Closing Bell - Closing Bell Overtime: Tech and Rates Take the Lead 5/5/26

Episode Date: May 5, 2026

S&P 500, Nasdaq notch fresh records as stocks push higher after the price of oil fell and Treasury yields eased lower. RBC’s Lori Calvasina breaks down the market backdrop and where leadership is emerging. Semis take center stage with AMD earnings. Chris Rolland of Susquehanna gives instant reaction. Plus, a check in on a continued melt up across semiconductor names and what’s driving the surge. Bob Michele, Head of Global Fixed Income at JPMorgan, joins to answer a key question: are rising rates the next threat to this rally. 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 NYSC. Constellation Brands ringing the bell to celebrate Cinco de Mayo and at the NASAC Information Services Group doing the honors. Welcome to closing bell over time. We're live from studio be at the NASAC market site. I'm Melissa Lee along with Mike Santoli. Sox bouncing back after yesterday's losses at Dow up 350 points. The SB 500 and NASAC both up around a percent in closing at records. All-time high for the Russell as well, gaining more than 1.5 percent today.

On our radar at the close, the remarkable run for Intel and the other chips. stocks continuing, but are warning steins starting to emerge? Speaking of warnings, could rising bond yields be a threat to markets? And FinTech getting wrecked today, the threat from AI as well as disappointing results, having an impact there. We'll get to all of that in another big hour of earnings highlighted by AMD. Of course, we're going to wait on that, given the chip run. But, I mean, it's amazing because at the beginning of the day, we had, you know, these reports about ships being fired upon, missiles, drones, et cetera. And yet the markets still manage to just say, But as long as the ceasefire holds, we're all right with this.

Right. And a pretty clear message coming out of, you know, the Secretary of Defense trying to downplay that as a source of new conflict. So I think the market was like, okay, don't have to worry about that. And then it's about the momentum where the market was finding it today. And, you know, obviously we talk about the semis. I think once we got through the hyperscalor earnings for the most part, you got this extra little bit of Apple news today, hundreds of billions of dollars being liberated from the biggest and best companies of the world. and just spilling into the earnings of hardware companies.

That's unique in history. And I think the market doesn't quite know how to get its arms around it. So earnings are going up huge, but the stocks are going up, I think, a little bit faster at this point. So I think that's the balance we have to be careful about whether it trips over into something more. Yeah, given Nvidia's underperformance in today's chip rally, it'll be particularly interesting to see Nvidia's earnings report, which happens later on, and whether that is able to lift itself, because there are questions here, I think. I think about that. Invita has been a source of funds for people to buy things down the value chain. Micron is now basically on par in terms of stock performance with Nvidia since Chad GPT was released,

which is kind of amazing in itself. Now, some kind of early bubbleish readings are starting to show up. Renaissance Macro says the semis as a group have now gone up by more than 100 percent over two years from a 10-year high. That's their strict definition of getting into the bubble zone. Of course, we were way above that. in 2000, but you know, don't lose sight of it, I guess, is the lesson. Let's get more on what sent the NASDAQA to record highs today. Sima Modi has the details. Seema. Hey, Mike, well, resilience in the memory and chip tray certainly was a central focus for investors today with Micron seeing its best day in over a year, closing higher by 18% after announcing that its highest capacity, solid state drive, has started to shift. Now, Micron fueling shares of Sandisk in Western Digital with both

shares, both stocks, closing sharply higher on the day. It's worth noting, Mike Microans market cap of roughly $700 billion, puts it well ahead of its peers like Sandisk, which is at $200 billion, the clear leader to beat. Overall, strong day for chips, the broader semiconductor index witnessing its third consecutive, all-time high. Impressive when you compare the move in chips to the IGV software ETF that did not see a similar breakout today. In fact, one of the main constituents, Palantir, dropping by 7% despite strong earnings.

when I asked CEO Alex Carp why the market is not fully reflecting the company's growth story. Karp said he doesn't think this disconnect will exist for much longer. Guys? Seema, thanks, Sima Modi. Today's market gains helped by a pullback in oil prices. Let's bring in Pippa Stevens with the very latest there. Pippa. Hey, Melissa, the oil prices tumbling today despite not much changing in Hormuz.

