Closing Bell - Closing Bell: The Future of the Rally 8/4/25

Episode Date: August 4, 2025

New questions swirl about the heath of the US economy and whether the Fed will soon cut interest rates. We discuss with DoubleLine’s Jeffrey Gundlach. Plus, we break down today’s big bounce with Bank of America’s Chris Hyzy and NewEdge Wealth’s Cameron Dawson. And we set you up for all the big earnings in Overtime. 

Alright guys, thanks so much. Welcome to Closing Bell. I'm Scott Wabner live from Post9 here at the New York Stock Exchange today. This make or break hour begins with a bounce back in stocks. We'll show you the scorecard here with 60 to go in regulation. It's been a strong day across the board as you know by now. The market reacting to Friday's jobs report and prospects for coming rate cuts. We'll discuss all of that. Tech is leading the way today. Every mega cap green with the exception of Amazon, which is down 1.2 percent. Comm services, utilities, materials also are nicely higher today. It does take us to our talk with the tape, the future of this rally, as new questions swirl

about the health of the U.S. economy and whether the Fed will soon cut interest rates. Joining us now at a CNBC exclusive interview with his first reaction to last week's Fed decision and jobs report is Jeffrey Gundlach. He is the founder, CEO and CIO of Double Line. It is good to see you. Thanks for being here. Good to be with you again, Scott. So you now have the benefit, of course,

of not only the Fed decision having been made and hearing from the chair, but you have a jobs report to think about in answering my first question, which is, did the Fed make the right move last week by not cutting interest rates? Well, I think that's up for debate right now. One thing that Jay Powell said, he said, one of the words he used was, we want to be efficient in the way we manipulate the Fed funds rate. I'm not really sure what he meant by that. But he seemed to be relying a lot on the

fact that he has two sets of inflation and jobs data that were going to come in between that meeting last Wednesday and the one upcoming. And it was certainly quite a week for data. You had GDP that came out pretty good. And then you had the Fed meeting and lots of interesting cross-currency at the Fed meeting. And then you had that wild jobs report that changed everything. So I'm actually sort of glad that we took a rain check on doing it last week, because you're right, so many things have come in.

I thought that Powell was quite hawkish at his press conference. He actually said in response to one question, in a way, we are looking through the current inflation data, otherwise, we might have raised rates. I don't think there was a single question at the press conference about raising rates. It was all about cutting rates. It was all about cutting rates. And I thought Steve Leesman characterized the meeting very, very well. He said, basically, Jay Powell said we are at our employment target, and we are not at our inflation target, which I think is a fair characterization by Jay Powell and Steve Leesman characterizing it that way.

But then all of a sudden, it looks totally anachronistic since we had that jobs report with its 250,000 plus jobs being eliminated or revised away. So suddenly, we have this gap between the Fed Funds rate and the two-year treasury, which wind out dramatically last Friday. It was about a 25 basis point move down in the two-year treasury. So now we're getting at that strained level again,

where the Fed Funds rate is 70 basis points higher than the two-year treasury rate. So the two-year treasury is looking for a rate cut. This is very reminiscent of exactly 12 months ago when we had the September meeting, and they had to cut rates 50 basis points because they should have cut them, perhaps, with benefit of hindsight in the July meeting. And that kind of feels like where we are again. It's not as bad as it was a year ago ago where the two-year treasury was over 100 basis points

below the funds rate, but 70 is quite a lot by historical standards. And so there is talk in the air of if indeed there is another weak jobs report or revisions lower, people might be talking about a 50 basis point rate cut, we'll see what happens there. I feel like this data that is coming out is getting much less reliable and this has been building for a long time. People are saying that the surveys that get sent out to be filled out for the jobs report, only 60% are being responded to, to be filled out for the jobs report. Only 60% are being responded to, and that's been rising over time. Also, the CPI data is getting suspect. Several years back, about 8% of CPI input prices were estimated. They call them imputed prices. Now, it's 35%. It's jumped way up. So 35% in the most recent CPI report of the inflation inputs are just made up.

