Closing Bell - Closing Bell: Stocks Climb, Oil Prices Fall 6/23/25

Episode Date: June 23, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

Welcome to Closing Bell. I'm Scott Wapner live from Post9 here at the New York Stock Exchange. This Make or Break Hour begins with breaking news. Iran responding to the U.S. attack on its nuclear facilities within the past couple of hours. No deaths or injuries reported from a flurry of Iranian missiles sent towards the U.S. airbase in Qatar. Reports say those missiles intercepted before reaching their target. Stocks, as you might imagine, they've been volatile given the news flow today. They are higher now. Crude oil is worth watching too. It is falling sharply. We'll have more on that coming up. We do begin in Washington now in our own Megan Casella. What's the latest, Megan? Hey, Scott, so the U.S. had been bracing for this, but we can confirm now that this was the first

Iranian attack directly on U.S. forces. It was both short and long-range missiles that were headed at al-Udeed, a U.S.-run air base in Qatar. There's no current cause for concern now, according to Qatar's Interior Ministry, just in the last few moments. As you said, those missiles were intercepted, and just in the last few moments, two defense officials also told NBC that they don't believe there was any damage done to that airbase at all. Now the US is on alert for additional attacks throughout the region. Two White House officials had told NBC News that the President Trump has been monitoring potential attacks not only in Qatar but

also in Bahrain and Iraq, potentially other countries as well. We know the air space is shut down in all of those countries currently as well as in the UAE and Kuwait. So potential concern for additional attacks throughout the region, although these are the only confirmed attacks as of now are those in Qatar. Now Scott, we are also following reports that from the New York Times and others that the Iranians may have given the Qataris a heads-up that this attack was coming. The U. The US may have even been given a heads up as well in addition to that attack. We have not confirmed that independently, but three officials did tell the New York Times that this was meant to be a symbolic strike back at the US, but one that was done

in such a way that allowed all sides sort of an exit ramp here. Again, we have not confirmed that report, but it does raise the question, Scott, of whether this was done in order so that the Iranians could save face and potentially could come back to the negotiating table. No indications yet that they're willing to do that, but that is the next question from here as we wait for the potential for further retaliation. Scott. All right, Megan, thank you very much for that. Megan Casella down in Washington. Let's bring in CNBC contributor Trivariates Adam Parker. It's good to have you with us.

The market seems to be taking this exactly how Megan ended there, that this was a symbolic response and meant as much to move to an off-ramp if possible and the market's reacting as such. Is that how you would view it? I mean, clearly the market's a forward discounting mechanism and it's saying today that it's less worried about it than it was yesterday. I don't have any individual personal intelligence on that, but we spent the weekend trying to think about our earnings estimates and actually raised them because my initial reaction in April was to lower my estimates a lot and kind of say the 26 numbers were 27 and this

tariff stuff's gonna be bad. And I took a look pretty hard over the last couple days and said, well, maybe I was too harsh as my initial reaction. So I don't know if I'm playing checkers or I'm just playing chess. I don't know, maybe you were attempting to play chess, but you overthought it.

I mean, a lot of what people had feared was gonna happen, hasn't happened. Maybe you were among that cohort that thought things were going to deteriorate a little bit. Well, I think we didn't have that, you know, taco phrase about terrorists, right, that Trump chickens out on what he says on the terror front. And I sort of thought, wow, this is going to sort of create a bit of a pull forward in demand.

It's going to create some volatility in the PNLs of companies. But taking a step back, you know, one we saw when we had some inflation last cycle, although there was a much stronger GDP then, that the big 50 companies were kind of immune and the big 50 companies are half the gross profits of the market. The financials are in good shape.

And so you're left with looking at the rest of the companies and what could happen to their margins. They are down the last couple of months, but the dollar isn't going to hurt for the multinational ones. You know, looking at oil today and other input costs, if you look at like a broad commodity index, I don't think that hurts that much. So I think I was just a little too harsh about what it would do, and so far it's held up. I think the institutional investors I talked to think there's a risk we hit a soft pocket August through October, inventories are high in a lot of economically

sensitive places, but I still think we're dreaming about AI stuff next year and that's why it's hard to get too negative. But you don't have to be a geopolitical expert to sort of assess what's happened already in the Middle East, thinking about and gaming out what potentially could happen from here. Obviously escalation, bad for stocks, de-escalation, good for stocks. Closing the Strait of Hormuz, bad for stocks.

