenue growth. And eBay is a very strong business. You look at GameStop as an example. GameStop, very difficult business, should have been bankrupt multiple times over, and it's doing okay. It's making a few bucks. eBay is in a very, very strong position, but it could be in a much stronger position, and it could be a much larger business than what it currently is. Ryan, you mentioned that GameStop's in a tough business. I mean, revenues are down like 40% in the last four years or something like that. eBay's been a public company for a couple of decades. Where's the evidence that you kind of know how to grow a mature consumer business?

I don't know. I mean, didn't you guys call for GameStop? top's demise multiple times. So it should have been bankrupt right now. Is that what you're saying? Well, look at our financial performance. Is it better than you guys anticipated? Because you guys said it was going to be doing really, really poorly, and it's actually doing okay.

There are some skeptics, though, surrounding this deal who will say that, oh, that Ryan Cohen, he wants to make sure that he hits a minimum threshold to receive his first tranche of compensation, the minimum threshold being $20 billion market cap for game stuff. or $2 billion in cumulative EBIDA. Is that the case that this is a bid to make sure that you're going to get paid in that first tranche to boost the GameStop's market cap? I mean, I obviously want to build something much larger,

but I don't benefit unless shareholders benefit. So my compensation package is aligned with shareholders, and I want to build a much larger business. So just larger means successful. Larger means align with shareholder interests. Larger means maximizing shareholder value and increasing earnings. I thought there were curious answers to both of our lines of questions. It didn't really answer anything when you said, you know, why are you going to be good at this?

You said, well, basically because GameStop's not dead, is it? Right. It's not very convincing. Yeah, I mean, there's certainly nothing specific about what, he projects as the growth strategy for eBay and why he would be able to kind of hit the ground running. And the other thing about, you know, getting bigger, of course, everybody would want to be a bigger business. But the way you would acquire eBay and, you know, the way he would do it is issuing a lot more GameStop shares. Right.

Right. So you dilute away current shareholders. Obviously, the stock was down 10% today. It would require a lot more issuance, like more shares that are outstanding right now. And then that's in addition to the $9 billion the company has in cash on the books, as well as $20 billion in debt financing. seem to have lined up. So it's tricky, no matter how you do it. Now, that being said, the actual purchase price that's, you know, projected here, it's not wild in terms of evaluation. I mean, eBay would be at like 25 times earnings. Like, it's not that crazy in the abstract, but it's just a matter of this company getting the wherewithal to do the

acquisition. That's a little bit of a stretch. Yeah, absolutely. I wonder, though, also, I mean, we mainstream media and other outlets, you know, did count out GameStop for the You know, thought GameSop would be dead, et cetera. Ryan Cohen made him a very good point. It's not. It's still around. And so you have to wonder, you know, does he still have any ability to rally the retail investor?

I mean, today, Vanda Research put out a note about 3 o'clock saying it was a fifth biggest day for buying amongst retail investors and GameStop. So there's some power there. And I'm not saying that that's going to solve the problem of the issuance and dilution pushing shareholders down. It won't. But I wouldn't count them out. No, you can't foreclose on the possibility.

And by the way, the reason that people who said GameStop didn't have a future were proved wrong is because the wild meme stock stampede drove the stock to crazily on economic levels. And they were able to issue a lot more shares and pad to balance. As they shrank the actual business. And what have we seen recently with Avon? Other stocks. Interesting, though, all that retail buying could not sop it up. It, you know, GameStop down 10%. We'll see where it goes from here.

That's true. Time now for a CNBC News update with McKenzie Sagalos. Mack. Hey Mel. California's top insurance regulator said today the state is seeking millions in penalties from State Farm for allegedly violating the law while handling claims for the devastating L.A. wildfires last year. The palisades and eaten fires led to the deaths of 31 people destroyed more than 16,000 structures and caused billions in damages. State Farm has yet to comment. The Trump administration is considering government oversight over new AI models before their release to the public. That's according to the government. to the New York Times, which says the White House is working on an executive order to create a working group with tech executives and government officials to examine potential ways to install oversight procedures. And a massive three-alarm fired today at the historic Eugene O'Neill Theater on Broadway.