And so people are starting to get really worried about the reliability of a lot of this data. So I think it's almost a certainty at this point, unless we get a mirror image of this jobs report for the next one coming out, I think it's virtual certainty that the Fed is going to cut rates. In fact, now, even though there's not that many meetings left in the year, we're starting to see market pricing of perhaps as many as three rate cuts this year. I'm skeptical of that. One thing I've been consistent with all year, starting with the January conversation we

had, Scott, is I said, I think two rate cuts maximum here in 2025. Now, I think that the data has weakened so substantially with these revisions that it's possible that we get a third, but I still think my base case is two rate cuts this year. These revisions are strangely statistically on these because these job revisions seem to almost always be negative. Biden had 48 jobs reports over four years, and 45 of them were revised lower subsequent to the first release.

So some people kind of cynically say maybe they like putting a rosy number on the headline because everyone pays attention to the jobs number on that first Friday of the month, and the revisions usually get a little bit swept under the carpet. These were so big, though, that it was kind of like a bomb went off, and the two-year Treasury yield went way down, 25 basis points. Interestingly, the stocks recouping more than half, well more than half, I think, of their losses from Friday,

the two year treasury yield is basically unchanged. So that pricing ruins intact. Well, because you've always made the argument that the Fed follows the two year. And I'm wondering if what we're seeing in the equity market today is stock market investors starting to think that, well, we're going to get rate cuts now. If you can believe in any way, shape or form that the labor market is going to be weakening, as this data would suggest, then rate cuts are in the offing.

So why not buy stocks? I feel like that's where we are today. What do you think? Lower rates are supportive of stocks, obviously, and it kind of takes off some of the pressure for the valuation being so high because you're gonna get rate cuts. Well, then the valuation will not look quite

as overextended. So it's not surprising at all that the market recouped because the two-year yield has not gone back up today. The mentality of the fixed income market is that the reaction that happened on Friday remains sensible. Yes, the probability for rate cuts has clearly gone higher. I still think that one of the big impacts we're going to have here, though, that we've to watch out for is the US dollar index has been falling.

It's back below 99 again. And it really is amazing that commodity prices can't get any traction with the dollar falling pretty substantially over the course of this year. It suggests that there isn't all that much of an inflation problem. People are focused on these tariffs and they're worried that they're going to be inflationary. Jay Powell says that it might be a one-time inflation increase. There's some logic for that and certainly some parts of the consumer markets. What really affects inflation is money supply. It's Milton Friedman famously said,

inflation is always and everywhere a monetary phenomenon. Tariffs do not increase the money supply. It's going to have an uneven effect. Some prices will probably go up, but it'll take demand away from some other places. The money supply, M2, is up 4.5% year over year. It's actually been expanding at an increasing pace, not in an alarming way. And there is some seasonality to it. So typically, as we get around the end of the year, for whatever reason, the money supply tends to level off. If the money supply keeps growing at 4.5% on a year over year basis,

I wouldn't be worried about the inflation rate not coming down to the extent that the Fed wants to see it down to 2% or so. The inflation numbers that I give the most credibility to always are the actual prices, not all of these adjusted things for quality and price of a TV goes down a whole bunch, yet the quality of the TV is so much better. And so there's this multiplying effects. I think import and export prices, which is a monthly number that comes out that are not seasonally adjusted, are really the best measures of inflation. And they're really not that alarming right now. Import prices are actually slightly negative year over year for the US. And

export prices are up about 2.7. So if you kind of average those two, we are fairly close to the Fed's target. But Jay Powell spoke a number of times about maybe we should raise rates. I had the impression that he was being just a little pushback. He doesn't want to be muscled around by politicians and President Trump. And so I think he was a little bit laying it on, kind of off the cuff, a little bit thick on what was the potential for higher inflation. I wonder if we are at somewhat of an inflection point to things that we've spoken about in

the past. And I think you are referencing a bit here the tension between the two mandates, the fact that we now have serious concerns, I suppose, about where the labor market's going from here, but yet inflation by the Fed's metric is above target. So how can they act in that environment in one way or another something's going to have to win out?

When we were last together, you said of that, quote, at some point, one of these dual mandates is going to have to win out over the other one. And I think, and you've got to pick one, and I think they'll pick the fighting the rise in unemployment more than fighting the rise in inflation. Are we at this point where the Fed needs to pick sides after that jobs report? I felt, yes, I think that's built all year. It's curious that when we started our conversations this year in the January meeting, Chair Powell was more relaxed and more confident than he'd been in quite a long time. He was talking about how our policy's in a really good place,

we can wait and see. And as the year has gone along, the tension has continued to build. And it really hit a crescendo last week with, obviously the Fed's saying we don't wanna cut too soon, we'll risk an inflation problem if we wait too long, we'll risk a labor problem. Then all of a sudden, you had that bombshell of unemployment report.