Not closing it and having this be the degree of the retaliation, it's good for stocks. That's how the market seems to be reacting. Yeah, I guess I just would say, and you know this, it's just with a one hour or one day lens. I still don't know everything from do we really know what damage we did in Iran to how long would they close the strait? I mean, there's so many unknowns that when I think about the earnings impact with the

biggest 500 US equities, I think the correct response is not to overthink it, that they're probably not impaired that much. Okay, so are you bullish the market now from changing your view on earnings? Because why else, why would you be bearish? I think the challenge was the market rallied really fast. I thought from the lows in April, I thought it was a little ahead of itself.

And now taking a step back, yeah, I think the numbers are too high this year, but not crazy too high. And I think if I still can believe in this innocent until proven guilty way, that all the investments done in 23 and 24 have a likelihood of hitting the pianos of companies next year you know absence this being something worse than we see right now it's hard to get to negative when I still can dream margins are going up next year. Well that's the whole thing

you're already looking for next year you're already looking towards next year. Right and the reasons because remember you, our minds get messed up, but nobody knew about AI until really early in 2023. It's only been two years. I went back, you look at the four biggest firms, Morgan Stanley, Goldman Sachs, JP Morgan, UBS, take their November 2022 year-end outlooks for 23, economics and US strategy, the words AI,

letters AI, we'll use zero times in those eight documents. It's two and a half years ago, zero experts were talking about AI. We know a lot of the AI investments were two to three years initially before we see the benefits. That's not a knock on the experts, by the way. Nobody knew.

It just was ramping. So now we're saying 2026 is around three years after those initial investments. So either it was all an unmitigated disaster that's the biggest hype ever, or, and I'm in that game. Right, and I don't think it's that, or we're gonna start seeing the benefits next year.

So I think it's hard to get too negative when I still can think there's gonna be some better predictive analytics deployed into companies. Not to mention the idea of the Fed cutting interest rates, and that's a big story. Steve Leesman joins us now, our senior economics correspondent, because if you believe what the most public Fed speakers

of the last couple of days have talked about, you should believe that cuts are coming. Could come, yeah, for sure. It's definitely in play. It's getting more interesting, Scott. We now have three Fed officials talking about the possibility of rate cuts if inflation remains subdued, beginning as soon as July raising the stake for Fed chair Jay Powell's testimony for Congress tomorrow. Take a look at what's been said. We had Waller on air Fed

Governor Chris Waller on our air on Friday. He said I think we're in the position that we could cut as early as July this morning. Fed vice chair for supervision, Michelle Bowman saying if inflation remains contained, I would support lowering rates in July. And then Austin Gould from Chicago, a little more circumspect, but kind of direct. He says, if the dirt, talking about the inflation from tariffs is out of the air, I think we should proceed.

And then with cuts was the meaning of what he was saying. So what's happened to the probabilities? July up to 23% from 10% before Waller talks of Temporary 83% from 62 December 84% from 66% all of this coming of course with more uncertainty about the island from hostilities in the Middle East But if oil is the main conduit for economic effects, then it looks so far emphasizing so far like that effect will be minimal The question is whether Powell who was cautious and hawkish about rate cuts on Wednesday largely

because of tariffs, bends towards these recent comments from those in this committee who would like to move sooner or does he double down on his wait and see approach? Scott, get the popcorn, put your slippers on. It's not game 7 OKC versus Indiana but I think it's going to be interesting tomorrow. Well I'm just wondering whether market participants are going to find themselves in a place that this tariff inflation worry was a nothing burger and that the administration ends up being correct. That the people who came out publicly and said you're looking at it wrong it's not

going to cause the inflation that you think that it'll end up being the correct call. Time will tell and it's not ready to declare victory just yet, but there is a belief, and maybe it's growing, Steve, that you're not gonna have the kind of inflation problem that was sort of permeating the conversation at the very beginning of all this.

that was sort of permeating the conversation at the very beginning of all this. So, Scott, let's fill out the bingo card right now if I could, okay? July 6th is the employment report. Before I get to there, you got the PCE coming on this week, but we kind of know what that's going to be already. July 6th we get June employment. July 9th is when the president is supposed to decide on those reciprocal tariffs and whatever else is going on. July 11th you get the CPI and then the fed meets July 30th. So what I say 6, 9, 11, 30 are the three numbers you want on your bingo card that

you're going to have to watch. All of this leads and steps up to answering your question. Well, first of all, the question of whether or not we have weakening in the employment market. That's one thing. Two is whether or not the president doubles down, backs off. What did he do? Bowman expected in her speech today there to be trade deals and that was part of her optimism for a July cut. The 11th we get the CPI to see, was made just to come before the storm or was it exactly what you said? Then the Fed with all the other data that comes during the month makes a decision on July 30th Maybe what they do is a compromise is say hey We are good on what's going on and we could see cutting in the near future or maybe indeed they cut

I will point out that 23% for the July probability still pretty low. So the market is not really bought into this rhetoric from those three officials. And I mean you do get you get Jackson Hole in August. I mean is there is there an idea that Powell would want to have nothing happen between now and then so he can set the table if you will for a September cut, because we all remember the eight minutes of pain speech, literally eight minutes that he spoke for

before they started hiking rates, and then the pain came as we all witnessed. You know, we'll see. First of all, by way of background, Scott, given what the probability said, I was gonna take the whole summer off. That seems like it was a really bad forecast on my part. Not the only bad one I've made.