Satellite data shows that two LNG tankers have moved away from the straight after yesterday moving into a position that suggested they were preparing to exit, which indicates ongoing. to growing reluctance to transit Hormuz. Now, S&P Global Energy's Jim Burkhard saying an inevitable market reckoning is coming as the cumulative supply loss approaches one billion barrels, a quote, staggering figure that inventories cannot cover indefinitely. The firm said the two key signposts to watch going forward are U.S. stock levels, as well

as China's buying and trading as demand indications that could put upward pressure on crude. Now, in the meantime, we're already seeing ways the war in Iran is fundamentally reshaping energy markets, including the five-fold increase in U.S. oil exports to Japan, as South Korea also increases its Gulf Coast imports or Norway, today announcing its expanding oil and gas permits, but the Prime Minister noting the industry contributes to Europe's energy, security, and safety. Guys? Pipa, I was sort of surprised that there wasn't more reaction, given there were some hits to Fujaira, which is sort of the workaround to the straight of Hormuz being blocked.

What's your take on that? That's right. So Fugaira and Yanbu have emerged as absolutely. in Central. We've seen loadings at Yambu up to about 5 million barrels per day and Fujaira up to about 2 million barrels per day. It seems like there are still exports happening and that the damage maybe wasn't as extensive as it could have been, but it certainly represents an escalation, particularly with the UAE growing increasingly frustrated that it's been really bearing the brunt of the Iranian attacks in the region, of course, one of the motivations it would

seem to pull out of the OPEC alliance. But I think that if this does continue to escalate, we are going to see those regions become bigger, you know, sitting ducks almost, because Yandu and Fugair, if you take those barrels off the market that now amount to about 7 million barrels per day and have meaningfully offset what's been lost from Hormuz, particularly on Yandu, if the Houthis decide to increase their attacks in Bob El Mandab, Yambu and Fugira are certainly on notice, but for now the loadings do continue at Fugira. Pippa, thank you very much. Well, as the market continues to move higher, so have valuations with the S&P 500 now close to crossing its five-year average. Could that be signaling that the

rally is getting stretched? Joining us now is Lori Kalisina from RBC Capital Markets. Laura, good to see you. Thanks for having me. So obviously valuations are kind of reinflating, but not back to where they were, I'd say last fall. Earnings themselves, I guess you have to check off that box. So when you do the building blocks to where the market goes from here, what are you mostly looking at? Look, I think generally it's climbing a wall of worry. I think that the earnings. I think that the earnings dynamics are extremely important here. And I know a lot of people in the geopolitical community think equities just don't get it. I would counter that I think maybe perhaps people in the geopolitical world don't understand

what's happening with the AI trade and earnings and how much of a buffer that is for SMP 500 EPS. So we're continuing to see rates of upward revisions that are positive on that AI-related trade. If you look at the mega-cap growth names in the market, we are seeing, you know, less rosy conditions in the rest of the market. but the strength of that AI part is really helping. And as a result, when we look at the market cap-weighted P.E., it's not moving up that fast. So I think by our last count, we were around 25 times. The highs last year around 28, if you look at it on the next 12 months basis,

just a bottom market cap-weighted P.E. And so we think there is still room. And we also look at the Russell 2000 P.E., which is a very good broad market barometer. It's only around 16.6 times or so as of last week, and it can get up to over 18, if you look at the market. past couple highs. So I'm not saying there's a ton of room before we have a little bit of a breather, and we don't think markets move up in a linear fashion, but I don't think we're overheated right now. The strength, though, in earnings worth, the strength in the S&P 500 is really

the AI trade. Yeah. It is the tech trade. So how do you sort of think about the impact of the oil shock, the energy shock, you know, maybe longer, higher for longer inflation on the rest of the market? Are there areas of the market you say, okay, we like the AI trade. That's going to fuel us higher, but we will absolutely stay away from this because the impact from the energy shock is going to be definite. Well, you know, it's funny. I've actually been underweight consumer discretionary for a long time before this war even got started.

This was one of our big overweights coming into, underweights, rather, coming into the year. So we feel like we've already checked that box. Consumer Staples is one that doesn't score so well in our analyst survey that we did recently where we asked our analysts, all these different questions, valuation, demand, war impacts. But the sector's actually done pretty well. So we've got a little bit of a defensive, you know, undertone to that. You know, I think as we go forward, defensives, they don't necessarily look all that appealing as a whole, right? You have expensive valuations and utilities, concerns about affordability that may show up in the midterms.

Consumer Staples obviously has some overhangs and health care. I like it, but it hasn't worked this year as a call, right? It's one that just can't seem to get out of its own way. So I think when the defensives, you know, are either giving you some challenges, you do have to look for those kind of rebound, opportunities or for bargains within cyclicals. You mentioned a wall of worry. Obviously, probably not as tall as it was five weeks ago. But in communicating with clients, are they kind of reluctantly participating?

Are they fighting it? Do they not like the leadership of the market? So it's funny. I mean, in the weekly we put out on Monday, I characterized everyone I met with last week is a little bit cranky. And I think part of it is just the fatigue of the year. If you talk to small-cap investors, they tend to be biased towards quality stocks, and those aren't outperforming right now.