Now the tension is at a local high for sure. I think that tension could very well grow. If the unemployment rate continues to rise or rises further above its 36-month moving average, three-year moving average, and it's well above it right now, and also the 2's 10's yield curve versus its 12-month moving average looks full on recessionary by historical standards, you just take a look at the yield difference between the two-year and the 10-year and map it against its 12-month moving average, and it looks exactly like it did right at the front edge of the last three, four recessions.

So I'm going to be watching that very, very closely. So the Fed really is going to have to pick a mandate, which side of the mandate, and I believe that really when push comes to shove, rising unemployment, should it take hold in a more aggressive way, will almost always win out over the inflation side of the mandate, because that's really where people live. If jobs are disappearing, then there's a demand by the populace for some sort of you know of action that will relieve the situation and inflation numbers you know i i think i think a small increase in inflation rate could be blamed on terrorists whether it's tear driven or money supply growing doesn't really

matter if it goes up you can believe it on terrorists and then this whole as jay powell has articulated that will be a sort of a one-time deal well just go ahead well well that that speaks to the dissents that that we got right from from Bowman and Waller where Waller says you're being you know overly cautious if you if you don't cut now and Bowman said well we should be looking through exactly what you're talking about, these one-time price increases rather than thinking they're gonna be something

more protracted. I'm wondering what you thought of not only the dissents themselves, but who they came from. It's not insignificant in any way that they came from two Fed governors. And we haven't seen anything like that in some three decades. So they hold more weight, if you will. What do you think?

Well, yeah, maybe one of them wants to replace Powell as Fed chair come the end of this term coming up in May. So we also had, there's gonna be another, Trump's gonna have another nominee to go on there. You're going to go to three dissents, almost certainly. After this employment report, I'd say that if they don't cut rates, if you get anything resembling this employment report again, I think there's going to be many dissents. Really, you're right, there's a little bit of turmoil going on between Trump's rhetoric and his veiled threats and these descents happening.

Things are changing direction from what we might have thought was normalcy. All these, earlier on, I talked about how the data quality is deteriorating, both the CPI and clearly these revisions on employment. It's strange that the revision, the 258,000 revision, almost half of it was from government workers. I mean, does the government not even know how many government workers there are? That just seems embarrassing, quite frankly. Now you could say that maybe there actually were some cuts from Doge. I don't know really if that's true or not, but that could have some sort of an effect

on it. But it is strange that the government can't really accurately calculate how many government jobs there are on a timely basis. You have to revise them to a very large extent. Months later, this is a lot of things have to be tightened up here. I remember when the Doge thing was going on, when Musk was still working on it,

they were saying they couldn't believe what terrible technology is embedded in a lot of these government offices where they're using ancient technology. I mean, they might be using floppy disks for all I know. This needs to be upgraded. Unfortunately, we've been spending money on things that don't increase the efficiency of the data or the reliability of the data.

Instead, we're spending money on, well, just borrowing money like crazy. We're still running a deficit. We're on track for this calendar year to have a deficit that's almost 7% of GDP. If this economy is weakening and if jobs are weakening, that's going to be a further problem in terms of the long end of the Treasury market. I've been negative on the long end versus the shorter end of the Treasury market. I've been negative on the long end versus the shorter end of the Treasury market. We had a huge move yesterday.

And now we're out between two year and the third year, we're out to about 110 basis points. And this just keeps on going. And I think that's very likely to continue, given the fact that the president clearly wants a Fed chairman that's going to cut rates and they want to finance the debt. There's very little that's financed in the 30 year. It's less than 2% of all issuance, but there's a fair amount that's on T-bills and the two

years roll over with regularity. It doesn't take long for two years to go by. And we have a situation where there might be collapsing interest rates with a much more dovish Fed chair come 2026 at the same time as we have a very high deficit, which is really a strange situation for who's going to finance the 30-year Treasury bonds and the 20-year Treasury bonds. We have been avoiding, even incrementally further avoiding a few weeks ago, the long end of the treasury curve. I still think that's the way to go.