But it now looks like the summer is very live for the Federal Reserve. I think that's an important way to think about it. Jackson Hole should, I think, be about the framework review. The Fed's debate about what the overall framework for making policy looks like. However, what you bring up is important. It may be that circumstances dictate that the fed chair might want to step up or other officials perhaps that we have that we're going to be interviewing there and want to provide some guidance to the market about what's going on. So it's a very active summer,

a lot going on Scott and a lot going on with the fed. And that active summer, a lot going on, Scott, and a lot going on with the Fed. And that's not to mention, you know, we don't know if we've seen the last effects to think about what's going on in the Middle East right now. Yeah, no doubt. I mean, there are a lot of unknowns and we clearly understand that too. Steve, thanks as always. Steve Leesman, our senior economics correspondent. Now let's bring in New Edge welts, Cameron DawsonBC contributor high tower advisor Stephanie link AP is still next to me here Cameron everything into perspective today the price action what do you think so we think that there is this push-pull within equity markets right now we're trading at high

valuations at 22 times forward but you still have positioning that is still relatively underweight the recent update from the Deutsche Bank consolidated positioning shows that institutions are still just in the twentieth percentile. So we think that sets up for a pain trade in equities still being higher. But at 22 times forward, it means it all comes down to the earnings line. And to Adam's point, have we cut earnings estimates enough that they're now stabilized? We've seen them stabilize in the last couple of weeks, which I think is one of the reasons why this market has held up so well. The question is, could they be revised higher

if the tariffs aren't as onerous as people were expecting and if people think that economic growth holds up? I think that is the key determinant, whether or not this market breaks into new all-time highs or gets stuck in the recent range. Steph, how do you see it? Well, I think geopolitics will remain an overhang for a while. We're actually in a wait and see mode. We're headline dependent. But as an investor, I have to put that to the side

and just focus on fundamentals and what Cameron just said and what Adam said and what I have been saying for a very long time is that the economy is doing better than people think. The consumer remains solid. We have a manufacturing Renaissance, anything tied to data center and then if you do get Fed cuts earlier than expected that's icing on the cake in my mind and I do think that they should go in July because inflation has come down considerably and unemployment is creeping higher. Not bad at all, but it is creeping higher.

So now between now in the middle of July, when we get a lot of that economic data that Steve was talking about, you have earnings and earnings are going to start off as they usually do with the banks. And I think the banks are actually going to be stronger than expected, led by M&A, led by capital market strength, net interest income that has bottomed, and deregulation. And oh, by the way, one last thing, Scott, I'm really surprised the banks aren't up more today after the speculation that Bank of New York is looking to buy, acquire Northern Trust.

And it'd be really interesting to see if the regulators would let that go through because that's the number one player and the number five player in the Consolidial business so if they let that go through they're gonna let a lot of things go through and I think that's gonna be a nice tailwind for the banks. Anything she say sound wrong to you? I mean I totally maybe the bulls are gonna have the last laugh. Well I totally agree with her on financials we're very overweight I think the earnings are more achievable in other parts of the market I'm not sure we'll get the M&A stuff yet

But I kind of get in some and a couple IPO market. I feel showing big signs of life different Yeah, there's been some pockets there. I think M&A has been a couple case-by-case things, but that's good news It's not in the numbers yet. I think it's it's So I agree with the financials call. We're definitely overweight that. What about the whole overall market view? I think the Fed thing though is super interesting. I'm not as convinced that if they cut it's like awesome bullish for equities. I'm very convinced that I know what to do when they do it, which is upgrade discretionary from an underweight and start buying housing stuff. I think it's going to cause a rotation underneath the market more than I think it's just going to be awesome for equities that day.