It's more of a lower quality bent, so that has them in a bad mood. And if you think about, you know, the last couple weeks as we continue to creep to these new highs and markets, on the one hand, I've only counted one investor last week who told me he's worried about a recession. And I can't even think of any in the couple weeks prior to that. But at the same time, there's a little bit of a disbelief, a little bit of, you know, do we really need to be at all-time highs? So I think investors are still kind of navigating this foggy bottom, trying to figure out exactly what the impacts are. And they're hearing a lot from the geopolitical community about kind of these worst-case scenarios. They're hearing an opposite message from the companies who are really saying, we've got this, we can manage through for now. We have buffers.

So I think there's a little bit of confusion, to be honest, Mike, that's contributing to some of that crankiness. You see the S&B 500, though, 500 points higher from where we are right now in 12 months. So it's the rolling forward price target. It's not going to be linear, though. So what sort of are you predicting a pullback? Are we going to sort of hit the point where investors do grapple with, the energy shocks, inflation concerns, et cetera. So I think when you talk about earnings,

you have to talk about the AI-related earnings and the non-A-I-related earnings. And if you look at what's happened since the war began, we've seen a big uplift in the energy sector expectations. Materials has also moved up. And, of course, tech and MagSever and the whole AI story, a lot of other things have stayed relatively flat. I do think outside of that AI trade,

you've got buffers, you've got inventories, we've got hedges. You know, I think companies are doing a good job managing through, but the longer and longer this goes on, you know, the less robust those buffers are going to be. So I've told people I feel okay about 2026 numbers for the most part. 2027, is there going to be some risk there when some of those buffers run out? Perhaps at some point we need to downwardly adjust some of those expectations. That could cause some ripple effects in markets.

I don't think that it's anything like recession pricing, but it could give us some indigestion. Is there a point at which, I mean, we've had this interesting dynamic of, you know, stocks up, yields up. It's just kind of this high metabolism type of environment, right? High nominal growth and profit growth is kind of ramping. Is there a point at which it becomes too much of a good thing? So, you know, we ran a stress test, and we've actually been using this in our valuation modeling or our trice target modeling, and the fair value estimate comes out to 77.59. Now, I'll caution you this was prior to reporting season, but we baked in 3.3% on inflation,

4.5% on 10-year yields and a flat Fed. and when we took the consensus earnings at the time and haircut it by 5%, I was still getting to 77.59 with a 24.11 PE multiple. So those are kind of reasonably bad scenarios on rates and inflation as we work those up, right? It pushes your PE down and it pushes you into kind of less robust territory. But I would say those levels, if the earnings hold up, you know, decently well, right? I'm haircutting them a bit. We can still get to our target pretty easily.

Lori, great to see you. Thank you, Lori Calvesina. Arista Network's earnings are out. Let's get to Christina. Parts of Nevelas. It's got the numbers. Christina. All shares are selling off right now.

Arista, for those that don't know, sells high-speed switches and software that connects CPUs inside, or GPS, I should say, inside data center. So think of it like highways that let NVIDIA chips talk to each other. For the first quarter, earnings per share came in at 87 cents, which is a six-cent beat on revenues of about $2.71 billion dollars also beat. But you're seeing shares. Initially, they fell about 10 percent, now coming back up. Gross margins came in a little light at 62.4%.

Maybe raising concerns about memory costs. For the Q2 EPS guide, we're getting 88 cents, which is slightly higher, three cents higher than what the street anticipated on Q2 revenue guide that was mostly in line. So given the stock has run up about 34% just in the last month alone, perhaps this beat was not enough for investors, especially the gross margins front. Guys?

Christina, thanks. Christina Parts Nebless. We mentioned the continued run in chip stocks today, the latest leg hire coming in part on some reports about Apple expanding its chip suppliers. Mackenzie Sagalos joins us now to explain. Mac. Hey, Mel, so Apple's reportedly looking for a chip backup plan. Bloomberg says the companies held exploratory talks with both Intel and Samsung about making some of its main device processors here in the U.S. That would be a notable hedge for Apple, which has relied on TSM for the core chips. inside iPhones, iPads, and Macs for more than a decade now. That report is helping send Intel shares 13% higher today, hitting an all-time high. For CEO Lipbutan, landing Apple would be a major validation of his foundry comeback strategy. Now, no orders have been placed, and both Samsung and Intel declined to comment.

Well, Apple hasn't responded to CNBC's request for comment. But Apple executives did make clear last week that the biggest constraint right now is advanced node chip availability, not necessary. memory. CEO Tim Cook saying that pressure will likely carry into the June quarter, and that gets to the bigger problem for Apple. It needs more access to the world's most advanced chip capacity, just as AI data center demand is making that capacity harder to get and a lot more expensive. A U.S.-based path through Intel or Samsung's Texas plant would certainly give Apple more supply flexibility, more leverage with TSM, and appease Washington at the same time. Guys?