It is interesting that since the... To avoid it. I just want to make that clear, because you have made the argument with me to avoid the long end of the curve. You'd like the shorter end, the belly of the curve, and you still want to avoid the long end of the curve. You'd like the shorter end, the belly of the curve, and you still want to avoid the long end. Oh yes, I mean the trend just keeps,

it almost never flattens. I mean it did I think in the month of July a little bit, but really it's a trend, you know. I've seen two 30s be 150 basis points many, many times. I would be quite strong on the idea that the two 30s will go to 150 basis points and we're at 110. We've had very bad performance from the long end of the bond market, even since the Fed started last September cutting rates. You know, the rates are down 100 basis points.

And typically when the Fed cuts rates, all maturities go to lower yields. But the long end is still significantly higher in yield than when the Fed started cutting interest rates. This is really the first time that has ever happened. And a lot of things are acting differently than they used to. I've pointed out there have been 13 corrections in the S&P 500 since around 2010 or so.

The first 12 of those corrections drops of more than 10% in the S&P 500. The first 12 of those times, the dollar went up when the S&P corrected. This time, when we had the trouble back in March, April, the S&P went into a correction, and yet the dollar went down by about 8%. Usually, it goes up by about 8% when you have corrections in the S&P. This hasn't happened ever before this cycle, at least in modern times. So a lot of things aren't behaving the way they used to. And I would echo back what you said, Scott, just a few minutes ago, that these descents by governors is fairly unprecedented as well. If things continue to, the old systems, the old data systems, the old protocols seem to

be weakening, if not reversing in many ways. I think that one of the reasons for all this is I think secularly, the dollar is headed lower and maybe a lot lower. We're right on a trend line that goes back to about 2010, maybe the late 00s, where we're sitting, if you look at the Dixie index, you just draw a trend line. There are two lows that the line connects, and where we are right now is right on that line.

So if the Dixie index weakens further, and that's likely if the Fed is cutting rates while Europe and Japan are not cutting rates, well, we'll break through that trend line and we could go much lower. And that's not good for the long end of the bond market either. It's very helpful to finance your debt when you have a strong currency. You know, when people are interested in buying your debt, you have a strong currency, but that's not the case right now. What foreign investor wants to buy into the dollar bond market if the dollar is depreciating?

The currency translation is just a capital loss for them. So I pointed out that since past 18 years or so, we've had about $25 trillion flow into US markets. That US position was $3 trillion, and it got up to $28 trillion, and that was reversing. It looks like money is not really coming into the United States the way it used to. When you're threatening tariffs and other punitive actions on trading partners, they're probably disinclined to increase their purchases of your debt, particularly at the long. I think this is a fundamental problem.

Yes, avoiding the long end of the Treasury market and investing in five years, five years, three years in the treasury market is good. The two years is getting less and less interesting because the yield is down to 370 or so. And it used to be quite a lot higher than that. But it started out anticipating Fed cutting rates. And the Fed did that twice, 50 basis points each. But now the two years is strongly signaling that bond investors think that the Fed should be cutting rates.

So that's what we're looking for. One last thing, credit spreads have been volatile this year. That's my dog, let him out. Credit spreads have been volatile this year, but point to point, they've hardly changed at all. Incremental yield for credit is quite low. Right back to where we were starting the year, we had a lot of volatility. Spreads widened by 200 basis points on emerging market debt and on junk debt.

Yeah, junk bonds widened out on Friday, but by 25 basis points, that's a lot in a day, but they're still pretty tight. So we're about 300 basis point OAS on high yield bonds, and it never goes inside of about 250. It did get there at the tights of the year, but now we're back to where we started the year, pretty much on all sectors of the bond market. So the strategy has been kind of unchanged for much of this year with not a lot of point to point volatility, but I still, the types of things I talked about in the past is still central to our playbook

and it's been working quite well. Jeffrey, let's take a quick break. I don't want you to go anywhere yet. We'll do that and I'll come back. I've got more for you on the other side with Jeffrey Gundlach of Double Line. You're watching Closing Bell on CNBC. MUSIC We're back with our Closing Bell exclusive, our interview with Double Line's Jeffrey Gundlach.

You know, Jeffrey, lastly on Chair Powell, before I I talked to you about some more investment ideas, there are those who make the argument that Powell should resign now to actually preserve the independence of the Fed, that he's in a no-win situation in a sense at this point.