But isn't, well who cares about that day, but isn't broadening out like that good? And the Fed's going to initiate that. It could be. The biggest three sectors in the market, which are tech, financials, and comm services, are 57-58% of the S&P. So the question is, do you sell some of that stuff that's ripped and fund it for the worst performing sector discretionary and housing which is lagged? I think you're going to see that housing part work if people start really believing July is when they do

it. The key thing to watch though is that when the Fed cut 100 basis points last fall, the tenure went up by 100 basis points. So there's no saying that if the Fed cuts that you're not going to see this steepening of the yield curve with the bear steepener at the long end, which housing stocks will not like and housing activity is absolutely abysmal. You need to see the long end of the yield curve come down, but if we've learned anything in the last year, it's that the Fed does not have control or influence over that. Yeah. Are we, are we Fed dependent in any way, Steph, at this point or no?

that. Yeah. Are we fed dependent in any way, Steph, at this point or no? No. I don't think so at all. I think it would be a positive if they do go earlier, as I mentioned, but we don't need the Fed because the economy is hanging in just fine. We're running to two and a half percent GDP growth, Scott. At the same time, inflation has come down. And oh, by the way, this move in oil, we just had a 26% move in oil prices in crude, right, since May. Now you're seeing a pullback. That'll also be good for inflation and input costs as Adam mentioned. Well, I mean, one day doesn't a pullback. One day doesn't a trend make, though. I mean, let's be honest, right? It's moving lower today in reaction to what happened over there. You can't make any declarative statement that, well, now oil's moving lower again, so that's

going to be great for everything it we just don't know that i think it's going to move down i think it's going to move lower because i think we have a lot of supply out there a lot of excess supply and we have producers that here in the united states are producing still a lot and so i think if anything the u.s. players are going to gain market share over this whole thing but i do think oil prices are capped here. I think they go lower. Look, last time when we had inflation after COVID, we were running what, 9% nominal GDP.

So I think the difference this time is demand won't cause. We had both the supply problem of shutdowns during COVID and we gave people helicopter money so demand was awesome. So you had prices go up from both sides. I think the consumerist step points out, in decent, slightly eroding, but decent shape. You've hated the consumer trade for as long as we've been having conversations.

Yeah, it's been our biggest underweight, and it's been the worst point sector. That's called a good call. Thanks for pointing that out, appreciate that. I think the question is, do we upgrade it in anticipation of the Fed or not? Is the Fed the cause of rotation? And my bias is yes. I totally hear anticipation of the Fed or not? Is the Fed cause of rotation? And my bias is yes.

I totally hear Cameron on the housing call. They've been bad. I'm just saying would there be a short-term trade on that rotation? But yeah, the challenge is this home price is still too high and the 30-year fixed hasn't come down the same way the 30-year yield has. There's that lag. So I still think housing isn't great. I just think there could be a short-term trade if they do it.

I just watched that $68 on WTI. If we start to carve out a potential bottom in crude, I completely agree with Steph that you saw the overbought condition, it's pulling back from that. But if that trend starts to change, that sets up for a very different picture than the last three years, where oil prices and gasoline prices have been in a downtrend,

it's been great for CPI, it's been great for consumers, great for the Fed. If that starts to change, big if, that could be an interesting wrinkle. What about the idea that looks can be deceiving in the market, Cameron, that yes, the S&P is but 2.2% away from a new high, yet below the surface of this market, you still have so many stocks

that are below their 200-day moving average is one of the notes today that we reference on halftime suggested does that matter the breadth of the market bad it does matter if you look at the equal weight index it's adding near relative low from the year-to-date basis so for all of this strength We've had equal weight stocks have been under performing and it speaks to what's driving this narrowness in the market is earnings narrowness in the market is earnings narrowness. You're continuing to see value earnings get absolutely slashed and what's holding up or drifting higher is growth earnings and the growth index is about 60 percent mag-7. So this is again

back to being a very narrow market driven by just a handful of names. Steph where are all your notes today on I just bought this and I'm thinking about buying that and I'm looking to upgrade this. I don't see any of that today. That's not like you. That's because I went from 9% cash in February and I have 1% cash today. So I would have to sell something to buy something and I don't want to sell anything. I actually like what I own. And I do think financials is an area, I still like industrial a heck of a lot.

With Adam on discretionary. I'm there a market weight, but I think that would be a real big upside Opportunity if the Fed starts to cut and you know, I'm a bull on housing We just need mortgage rates to be closer to six versus seven. Yeah, maybe even lower than that All right, we'll leave it there Steph. Thanks Cameron. Thank you. See you stay P We'll see you again soon to Christina parts of novelist for a look at the biggest names moving into this close. Christina? I've got a big name. Shares of Hims and Hers plummeting 32% today after Nova Nordisk announced it was ending its partnership with the telehealth company. Nova Nordisk raised concerns around both the legality and the safety of Hims and Hers sales of knockoff versions of their Wegovi. It's the popular weight loss drug.