According to the FDNY, more than 60 units and almost 200 first responders were on scene after flames erupted in an electrical room. The theater has hosted hit show The Book of Mormon since 2011. Show producers say the musical will be dark for an unknown period of time. Guys, sending back to you. All right, yeah, right around the corner here. Mack, thank you very much. Up next, we'll hash out the sentiment around McDonald's

and whether you should buy the stock ahead of its earnings this week. The stock is down 16% since the start of the Iran War. And some news just out this hour, the SEC settling its lawsuit with Elon Musk regarding disclosures of his initial stake in Twitter. The SEC said he waited too long to disclose that he'd reach, the 5% ownership threshold for reporting back in 2022. That allowed him to buy more shares at lower prices.

The SEC says he saved $150 million by doing so. Today's settlement calls for a fine of only $1.5 million. We'll grab back. Welcome back to closing bell overtime live for the NASDAQ market site. Down day for stocks to start the week as oil prices rise. The Dow losing 557 points. It's worst day in more than a month. The S&P 500 down for 4 tenths or percent.

Small loss up for the NASAC. Some earnings just out at the top of the hour. Palantir, strong numbers and strong guidance for the stock, only 1% higher after hours on semi, also beating on earnings and revenue, issuing strong guidance, but that stock is lower by almost 4%. And Pinterest is also beating on the bottom line. After missing the previous five quarters,

guidance also better than expected, and that is lifting the stock with a huge gain up 18%. Duo Lingo, however, following after hours, despite a beat on earnings, disappointing on monthly active users. That stock down 14.5%. Well, several earnings this week could provide a clearer picture on the health of the U.S. consumer. One of those companies is McDonald's out on Thursday.

So far this year, stock is down 7 percent, underperforming peers like Burger King Parenthood Company, restaurant brands, and Shake Shack, and it is down 16 percent since the start of the Iran War. The company has struggled with sales growth recently, with 2024 actually seeing negative global same store sales. 2025 did see a small rebound here. And I think there's been some enthusiasm domestically among analysts that they have, you know, maybe the right formula in terms of value and new product to get that revived a little bit. But the macro environment just does not work with them.

Not only do they have the regional impact of the Middle East losing sales there, but also, of course, the impact of higher fuel prices. I mean, the average price of gasoline according to AAA is $450, $4.45 and change. And so that's definitely weighing on sentiment here. Yeah. So is a stock worth buying ahead of those earnings results? Let's bring in Dennis Geiger from UBS. Dennis, great to have you with us. Great. Thanks very much. Appreciate it.

How would you characterize how McDonald's enters the quarters? Mike and I were discussing, it seems like the menu is the right one. The macro may not be working with it. Yeah, I think that's right. I think sentiment's pretty negative here, as you touched on. I think there's an expectation that we have, at least, that maybe numbers are going to be a little bit light for the quarter. I think we had a strong start for the quarter in both the U.S.

as well as internationally. And then as you mentioned, when gas prices hit above $4 sort of in the mid-March time frame, it seemed like trends started to slow a bit. And I think that's continued into April into the second quarter. So I think we'll probably be a little bit light on those key metrics like same store sales in the U.S. and in that IOM international market. Dennis, how sensitive then from here looking out is the results the comp's going to be if oil stays here? I mean, how do we have to think about it?

I know that the valuation has come in quite a bit. Yeah, so the valuations come in, as you mentioned, for sure. We're at the lower end of the range at, you know, about 20 times 27 earnings, which is definitely the low end of the historical range here. I would say McDonald's, though, fundamentally is doing a few things to sort of drive traffic, drive market share despite some of the pressure that you mentioned from gas, consumer sentiment, all of which are weighing on the middle income and particularly the low-income consumer. very recently a couple of weeks back, they launched that under $3 menu, which they've got in several markets internationally.

Taco Bell also does a really good job with those low price points in the U.S. So our hope is you start to see some traction against those low price point items in addition to some of the value that McDonald's has rolled out over the past 12 months. And you cater a bit more to that kind of low and middle income consumer and drive a bit of traffic and market share gain in part off the back of the value. in addition to some of the new products that you kind of alluded to, some of the beverages that are rolling out over the coming days and some other exciting news coming later in the year. The whole new beverage menu, Dennis, is that an effort to sort of try and take a little bit of the Starbucks customer away?

Is that sort of a more price insensitive consumer as opposed to the lower income consumer, one who's willing to pay whatever for the Red Bull energy drink or whatever offering they have? Yeah, I think it's a combination. I think they'd probably like to take some share from both the Starbucks. I think if you kind of look at some of the drive-through coffee energy concepts that are everywhere, and this category has been growing extremely fast, I think it's an attempt to kind of tap into that market.