If things work out great, the president takes all the credit and if things work out poorly, he gets, P Powell gets all the blame. Should he serve out his term or should he resign? I think he should serve out his term. I don't think him resigning says much about Fed independence. It's almost, it suggests to me that he's being browbeaten. And, you know, just, yes,

you're right, that Trump will take credit for everything good that happens and will blame other people, and in this case, Jay Powell, for everything bad that happens. But I just don't think it's a good idea for Fed chairpeople to resign. I think they should serve out their term and they should do that. You know, I think if Powell resigns, it's pretty obvious that we'd get a rate cut very, very quickly because you know that somebody that is rate cut oriented is going to be installed. I feel that that's kind of, it's just a question of when that happens. When Paul gets replaced, whether he resigns or whether he just serves out his term, he's

going to be replaced with somebody very dovish. That I think is very negative for the US dollar, and I think it's very negative for the long-term bonds. Again, all these trends just seem to be very firmly in place to me that the long end of the bond market cannot rally very much. It's interesting. We've seen the two-year treasury come down a lot, leading the Fed on, but we're not terribly far away from the high of the year on the 30-year treasury bond.

I say the same thing, I make the same similar comment in a different way about gold, something that I've been bullish on. Gold just doesn't go down. I mean, yeah, it got up there briefly to a high number, but it just doesn't sell off. It just keeps sitting there at 3,300, $3,400 an ounce. And one thing I've learned after all these years in this business is when something moves a long way and it just consolidates, it doesn't fall,

and yet has sometimes some good reasons for showing bigger correction, gold hasn't corrected hardly at all. I mean, if you're long gold, you haven't had anything to worry about. I mean, sure, there's volatility day to day, but the level has held up. It's doubled in price over the past couple of years,

and it doesn't show any signs of relaxing. I feel like these things are long-term trends that have started to develop, and I'm sticking with them until such time as there's some fundamental reason on the horizon why these things are going to change. If the economy is weakening, we're going to have more bond issuance from the US government as tax receipts would go down and expenditures would go up. We're starting at nearly 7% of GDP. We could easily see a budget deficit that's $3 trillion, $4 trillion in the next recession. That's not going to be good for long-term bonds. So I am sticking to my ideas that I've been developing over the past few years now, that

in the next recession, you are not going to see a long-term government bond rally in the United States. I thought you'd see one initially on a knee-jerk basis, and that indeed happened. But now we're closer to the high of the year on yields than we are in the low of the year. And this with, in the context of a weakening picture in many parts of the economy, most notably now, perhaps, one Robin doesn't make a spring,

but perhaps this employment report last Friday is more meaningful than we thought it was going to be on Thursday evening. So we'll see what happens. I think employment is clearly weakening. The establishment survey is the one that comes out on the first Friday of the month. There's also a broader survey, a household survey. The jobs created in the household survey are negative for the last three months, and the last six months, there's negative job growth

from the household survey. And so it's pretty clear that the labor market is finally, we always say it's a lagging indicator. It's not a leading indicator, it's a lagging indicator. And it appears that it's starting to fall in line with some of these other indicators, which have been suggesting weakness for quite some time. So that's where I think we are. And I think we're going to see the Fed cut rates at least a couple of times, probably two, maybe three this year.

So it's somewhat of a conundrum for investors. If you think the economy's weakening, you're like, well, maybe I don't wanna own US stocks at current valuations. However, as we already discussed, if the Fed's cutting, well, I don't wanna fight the Fed because that would be silly. So I might as well buy stocks,

but you've been favoring non-US.S. equities. Europe, Mexico, India. Do you still and how does that factor into what even you admit is going to be a rate cutting environment? The only question being how many? Yeah, these ideas are long-term plays. Particularly when it goes to risk assets, equities for sure, I take a very long view. Most people that watch CNBC, they're watching the markets minute by minute, certainly day by day, and they may be making adjustments week by week. I don't invest that way for long-term money, for risk assets, which is long-term money for me. I think that these non-US trends are absolutely wrapped up and in place

because the dollar is weakening, and it's going to continue to weaken as the Fed cuts rates and other countries don't. I think as a dollar-based investor, you're making money on the currency translation. And depending what day you look at it, you're having similar types of gains on just an absolute percentage basis. But when you translate it into the dollar, you're doing much better in some of these other places than you are in the US, unless you're in the momentum stuff in the United States, which just continues to set new highs. I'm just not a momentum investor.