All right. Mac, thanks. Mack. Segalos. I don't know if you remember this, Mike, you probably do. But there are so many reports that Apple would be investing in Intel. They kept surfacing. Intel went up. Surface again, went up. December. Intel actually hit a high on the reports that Apple would invest. And here we are. We actually have news that there is some sort of a relationship, a real one, between the two, which is interesting. Yeah, I mean, it should be symbiotic given the, I mean, not just the political concerns, but just wanting to, you know, kind of diversify your suppliers and have a little bit of a backup in the capacity-constrained world.

Take a look there. MBX hedge funds ringing the closing bell over at CBO in Chicago, ending their regular day of trading for options. Well, we are still awaiting earnings from AMD. We'll get you those numbers and instant analysis reaction. You're watching closing bill overtime. We're live from the NASAC market site. Stay tuned. Cheers of Anheuser-Busch, a big winner today in rising to levels not seen for more than six years,

the company selling more beer in the quarter, a nearly 1% rise in volumes after three years of declines. The growth is coming from its more premium brands and from non-alcoholic beer, which is still a small part of total volumes, but growing very fast, according to the CEO on Squabox. This morning, stock up almost 9%. AMD earnings are out. Christina Parts Nevel has got the numbers. Christina. Beat on the top and bottom line for Q1. So EPS, $1 37 adjusted on revenues of $10.3 billion. So both those are a beat. For the data center revenue in particular, because that is a huge driver, that came in at $5.8 billion higher than estimates also a record for the company.

They're saying it's driven by their CPUs as well as the ramp of their GPUs. Specifically for gross margins, perhaps that added to the initial dip that we sell in the stock gross margins. For the quarter came in at 55%. So a little light than what the street was anticipating. And then now for the Q2 guide. So Q2 revenue guide of 11.2 billion. That midpoint is higher than what the street wanted. Same thing for their gross margins at 56%. So just 1% higher. So perhaps that's the reason why the stock's not jumping as much. And then just one line from the CEO in the press release.

They're seeing strong momentum as the Gentic AI drives increasing demand for CPUs, something we heard from Intel. We'll probably hear from ARM tomorrow. And then looking ahead, we expect server growth to accelerate meaningfully as we scale supply to meet demand. So the market is, I guess, parsing over these words. And I'll come back with any more. comments that are on the investor relations site. Guys, did we get the Q2 EPS guide, Christina or the full year?

No, I didn't get that here. I just wrote down for a quarter. All right. We'll let you plow through again. Christina, thanks, Christina Parsons Nobles. Let's get to Susquehanna Senior Analyst, Christopher Rolland. He has a positive rating and a $375 price target on AMD. Chris, great to have you with us.

Your initiative on the quarter? It was great. It was fantastic. She, Lisa Sue, the press release spoke to not only solidifying AI orders, but also server orders and perhaps ramping supply to meet demand. We think because of a gigantic AI, we are in the middle of a server renaissance, and AMD is leading the charge here.

And I guess, you know, obviously the numbers are going up very quickly, baked into the projections, is further margin improvement and all the rest of it. I do wonder, though, if there are going to be stops along the way based on how much credit the stock has gotten. I look at it at enterprise value to sales. It's over 10. You know, we've only spent a few weeks above that level in the last, you know, a couple decades.

I just wonder what you think is now implied in the valuation. I think we're still kind of reasonable here. We're at about 30 times our 2027 number after this report. And these guys are leading the charge not only. only in agenic server CPUs to power that whole movement. But additionally, their helios rack scale architectures powering their MI AI GPUs, probably, you know, number two or three competitor to Nvidia in a trillion dollar space.

So 30 times to us is reasonable. Sorry, Chris. Do you agree with sort of the movement, the money flow within your sector in terms of Nvidia trading lower, the rest of the chip sector catching a bit, particularly the areas that are perceived to be in shortage or high demand. I mean, you mentioned the server Renaissance.

I mean, we're sort of seeing that play out in front of us in terms of where the money is flowing in the chip sector, memory stocks dropped sharply, Intel is on a massive run. What do you make of that sort of dynamic, Intel lower and the rest of the group higher? Valuations for the space are slightly elevated, and we are in the sweet spot of the new semiconductor cycle, the fastest part of the second derivative in that cycle. So it doesn't surprise me that valuations are a tad on the

high side here, but the revenues, they have that to back it up. They have the outlooks to back up those valuations and, you know, the AI trade right now is all about hardware rather than software, at least in terms of revenue dollars. So it is definitely raising all boats here. Is there a next wave that you're looking to get ahead of at this point? I'm not sure what's left. We have seen things like analog and industrial even start to move a little bit, but is there any area that's unexploited just now? Yeah, about two years ago, we were hugely into the optical and even copper AI interconnect space. We think the next big market is going to be the AI power market.