And quite frankly, Duncan and the convenience stories, as you mentioned, I think going after that market. So far, we've got the refreshers and the dirty sodas that are just launching now. Later in the summer, we'll have the energy that comes out. And so we'll see how that performs. But yeah, I think it's an opportunity to capitalize on. on that demand for beverages, for specialty beverages that the entire QSR space, quite frankly, is trying to get into. All right.

Dennis will be looking for the earnings. Thank you. Dennis Geiger. Thanks, guys. We've got a news alert on AI and Washington. Kay Bruny's got that story, Kate. Hi, Melissa. So I just spoke to a source close to the situation who tells me the U.S.

government is considering a new working group on AI. It would bring together tech executives and government officials to look into possible oversight procedures for some of the more powerful AI models that we've seen rolled out recently. One plan that is being floated is a formal review process, a possible is executive order as well as part of this. The overall plan I'm told is to vet some of these models before they are released to the public, although it is still very much in discussions from what I'm hearing. New York Times was first to report most of these details here.

White House official, though, telling CBC any policy announcement will come directly from the president discussions about potential executive orders, they say, is speculative. The person I did speak to said it's part of a move by the White House to try and get more visibility in advance of some of these models being released, especially the most capable versions out there. We've talked a lot about mythos. And what that's capable of, I'm told the government has been strongly encouraging some of the tech companies behind the scenes to participate in these types of partnerships with the government. Only a handful of companies, of course, have really met that bar. You've got companies like OpenAI Anthropic, the AI Labs, possibly Google as well. Mythos, though, is really the elephant in the room.

When we talk about this, it has caught a lot of attention from the U.S. government, CEOs as well for some of its cybersecurity capabilities. I did reach out to open eye on Anthropic, though. No comment, guys. Back over to you. All right. Kate, thank you. Kate Rooney. Ship happens with the peak. Amazon making a new move to disrupt the shipping and logistics industry, and it is taking down stocks like FedEx and UPS and UPS details when closing bell overtime returns. Welcome back to overtime. Shares of FedEx, UPS, and other shipping and logistics companies getting hit hard today. after Amazon announced the launch of Amazon supply chain services. The move will give businesses of all types access to Amazon's global supply chain network for freight, distribution, and fulfillment. 3M and Procter & Gamble are two of the big companies already signing up for the service.

It is amazing how much sort of displacement there was in the transport section. C. UPS, FedEx, C.H. Robinson, and likes all down. It's remarkably, it shows you there's a little bit of a raw nerve in this industry about whether they could be disrupted. that it's about $18, $19 billion in market cap lost between UPS and FedEx on the day. So you've got to believe that's the market saying there's that much less, you know, earnings power at some multiple down the road. So we'll see if that plays out.

But it does show you that there's considered to be a little bit of margin in here that they're going to be giving. Yeah, yeah. And the power of Amazon here. Yeah, always. All right. Well, speaking of Amazon, the stock hitting a new high today, now up nearly 30% in a month as optimism grows following strong earnings. Jim Kramer got a chance to speak with CEO Andy Jassy in the last hour. He discussed the company's big growth in its chip business.

Here's what he said. It's kind of remarkable how fast our chips business is growing. Last car we announced it's over a $20 billion annual run rate business. And that may understate really the size of it. If we actually took all the chips that were going to produce in 2026 and we sold them to AWS into third parties in the form of racks like most, most of the leading chip companies do, that business will look more like a $50 billion annual run rate business. And, you know, it's growing triple-digit percentages year every year.

I guess that's another way of quantifying why it's such a good deal for Amazon, right? If you were to be a buyer at retail, it would be $50 billion. And internally, they're saying it's kind of a $20 billion value. During the last conference call, they actually said that at that run rate, $50 billion revenue run rate, it would be the third biggest data center chip company in the world. That's remarkable. But this just further underscores the notion that Amazon sees a problem. It fixes it for itself.

And then it sells that service. Right. So with the logistics side of it, here it is selling its service. With the chip side of it, it's all neat. Now it's selling those chips. Does it over and over again. Yeah, for sure. I mean, everybody is worried about being AWS along those lines, right?

That's what happened there too. All right, don't miss the full exclusive interview tonight on Mad Money with Amazon CEO, Andy Jassy. Well, the weight loss war is heating up with the introduction of new pill. and there appears to be an early winter in this battle. Details are straight ahead. And as we hit to a break, check out some high-profile S&P 500 stocks hitting new highs today.

Cisco, Micron, Sandysk, Western Digital, and Seagate. There's a theme. Closing bell overtime, live from the NASDAQ market site. We'll be right back.