I'm much more a value investor. It probably comes from my heritage of being grown up in the fixed income markets where less bond guys. Our job is to find 10 risks when there's only three risks. We're always trained to be, it's a negative science. You're trying to avoid risky things because in bonds, you make money slowly and you lose money quickly if you get into a default cycle.

Equities, I mean, I've been invested in India for years and years, and I just believe that the 20-year outlook there is very, very strong. And I'm a dollar bear. So I think foreign markets for dollar-based investors make a lot of sense. Okay, we'll leave it there. And we will see you next Fed Day, and we will see you in person too

at your headquarters in LA, which I look very much forward to. Jeffrey, be well, We'll see you soon. All right. Good luck, everybody. Yep. Take care. That's Jeffrey Gunnlock.

Up next, we'll have more on today's market bounce back with Bank of America's Chris Heise and New Edge Wells' Cameron Dawson. Closing bell. Coming right back. Welcome back. Stocks bouncing to kick off the week. Joining us now to discuss New Edge Wealth's Cameron Dawson and Maryland Bank of America's private banks. Chris Heises,

good to have everybody with us. Cameron, you first. Nice move getting all the Dow's losses back from Friday. Do I want to sell the strength? What do I want to do with this market? Well, we do think that you have to respect the momentum that the market has had. We're still in a very powerful uptrend. But as we've been saying that you're going into this August period where you typically see more volatility, usually forward returns or lower this time of year, that it wouldn't be surprising to see some chop as we move through August. It's not the end of the world. It's just to say that we've had such a powerful rally. You've seen

positioning now get more to a neutral level, valuations back up to their peaks that say don't be surprised if we chop from here. Chris, buy any weakness, sell strength. What's the strategy here? Keep going to buy out of weakness. There are no signs that profit estimates and revisions are going the other way. In fact, they're're going up not down. And the majority of companies are coming through with better than expected earnings right now. We don't

see a peak in that so we're going to continue to ride the profit wave here and therefore we're going to continue to buy on weakness and particularly the areas that are exhibiting not just strength in price and news momentum but also earnings

momentum. What do you think today's about Chris is this rate cut momentum. back in the market. I mean I have some saying bad news is bad news again but this market today is acting like bad news is good news because you're going to get rate cuts and even Jeffrey Gundlach who's been reasonably skeptical of the number of cuts you get says well you're going to get two maybe even three. Take some of that funds futures

market trying to factor in how many rate cuts that will be at any point in cycle let alone this one which has been changing almost every other fed meeting. I think this rally today is really just an understanding that Fridays was

an overreaction. Yes those revision numbers were pretty shocking to a lot of folks, but I think if you read between the lines, average hourly earnings, average hourly wages went up, and the number of hours in the workweek went up. It appears more that the employment markets are in balance, both supply and demand, versus these revisions because a recession is in the offing. So I think it's more of an understanding of that

and less so frankly about rate cuts. Cam, do you think Friday was an overreaction? I think to an extent. I mean, obviously this market is thinking that it can thread a very fine needle between jobs being just weak enough that it allows the Fed to cut, but not so weak that it causes us to cut GDP estimates or causes us to cut earnings estimates. Or put a capital S

on stagflation in a conversation about that. Exactly because we do know that we have two more CPI prints before the next Fed meeting and there's probably going to be a little bit of spiciness in there mostly in the goods line and Powell acknowledged that last week but the good news that inflation has is that you still have this deceleration in shelter which is the services inflation so on the surface you probably don't get this really hot inflation print but still spicy enough that the fed being backed into a corner would not have cut it had it not been for these revisions. Well how much of a tell is today's Russell, for example? So it's up 2%. To me, that screams cuts are coming.

That is the epitome of the needle threading, because the Russell 2000s needs lower rates to help the balance sheet, but it also needs resilient growth to help the income statement. 40% of the Russell 2000 is already unprofitable in this economy. So imagine if you were to see economic growth

slow down even further, the Russell 2000 would not be rallying. State the tried and true trade Chris mega caps after last week. I mean, if we learned anything last week, aside from the macro, it's that these companies just continue to produce their

earnings. They're spending like crazy. And the market for now believes that they're going to get a good enough return on that money. White Scott back a few months ago it was it was all about how much they're spending and will

they get an ROI that's acceptable on what they're spending now it's about well maybe that was not only incorrect but the return on that investment spending they're doing is substantially higher than what anybody

expected. What is still amazing to me is you're talking about three and four trillion dollar companies that can adjust their business models pretty flexibly and pretty quickly to be able to re-kickstart more earnings growth after we all thought initially that they were going to peak out in their earnings growth and here we are once again and they're re-accelerating. So yes, we stay with that. The mega tech and tech like industrial, utilities, and financials are right there too, and joining the leadership. All right.