These power draws are just exponentially growing with generations. And so semiconductors can really work their way into new markets that were never previously dominated by, semis, expanding their tams. And so we think that's the next big new market. A lot of the analog guys are going to participate there. But anybody with materials like silicon carbide or gallium nitride, we think are hugely well positioned for that big move. Which company is there, Chris? So some of these companies include Infinion out of Germany on semi, but also smaller players in the space, like ADI and TI are also going to benefit. All right. Chris, always good to speak with you. Thanks, Christopher Rolland.

And do not miss an exclusive interview with AMD CEO, Lisa Sue. That is tomorrow 9 a.m. on squawk on the street. Well, declining earnings, job cuts, and the threat from AI, all combining to turn FinTech into a Finrek today. We'll have much more on this sector and the broader jobs picture coming up on overtime. Coinbase announcing today it would cut about 14% of its workforce, approximately 700 jobs. CEO Brian Armstrong announcing the cuts in a memo to employees. He gave two main reasons for the cuts, a down market for crypto, and the emergence of AI. Armstrong is saying engineers can now do in days what it used to take weeks, thanks to AI.

PayPal also lowering its results, which met expectations, but declined compared to last year. The company's new CEO also targeting $1.5 billion in cost savings, which is expected to include job cuts. Speaking of job cuts, Mike is taking a look at Joltz. Yes, out fresh this morning, the job openings and labor turnover survey. This goes back, obviously, like 25 years. And what you've seen is mostly kind of a static, you know, low hire, low fire environment for jobs. However, so openings are above the lows, but not terribly different from what we saw as the norm pre-pandemic. Hires actually a little bit of an uptick there. You see in the latest month, by the way, this is from March. So it's always a little bit lagged. And then layoffs at the bottom, also just the subtlest little turn higher. So it was up. over the prior month. But again, just look how low it is historically. So companies are finding ways, I think, through attrition and just non-hiring to keep their job totals in check. And then, of course, quit rate. That, of course, was very high around the pandemic. And, you know, job holders had all the power. And that is now very subdued as well. So nothing is raising many

alarms, but it's also not saying that hiring is about to boom. Right. We haven't seen the latest months, though, of course, in terms of April. I also wonder, I mean, and there's no way to see this in this data, but in terms of where we are seeing the layoffs and overlay that with the income. Yes. Because it seems like now we're hearing more

about sort of the white collar job loss, which could have a different impact. Well, it has a different impact in terms of of, you know, lost spending power, but also on the propensity to file for unemployment claims. Because unemployment claims are rock bottom right now. They're at like 60-year lows. And part of

that is because a lot of unemployment benefits don't really replace a high percentage of what jobs people lost, so they don't bother filing. Or if their severance package, they can't file. So it's not the numbers? Not yet, maybe. Yeah, yeah. Okay. Time now for a CNBC News update with Brandon Gomez. Brandon. Hey, Melissa, that's right. Secretary of State Marco Rubio said that the U.S. and its partners in the Gulf are proposing a new U.N. Security Council resolution on navigation through the Strait of Hormuz. It would require Iran to seize its attacks, stop placing minds, and give up uncharging tolls. It also seeks to establish a humanitarian corridor there. The New York Times reported today that the FDA has blocked publication of several studies that reportedly showed

vaccines for COVID and shingles are safe to use. The studies, funded by taxpayers, found serious side effects to be very rare. A spokesperson for the Department of Health and Human Services said the COVID studies were withdrawn because the author's conclusions weren't supported by the data. And Cole Thomas Allen, the man suspected of trying to kill the president at the White House Correspondents Association Dinner was indicted this afternoon by a federal grand jury on four counts. The charges include attempting to assassinate the president, assaulting an officer of the United States with a deadly weapon, and two firearm charges. Alan has not yet entered a plea.

Melissa, I'll send it back to you. Brandon, thanks. Brandon Gomez. Record closes today for the S&P 500, the NASDAQ and the Russell 2000. What could possibly derail this record rally? We'll take a look at one potential threat next on overtime. Welcome back to closing bell overtime, live from the NASDAQ market site. Stock's rallying across the board today, all-time closing highs for the S&P 500, the NASDAQ, and the Russell 2000.