Nova Nordis shares also falling today about 5.5%. Shares of crypto and fintech company Circle popping today after the other fintech firm Pfizer did announce, I should say Pfizer, did announce a foray into the stable coin space, including a partnership with Circle. Circle continues really to climb since its IPO, which initially was at $31. It popped about to $255 just two and a half weeks

ago. And you can see it's trading at $263, up almost 10% right now, Scott. All right, Christina, thank you. Christina Parts, the Nevelist. We are just getting started here on the bill. Up next, Goldman's Tony Pascarello. He'll be right here. Tell us how he's navigating these markets these days. That's right after this break. We are back. Markets have been resilient in the face of today's news out of the Middle East. For more, let's welcome Goldman Sachs' Global Head of Hedge Fund Coverage, Tony Pascorell. It's good to see you.

Welcome back. Thanks, Scott. What do you make of the market? It's a pretty interesting market. Very interesting. So let's start here. Obviously, a very fluid, very complex geopolitical backdrop. I would say if you observe kind of the constellation

of market moves, if you observe client activity on our trading floors globally, very much a sense of calm. So why is that? I think in this context, crude oil is my true north. I think the options market gave you kind of an interesting tell going into the weekend. So a bit of risk premium in the front end of the options market, as well as the futures market, not much in the weekend. So a bit of risk premium in the front end of the options market as well as the futures market not much in the back end. So for example like

a 12-month expiry option on crude oil was trading below the implied volatility was trading below the average of recent times. So the oil market was telling you in a very discreet sense, yes there's some near-term event risk, it's not it is not anything more than that, it's not a longer-term risk and that's exactly how kind of collectively markets are trading this today. You mentioned, you used the word calm when talking about your clients.

We're talking about hedge funds, biggest investors, right? The word has been that they have not been on the bullish this markets going up train. They've been a little slow to react to, you know, I don't know if it's a fast moving market, like a wall of worry, it continues to climb. Is that fair? Is sentiment changing to the positive among hedge funds?

I think that's fair. So if I use my kind of preferred gauge of minus 10 to plus 10 to characterize positioning, I put current length held by the hedge fund community like a plus five. That is both the discretionary crowd as well as the systematic crowd. I've been on the road a lot. I was in Chicago, I was in London last week, I'll be in Boston this week and it kind of

checks out anecdotally what we see in our data set. What gets plus 10 then? I think a clean move up and through the highs on incremental good news. You've got to see it first to believe it. I think that's probably right and if we were sitting here when the highs were made in February, or even at the end of last year, or maybe even last summer, I would have put that length at like in seven and eight or a nine out of 10. So relatively speaking, I think the hedge fund community is pretty sober in the risk.

What about within the market? Part of your note out over the last couple of days was that sentiment around tech has warmed, I think was the word you used correct? Here we are again. I think it kind of goes back to this conversation you and I have had year after year Which is for all the challenges tariffs deep-seek here We are with capital starting to make its way back So the kind of the world's greatest companies us make a cap tech and I think it's really rude in this idea that

No other set of companies are generating capital And I think it's really rude in this idea that no other set of companies are generating capital, returning capital, and reinvesting capital on the order that the Magnificent 7 is. And even away from the Magnificent 7, just in recent weeks, what we heard from Oracle, what we heard from Broadcom, I think affirms that thesis very much. I mean, you've been a keep it simple, keep your eye on the prize kind of thought about this market. That doesn't sound like it's changing at all. I mean, are you ready to declare a broadening

bunch more winners than you might've thought? I'd say my highest level of conviction still resides in the tech space and then kind of like the attendant power theme. So I'd keep my eye on those two themes very much. You know, this question of the broadening or not I find it a little interesting within within large cap things have been pretty broad I think there's 11 headline sectors of S&P 500 nine of them are up on the year so I'm a continued believer

in S&P 500 I'm much less of a believer in small cap. When you assess what's happening in the Middle East as I said no market participant here is going to be a geopolitical expert, but you're thinking about scenarios in which you'd be more or less bullish. If what we saw today in the response by Iran is the bulk of their response, at least from a military standpoint,

you take from that and you mean what? So I would level set it again in crude oil, which is my North Star for Navigating. So whatever crude does is you're gonna decide what you think equities do? I think, well, I think locally that's going to set the tone for risk. And so our view going into the weekend was Brent crude oil was going to $60 by the end of this year and into the mid-50s next year. We have not revised that forecast. So that should be again, short term, a good backdrop for risk. I think the bigger picture is, we still think it's a bull market.