Stay with the winners. Chris, thank you. Cameron, thanks to you as well. We'll see you soon. Up next, we track three big movers as we head into the close today. Closing Bell is coming right back. All right. Less than 15 from the Bell.

So let's send it to Christina now for a look at the stock she's watching. What do you see? We're starting with IDEX Laboratories. They hit a three-year high today as the animal diagnostics company continues riding the wave from the 2020s puppy boom. This is a veterinarian lab equipment maker and they posted an upbeat 2025 forecast this morning prompting JP Morgan to boost their price target to 675 from 550. You can see shares trading at

681 right now of 27%. In a somewhat unusual market catalyst, President Trump gave actor Sydney Sweetie a shout-out noting she's a registered Republican and that the American Eagle jeans from her recent ad are quote, flying off the shelves. While American Eagle hasn't confirmed any sales run from the ad, shares did jump on this endorsement about 24% higher. Figma shares though, moving in the opposite direction, giving back some of the gains the design software company posted after going public just last week. The pullback, which is about 26% lower right now, highlights how volatile newly public stocks can be as investors really reassess valuations

after the initial excitement wears off. So shares down for Figment down 26% Scott. All right, Christina parts of Nobles. We'll see you back in the market zone a little bit. Up next, what to watch for all the big names, 40 results and overtime today that and much more inside the upper mentioned market zone. We're in the closing bell market zone now. CNBC senior markets commentator Mike Santoli here to break down these crucial moments of the trading day.

Phil Laveau following some big news on long time Tesla bull and analysts. Let me tell you what that is. Christina Parts-Novello is tracking a major move in on semi as we get set up for another chip name reporting an OT and Brandon Gomez covering hims and hers results for us is a pretty nice move today Mike we're getting back Friday's losses and we've got a nice broad move to yes it absolutely is broad you know it's interesting because the market was sort of pulling back below the surface even before Friday so it was almost like most of the market had a head start on this to some degree. Now the S&P has not quite gotten back the losses. We're still sort of hovering below Thursday's closing levels.

But in general it feels like the market took what happened Friday and said okay before this we were going in with the premise of the economy is resilient enough to deal with a wait and see Fed. Maybe we don't get a rate cut. And now it's well I guess the economy is soft enough to get us a rate cut in September bring yields in the dollar rally has completely reversed at least partially in the last couple of days so wins us some room the VIX popped above 20 I think just the tactical dip buying mechanism was engaged for those reasons we'll see if it lasts if it was

just kind of a you know kind of a one-day index setback or not. We'll see if it lasts, if it was just kind of a one-day index setback or not. We'll come back to you in a moment. Phil LeBeau, if ever there's an analyst identified with a specific stock, you'd certainly say Adam Jonas is one. He is, and his role is shifting. We'll talk about that in a bit, Scott. This comes on a day when Elon Musk, the CEO of Tesla, was awarded a new pay package by the Tesla board.

96 million shares coming in at $26.8 billion. That's the total value right now. And he must stay through 2027. That's a requirement of this package. By the way, this package, it goes away. As you take a look at shares of Tesla, it goes away if the Delaware Supreme Court says the previous pay package can be reinstated. And then finally, let's talk about Adam Jonas, longtime analyst, and he's very bullish on Tesla, has been for some time.

His focus is shifting, according to Morgan Stanley. It will be more about AI and humanoid robots. Gee, what's in the future for Tesla? AI and humanoid robots. Gee, what's in the future for Tesla? AI and humanoid robots. Unclear what this means in terms of Tesla coverage from Adam Jonas. I'm sure he'll still be on a lot of those calls asking Elon questions. We shall see. Inquiring minds want to know.