AMD results out moments ago, beating on earnings and revenue, data center revenue, a key number, also better than expected. For the current quarter revenue guidance, even the low end of the range is higher than the current consensus. Another chip name out this hour, Super Micro, and that stock is jumping 16 percent. Earnings of 84 cents a share well ahead of the estimate of 62. It did miss estimates on revenue by $2 billion, but the guidance for the fourth quarter is strong. The low end of the EPS range is 65, and the current consensus is 55. Clavio moving in the other direction. The numbers for the current quarter were better than expected a couple pennies ahead on earnings and a few million on revenues,

but second quarter operating income guidance is below what the street is looking for. And the company announcing that its CFO is stepping down as well. We've got a news alert on Anthropic and Alphabet. Mackenzie Sagalus got that story. McKenzie. Hey, Mel, you got Alphabet shares bouncing after hours with a market cap exceeding Nvidia at $4.8 trillion. This comes on a report that that five-year, five-gigawak commitment that Anthropic made to

buying Google Cloud compute, they put a dollar amount on that $200 billion. Now, that would mean that the $400,000. $162 billion backlog that Google reported last quarter, 40% of that is concentrated in this Anthropic Cloud commitment. As part of that deal, remember, Google's planning to invest $40 billion into Anthropic. Again, one of these swaps of Google's TPU in-in-house AI chip providing that cloud compute capacity to Anthropic. But guys, that number that we're looking at, and we're out to Google right now, they have

not confirmed it, but a report saying that it's a $200 billion compute deal that Anthropic has signed with Google. All right, Mac, thanks. Mack, thanks, Mackenzie Seagallos. Let's get to the bond market now where yields east a bit today. Rick Centell is in Chicago with more. Rick. Yes, Melissa.

You know, this morning, we had a lot of data points. One thing that I paid close attention to is, in general, the service sector data was on the weak side. All except for prices paid. Prices paid had back-to-back 70.7s, which means back-to-back some of the highest levels since the fall of 2022. And do remember that yesterday in the tenure, we had the highest yield close going back to July. So basically a 10-month high close. But look at the two-day chart. Even with prices paid at a lofty level, interest rates moved lower,

mainly because many traders had expectations of a significantly higher prices paid. And there's a lot of talk on the street about we're going to eventually test 5%. Well, maybe that's true. But look at this chart. The last time we actually closed above 5% was July of 2007. We came close in October of 23 with 499 closed, but you have to go back that far. Now consider, many are looking at what's going on in the marketplace. We have huge amounts of corporate supply, must have it based on AI.

We have an economy that seems to be doing better, but we have a conflict in the Middle East. Maybe there's credit differentiation going on between what's going on in corporate land and the U.S. in terms of the sovereign debt and the credit quality, but no matter how you slice it, interest rates have been really well behaved given some of the fundamentals. But maybe the learning experience isn't thinking the market's wrong. It's trying to figure out why the market's doing what it is today, and that'll give you the answer. I personally don't see a close above 5% unless we get above on a closing basis, 4.67% before the end of this month. Mike, back to you.

Thank you very much. Well, let's stay with the bond market. It is not just rates here in the U.S. that have recently moved higher. International rates also creeped up. So could rising yields be the next test for the markets? With us now to share his insights is Bob Michael, J.P. Morgan's head of global fixed income, currency and commodities. Bob, good to see you. Happy to be here. So we've had this dynamic. Markets repricing a less doveish, more hawkish fed, oil going up, inflation expectations pushing higher. But yields really just now pressing up against the upper end of the range that we've been in for a while. So is this mean that, you know, it's running its course, or is it further upside for yields? It feels like to us that it's running its course. I think you're going through the repricing that the war in the Middle East isn't over in four to six weeks. It's taking a bit longer. That's pushed energy prices higher. And the easing bias that was in the central banking system six, eight weeks ago, has been fully removed. I don't see five percent for the 10-year treasury and the cards. For that, you'd need the Fed to move from an easing bias where it is today. Not only the whole Fed has to get to neutral, but they have to go to a

tightening bias. And if that happens, that's a long way off. Even if the Fed moves to neutral, I mean, how about the upward pull on rates around the world? I mean, the bias toward higher rates is higher around the world just because, for instance, Central Bank in Europe only has a single mandate. And so the bar is much lower. Inflation is hitting there. They've already indicated that the next move could be a hike. Yeah. And that is true. The central banks have made it clear that they've got to be vigilant against inflation. But I think we have to accept that the bond market's gone through a lot of repricing. If I look at the 10-year treasury, can it get 100 basis points away from the Fed funds rate in a neutral environment? Yeah, that puts you at 4 and 5.8%. So that's 20 basis

points from here. It's not at 5%. You look at the repricing that's gone on in Europe, but you listen to Christine Lagarde. She's talking about having to be vigilant on the impact to the economy as well as inflation. Let's remember her career also encompassed being finance minister of France. So she gets that there may not be a dual mandate, but they're watching that as well. Corporate credit spreads have really been pretty benign, obviously. There's been a lot of demand for all of this supply coming from, you know, tech issuance and things like that. Is there value in the corporate sector? Yeah, we think there is.