We think US growth holds up and gets back to trend next year, plus 7% earnings growth this year, plus 7% next year, as earnings goes typically, as we know, so goes the market. And so we've got S&P going to 6,500 out 12 months. I think that's a reasonable base case. Earnings have to be good, though,

to justify the valuation of where we are today I think you're going to have to do the heavy lifting and they will I think so I think so and again I go back to the first quarter which is old news but it sets a tone and trajectory for the second quarter and I'll go back to Magnificent 7 year on year earnings growth was plus 32% the rest of the index a very respectable plus 8% but I think corporate America retained a lot of momentum through all the ups and downs of the first quarter. It's going to be a show me story, but I think you're supposed to bet more on the right tail than the left tail.

Even with front running and front loading and all of that, which might have skewed a little bit of the picture. Yeah, so you're right, which is by the way, U.S. economic growth will probably slow over the second half of the year as some of the front loading effects finally bleed out. Set against that, you still have U.S. fiscal spending. For all the talk of Doge, you still have U.S. fiscal spending up 7-8% on the year and a tremendous amount of capital still flowing into the AI CapEx build. And rate cuts real quick? What do you think?

So we don't necessarily see them. I'm not sure the market needs them right now. Again, if I used my client trip last week as a litmus test, it's kind of conspicuous in its absence how little people are talking about or depending on the Fed right now they're very much in the back seat so I don't think it's a necessary condition for the market to grind higher from here. Alright we'll see you soon Tony thank you. Thanks Scott. Goldman's Tony Pascarello back at Post 9 with us up next Maryland Bank of America's private bank Chris Heisey he's mapping out his mid-year outlook he'll tell you what it is next.

All right, welcome back. Joined now by Maryland Bank of America private bank CIO, Chris Heise. Stock's having a pretty good go of it. It's nice to see you back here. You too, Scott. I've heard from the notes, like you're pretty bullish. You expect earnings revisions to go up,

productivity and margin protection, just the beginning. Oil price is not spiking, tariffs gonna be quiet, financial conditions easier, tech leadership. Did I get that right? You're pretty bullish? That's the ladder. That's the ladder we climb. Yeah, all that has to go right?

Some degree of it, but not all of it together, but certainly unfolding as we head into 2026. And too much has been talked about negative surprises, and obviously so, right? I mean, there's been a lot of negative surprises, particularly what occurred over the weekend. But it hasn't impacted earnings to a level that everybody expected.

It hasn't impacted the consumer to a level that everyone is expecting. And yet, we still haven't seen the price h a level that everyone is expecting and yet We still haven't seen the price hikes from the tariffs, which we can't say that's not coming Certainly, there's some signs of the on any of the things you mentioned because someone could just come back and say yet We haven't seen that the inflation from the tariffs yet, right? We haven't seen oil prices necessarily react to what could potentially happen there yet But you don't expect any of that to be material. It's not material and if you build a strategy off a yet you've basically underperformed for a

really long period of time. Well that's beset a lot of investors over the last couple of years right I mean when the Fed even started doing their hiking regime but well we're to have a recession, but we haven't had one yet, never materialized. That's right. Inverted yield curve never happened before that long of a period, but yet not going to recession. So you have to ask yourself each step of the way,

what is the resiliency factor? Has something really changed in this last few years? And we think the learning's coming out of a terrible healthcare situation called the pandemic of what corporations had to do to get through that time period, they've kept those learnings and they've been able to maintain margins and yet what do we have now? Generative artificial intelligence, producing efficiencies and still people are skeptical about it.

And you think earnings are gonna be able to justify not only where the market currently sits, 22 point whatever times, and you could get multiple expansion? Not yet, not yet in that card, right? To that point where you can go from 22 to 23 or 24 times. Sure you could in a blow off top, right? But at the end of the day,

it's really about profitable production. And that's coming in 26. You're not going to see it in third quarter and fourth quarter. All of a sudden you see massive positive revisions. But for fiscal year 26, that's what we believe. And you're not, when you look at the events over the weekend that you referenced and the retaliation today and the way that the market has held up in the face of that, are you declaring that you think this is the extent of it? And no, you're not. Well, what happens if it gets worse? Well, we've seen periods of time over the course of history

that it's just not one event and it stops. So you can't expect further escalation. But the markets are telling us right now, particularly the oil markets, that there seems to be an antidote out there. And that means no further escalation as to what the worst case scenario is. Again, early days.