Phil, thank you very much. That's Phil LeBeau. Christina's looking for OnSemi today and Lattice afterwards. What's happening? Well, OnSemi really just emerged as the worst chip performer, the worst S&P 500 name today, plunging over 16% despite management really calling bottom across all markets. They're even saying there's going to be modest growth projected for September, but that just wasn't enough for investors that are seeking a bigger earnings beat or a stronger guidance. And plus OnSemi is really heavily exposed to auto,

and so that it creates headwinds given ongoing tariff pressures. After the bell, to your point Scott, we're gonna be watching Lattice Semiconductor, which makes programmable chips for industrial and communication applications. KeyBank expects slightly better results with inline guidance driven by strong data center demand, tariff related PC inventory builds, and cyclical recoveries in industrials. Meanwhile, there's a few other

names AI infrastructure suppliers are continuing to rally post earnings. You've got Arista Networks up, Broadcom up, reacting positively following Meta and Microsoft's substantial capex spending commitments that we saw last week. So Scott, the semiconductor space really just remains bifurcated, AI winners versus everything else with little tolerance for disappointment in the latter category. All right, Christina, thank you.

That's Christina Partzanevalos. Brandon, talk to us about Hims and Hers. Hey Scott, yeah, Hims and Hers reporting after the bell. The street expecting earnings of 15 cents a share on revenue just over 550 million. Now that would be a massive 75% jump from a year ago. The company has been on a hot streak, riding the wave of demand for its compounded

weight loss drugs and stacking up a growing consumer base. Even pharma giant Novo Nordisk felt the bite, reporting slower US sales of Ozempic and Wigovie, partly on the rise of compounded alternatives like those HIMS offers. Investors will focus now on subscriber retention and forward guidance, factoring in global ambitions in Europe and Canada.

Remember, HIMS plans to offer a generic version of Novo's weight loss drug in 2026 after a legal loophole and missed fee payment by Novo left exclusivity wide open. I'll be speaking exclusively with the CFO after the bell, but a quick dose of reality for you, Scott. This stock swings sharply on earnings. More than half the time, it's been to the downside.

So we'll see what it does today. All right, Brandon, thanks so much for that. That's Brandon Gomez back to Mike Santoli. Thought that Gunlock was interesting as usual. Doesn't like the long end. I thought it really interesting too, the way he suggested that things that normally trade in certain ways aren't really acting how they normally do, which maybe changes

the calculus on how things are going to go moving forward. The dollar, the long end, and things like that. Yeah, I mean there's been a little bit of slack in those relationships for a while. I mean you can dial it back to, you know, if you want to knit it to post-pandemic changes, but you know the yield curve didn't really cooperate in terms of foretelling an outright recession. Maybe the AI boom rescued us from that. And then the gold Bitcoin interplay, it's just not that clean all the time. So I understand the idea of not maybe leaning on the same trading cues. I do think the AI dominance of the equity market cap is a significant factor that we're having to deal with. In other words, you're not seeing economic macro concerns

always filter into the equity indexes the way you might have expected at some point. So yeah, it's a noisier environment. In terms of the long end, I mean, I'm not sure how much more you wanna see it rally. Right, I mean, it's one of those things where, yeah, it's good to have yields come off the boil, but the lows after Liberation Day were like 4% on the 10-year.

420 has been kind of the lower end of the range. Beyond that, we're sort of there. So I do think it's still worth watching it as a signal for embedded market expectations. Right now, rate-sensitive stuff's moving. Home builders have finally continued their recovery a little bit on this move. Even consumer cyclicals have been doing fine, even if it's mostly today an AI and mega-cap tech trade. Well, the more the long-end yields go up, the more you have the conversation about this

deficit that continues to escalate and that we have to fund. It's interesting because you definitely do and if yields go up that is going to be the conversation again. Whether it's exactly possible to precision pinpoint that that's what's going on, that it's really about demand for all this debt that we're selling or now everyone's comforted by the tariff revenue as if somehow that sort of takes the pressure off on the financing needs. I think it's much more if we have a real recession scare, those yields are going down. I don't care what the deficit is. So that to me is the more near-term signal that I would be focused on. I think

the market is basically saying yeah we got a soft patch in the economy it's not getting to the point where we're really pricing anything close to recession. No, and maybe we think that the feds are going to air on that side of the mandate first and cut rates. And we're trying to get ourselves ahead of that. We're green across the board, decidedly so. I'll send you to the overtime as Morgan has done.