When you look at what Alphabet did today, $17 billion in supply, it went well. And that was in Europe. That was in Canada. Those are two markets where everyone was worried about the bond market. Not a problem. We look at the tech supply. We're in there. We're buying.

We see the final demand. We see the capacity need. We understand that these companies are trying to. to monetize the demand, but to do that, they have to actually build the capacity. It all makes sense to us. It tells you that the funding markets, at least through fixed income, they're open, they're receptive. Are you surprised that on any level that the demand, the uptake for such debt has been

very smooth and open? I mean, in terms of the supply coming on the market all at once, all to fund the same buildout? Not so much. And we step back and look at corporate America in general. We were marveling at the margins for U.S. industrials. They're at 15%. They've been there for several years. That's very high.

You look at corporate earnings. The expectation is they could grow at 20% this year. So corporate America and the corporate bond market is being powered by very strong fundamentals. And of course, AI is all part of that. Yeah. And I guess when it comes to something like Google, I mean, they literally have more cash than that. Right. For Google.

So that's a pretty comfortable situation. Very, very low. If you're going to be going to be lending. All right, Bob, good to see you. Happy to your being here. Appreciate. All right. Up next, the CEO of Anthropic issuing a warning for software companies

and announcing a new AI tool that is disrupting Fintech stocks today. Details in closing bell overtime returns. I think individual SaaS companies, it's very possible for them to lose market value, go bankrupt, completely go bust. But it depends on the risk. response, right? I think they're incumbents today that are going to see very clearly. We have a lot of moat here. The moats here are going away. We're really going to pivot and we'll do better than we did before. And there are others who are not going to pay attention, who are going to be blindsided,

and, you know, they're going to have a really bad time. That was Anthropic CEO at an event earlier today. Warning that software companies that don't adapt to the growing threat AI poses to their business could end up going out of business as those moats keep getting smaller. While the software names have started to claw back recently, most are still way off their highs. The software ETF, IGV, down 20% in just six months. And today's session, Mike, we already saw a whole bunch of fintech-related names getting crushed and sort of, you know, still digesting that notion that those moats are getting smaller. And investors still believe that narrative. And no doubt about it. I mean, I think that the

confidence has come back only in drips and drabs. I mean, the IGVs, maybe 10% off the off its recent lows. Palantir sold off on the good number. We were talking about that last night. And it just seems as if even though the growth is phenomenal, the valuation assumes many, many years of future growth. And maybe the total revenue opportunity isn't as huge when you're thinking about, you know, how big AI-only companies are getting right now. So it is kind of an interesting dynamic. And in fact, you know, sticking with AI and the potential for disruption, Anthropic, unveiling a suite of new AI tools for banks and financial services companies today, company saying the agents will help automate what it describes as common forms of financial works

such as memos and pitches. The news hitting financial data and fintech stocks pretty hard to do. You see the likes of FISA, facts set, into it. Now, this is kind of another round of damage. Right. It's like, didn't they go down before on the same threat? Yes. They totally did. Now, some of them have come back a little bit. Some of them are kind of unduly punished for some of this stuff. I do think that one of the reasons those stocks kind of get again battered is because there was the loyalty of a lot of investors who just thought that they were predictable and perpetual growers has been just completely abused that loyalty. And so now it's sort of like they're guilty until proven innocent.

Well, new prediction market competitors have emerged. Recent studies show that retail investors are losing to bots on platforms like Robin Hood, Polymarket and Kalshi, leaving them at a disadvantage. I spoke to Robin Hood's CEO, Vlad Tene of this morning on Squawk Box, and asked him about the rise in algorithmic bots in prediction market trading and its impact. This is what he said. Algorithmic bots are a relatively new thing with a lot of these AI tools that are coming on.