That's probably why the market reacted the way it did today, right? Because you send missiles towards a base, you alert people that the missiles are coming, you don't shut down the Strait of Hormuz, as the other sort of the, I hate to say nuclear option because we're not really talking about like that, you know what I mean? But that would have, the market would look way different if that was on the cusp. It would have been similar to the other precedents

that happened over the course of time in history and right now you're starting to see I think oil at one point in time today was down 5%. So the question is, 30, 60 days ago, did something get into anticipatory up ahead of all this? I'm not a geopolitical strategist. But what I'm focused on right now is why is the market at 22 times earning right now? It's there because of the companies that make up the index. And is this a trampoline event overall for the tech sector to become the leader again? We think so. Well, it already has, hasn't it?

It has since April 2nd. Well, that's what I mean. That's why we're in 2% away from a new high. Exactly. But if you look at one year ago from today, it's almost a round trip. The rest of the market has helped up the leadership of tech. But now if tech takes that leadership again, that's where you get your move higher that people are not expecting.

Alright, we'll leave it there. Chris, thank you. Thanks, Scott. Chris Heisey right here, Post 9 Up. Next, we track the biggest movers. Into the close today, Christina Parts-Nuevulos is back with that. Hi, Christina. Hi, Scott. Well, a major wealth management firm surging 7% after rejecting merger talks, while a tech hardware company tumbles on news of a massive debt offering that could dilute shareholders. Details when we return. All right, we're about 15 from the closing bell.

Back to Christina now for the Stock She's Watching. Tell us what you see. Well, let's start with Northern Trust shares because they're up about 8% after the bank said it's committed to remaining independent. This is according to Reuters and this happened after a report from the Wall Street Journal last night night said the Bank of New York Mellon had approached the wealth manager about a potential merger. The report also said BNY was even looking at submitting a formal bid to Northern Trust. You can see Northern Trust shares up seven and a half percent right now. Meantime, Super Micro, the S&P

lager today, the worst performer after the server assembler announced plans to offer $2 billion in convertible senior notes due in 2030. The proceeds will help fund working capital needs, but shares you can see are 9% lower because convertible notes can be exchanged for stock, which would potentially dilute existing shareholders' stakes, hence the fall. Scott? Alright, Christina, thank you very much. Christina Partson-Nevola still ahead. Tesla shares charging higher today. Tell you what is driving that move coming up. Bell will be right back. The All right, coming up next, we'll run you through what to watch for when KB Home reports an OT.

That and much more in the Market Zone next. We're now in the closing bell Market Zone. CNBC senior markets commentator Mike Santoli here to break down the crucial moments of this trading day plus Tesla the top S&P 500 performer Phil LeBeau with the details there. Diana Olick looking ahead to KB Home in OT. What about the highs of the day Mike? This is a pretty interesting price action and a response to what we're watching over in the Middle East.

Whenever you have one of these fast-moving geopolitical situations that everybody is fixated on and you have all the lights on it, it has the potential for being a chilling effect on risk or a clearing event for risk. And I think you've kind of moved through those two possibilities over the last 24 hours, let's say. It's interesting that the market was willing to kind of back off and wait and see and get the inference for exactly what this was, which as I was saying at noon, if you at least had to be open to the possibility,

this is kind of a stage managed, face saving exchange. Okay, that's where we are right now. Where does it bring us? Brings us back to, okay, last Thursday's high in the S&P 500, we're releasing tension a little bit. I think one of the reasons we've been able to stick around these levels for weeks, really, just kind of tethered to 6,000,

is because it's not a new level. 6,000 we first got to in early November. So we're eight months in, earnings are up from there, you're at the same price level on the S&P, you're down one PE point from 22.5 to like 21.5, credit's fine, and all of a sudden people are talking themselves into the idea that tariffs are going to be like magically absorbed into the into the economy without that much disruption. It might be the case, but I do think it's interesting how we're kind

of now glass half full at the same level we were at a few weeks ago. It's probably, you know, constructive here, although you've got to see exactly what carries us to the next step, because today, Tesla's not going to be up 8% every day. Sure. Maybe it's a continued softness in oil. Maybe it's something that Powell says tomorrow. He's not going to surprise you more than likely because this appearance coming so soon after the Fed meeting.

He's gonna try not to surprise anybody. He's gonna get a lot of questions. He's gonna get pounded from many Republican members to say, why aren't you cutting rates? And the market is starting to kind of edge in that direction too. He yields down quite a bit to that. Not only the market, I mean Bowman and Waller.

Well right, and that's why the market is I think getting dragged that direction. The point is you can construct the case for you know for why we've been mostly just kind of consolidating and building a new base and maybe gathering up some potential energy we'll see if it does play that way. Yeah not to mention Gulsby who sounded like he had a toe back in the water almost wanting to put his whole foot in but we'll have to wait and see. All right, Phil LeBeau, Tesla, as we said, biggest gainer on the S&P.

This is all about what was a pretty limited robo taxi rollout? It was very limited, Scott, and if you got an invitation, by the way, mainly to influencers, people who are very positive about Tesla, so they could post on social media. What you saw, if you go and you look at those videos, this was an uneventful launch yesterday in Austin, Texas, limited to a geo-fenced area, 10 to 20 vehicles providing rides for most of the day. Analysts, they all came out with notes today saying, clean start, now what?

How quickly will service grow? That's really the bottom line here. It's not that they've started a RoboTaxi service. It's whether or not they can ramp up as quickly as many believe they have to in order to catch up with Waymo and other competitors who will be out there. By the way, UBS raising its price target on Tesla today to 215 from 190. And as you take a look at shares of Tesla over the last year, keep this in mind, Scott. Next week is when we get Q2 deliveries. That is a data point that you don't need influencers for that one. What you get are the numbers and that will tell people just how much deliveries are struggling

relative to last year. Therein lies the tension, right? The fundamentals of the current business versus the dream of what Elon Musk really wants this company to be and that tension meets and we'll see what happens. Absolutely. And look, he has said, optimists and autonomists, those are the future for Tesla. Yeah, Phil thanks. Phil LeBeau. All right, Diana, tell us about KB. What to look out for. Well, stats, KB is the second builder to report after Lenar's mixed report last week. KB had already reduced its full year revenue guidance in its Q1 results back in March,

as it noted, quote, muted sales. CEO Jeff Metzger said in that report, consumers are working through affordability concerns and uncertainties related to macroeconomic and geopolitical issues, which are causing them to move slowly in their home buying decisions. Has that changed? We'll see. In that report, though, the company also decreased its average selling price and margin expectations. We'll be watching to see if they continue to drop prices as the supply of newly built

homes is pretty heavy right now. KB is on the lower end of the price ranges, so that could help. Mortgage rates, though, were rough during the quarter, shooting over 7% in April and settling into this very narrow range right around 7% in May and still around there. Now, we'll see if KB got any boost from markets settling in May and this new normal in mortgage rates, Scott. All right, Dan Ollick, thank you very much. We'll see you in OT when those numbers hit.

This housing market needs some sort of, something, some spark. There's no doubt about it. It's probably kind of exhibit A or B in the dovish case for why the Fed should be leaning toward cutting rates sooner than not. Now, we don't really know what happens to long-term rates and mortgage rates if in fact we go 25 or 50 basis points lower

on the short end, but there's no doubt that that is a restraint on overall growth. It's a restraint. Residential investment, residential construction is not really carrying the load for the economy right now. So you put that in kind of one category. On the other side, obviously the AI theme kind of has no quit.

What I'm interested in though is the way the market has decided to just get so frisky about these things. I mean, you have all these new follow-on ideas that are moving. We mentioned Tesla, you know, up 8% on honestly, really not much of anything new. You have Circle today, up huge again, a recent IPO. It's up massively in a few weeks. Now Circle's the new CoreWeave. CoreWeave was the new Supermicro. Supermicro was the new NVIDIA. So we just kind of keep finding new ways to get speculative, overexcited in the short term. I was talking last week about how that can mean

kind of an erratic flow into the market, but for now it's helping. It's actually keeping people interested and it's keeping it hard to be short or bearish on certain parts of this market. So I think when we came back to within 3% of the all-time highs, that happened a couple of weeks ago, it was very, very plausible, in fact, very probable that eventually within

weeks you're going to probably make a run at those highs. We're still in that situation right now, kind of within striking distance, and it took a scare, it took a tariff scare to kind of pull back the slingshot and get us higher. Maybe it takes another geopolitical scare as we got to sort of again create that shakeout recoil effect and we'll see if that's enough. But you know we've just noticed in one day how quickly the story can change and how quickly we can sort of reinterpret the same events in a more positive or negative way. Yeah well the market's not going to take its eye for any reason off of the middle east to see you know that this was it and see what happens to the oil market.

Obviously oil falling sharply today helped the overall picture because we're going to go out pretty much at the highs of the day. Dow is pushing 400. You're going to go 60-25 on the S&P. Good for 57 or so points there. So we'll watch all of that. We'll send you to overtime with the bell ringing So we'll watch all of that. We'll send you to overtime with the bell ringing

and we'll see you on the other side tomorrow. Yeah! Yeah! Yeah! Yeah! Yeah! Yeah! Yeah!

Yeah! Yeah! Yeah! Yeah! Yeah! Yeah!