You actually are starting to see some retail investors writing these themselves, you know, the last clod or codex to generate a strategy for them. And we're thinking about, okay, right now you have to be like a quant or an engineer to do this. But can we make it so that everyone can have access to this powerful technology? Shares of Robin Hood are down more than 30 percent so far this year in the last quarter. They saw 47 percent decline in crypto revenues. That was really the source of the weakness. But the question I specifically asked him was, you know, how do you feel about offering a product which is so stacked against the retail trader,

which is your core customer. I mean, studies after studies show that there are algorithm, algorithmic bots out there. They make up the bulk of the volume in terms of prediction markets. They take most of the winnings. And his answer was, we're going to soon have this technology that can let you also program your own algorithm, which I thought was fascinating. Well, it is fascinating. The issue always with this, and by the way, I was covering the industry when online brokerage first came around,

and you were able to first do options. And yes, the capacity of individuals to execute formerly professional-only type strategies has only ever gotten better. But guess what? The professional strategies get better faster because they have the scale and the deep pockets. So, yeah, you can tell Claw to write yourself an algo for trading prediction markets, but Millennium and Citadel can do it better. And not just that.

I mean, prediction markets by definition are a negative sum game. They're a negative expected return game. It's not the same as investing. And so you're kind of, you're saying, oh, but the information is so valuable. How do you get the information from prediction markets from a lot of people offsetting trades and most of them losing? Not five bots doing 70% of the trading or whatever the number may be in a particular contract. It's a tricky situation. All right.

That's a nice word. Yeah, I know. Disney has been a big disappointment this year, significantly underperforming the rest of the Dow. Up next, what to expect from Disney's earnings before the bell tomorrow? and we'll ask if the results could spark a bounceback. And here's a check on some big S&P 500 stocks hitting new highs today. Amazon, Alphabet, Caterpillar, Broadcom, and Micron. Heard of any of those closing bell over time.

Live from the NASDAQ market site, we'll be right back. It's been a big hour of earnings reports. Let's get you caught up. A move higher in AMD after it beat on earnings and revenue and guiding above the street for the second quarter in revenue and gross margin. The stock up over 5%. and that's pointing to perhaps another good day for chip stocks,

both the SMH and the SOX ETFs, higher and after-hours trading. Intel, also higher. The stock has nearly tripled in 2026. Erristen networks falling 12%. That is despite better than expected earnings and above consensus guidance for next quarter, but gross margins did fall short and one after-hours mover not related to earnings. Entergy falling after announcing a stock offering of $2.2 billion. dollars. Dow component Disney reporting earnings tomorrow before the bell. It is the first quarterly

results with new CEO, Josh DeMaro, having taken over from Bob Eiger back in March. The stock basically flats since then, as it was under Eiger during the second tenure for three and a half years, Disney barely budged, lagging far behind the S&P 500. You can see the revenue breakdown from last quarter. Entertainment, which includes movies and streaming, is a little less than half. Parks and experiences, 38 percent, in sports, largely ESPN, about 18. The film slate through year end includes a Mandalorian in Grogu, Toy Story 5, Moana, a new Avengers title. Given that this is the first one under the new CEO, I think he wants to see what his vision is,

what his vision is for bringing the company together, what he wants to do with sports. Definitely. And of course, Parks is a big question mark with what's going on in the world. Yeah, areas of emphasis, I think, is a big one in terms of where he feels as if, you know, things are either underappreciated or where work needs to be done. You know, the flattishness of the stock, and this even goes back beyond, you know, Iger's last term. It goes back into the mid-2010s, I think, you know, has meant that earnings have grown, and it's looking cheaper than it used to. It's like got a 6% free cash flow yield right now.

They've got earnings net income back up to peak levels from before the pandemic. So it seems like, in theory, things are coming together. But the next stage of growth is very unclear. Yeah, we spoke to Tom Rogers earlier today on Squawk Box, and he said, you know, we want to see how it all comes together. I mean, right now, You've got Hulu, you've got ESPN, you've got the Disney platform. Like, how is this all going to merge and, like, have that flywheel that Disney is famous for? There was that report. They're going to do an all-in-one app.

And I remember years ago somebody's like, Disney as a service should be the future. We'll see if that happens. Well, Disney, not the only big name set to report earnings tomorrow. We'll also get results from CVS Health, Uber, Marriott, and Kraft-Hines before the bell. And then after the bell, we'll break down numbers from arm holdings, door dashed, snap, app-loven, and Z. The ADP employment report is the only data on the economic calendar. It's actually been a little bit better at handicapping what the official jobs report is going to do. And we do get that on Friday.

So there's going to be a little more domestic macro data coming. Yeah. I'm really curious to see how the chip trade follows through given today's huge rally. And whether Nvidia gets any sort of a bid into our session. It's been fascinating. Invidia has been a little bit of a dead way. And yet, the biggest component of all the socks, all the semi-ETFs, and they're up 2 and 3% a day.

So everything else going higher. There's been this weird sequencing of strength in that market. And then we did get good numbers from AMD. We're going to hear from Lisa Sue tomorrow. You wonder if selling on good news would be a tell. But so far after hours does not seem to be going that direction. It does it for overtime. Fast money begins right after this quick break.