Closing Bell - Closing Bell: The Risk-Reward Setup for Stocks 6/11/25

Episode Date: June 11, 2025

After a ripping rebound rally based on a resilient economy and trade war de-escalation, how does the risk-reward setup for stocks look from here? And what will drive the next notable move? We discuss with Solus’ Dan Greenhaus, Hightower’s Stephanie Link and JP Morgan Asset Management’s Stephanie Aliaga. Plus, former Fed governor Mishkin tells us what today’s CPI number might mean for the Fed’s next move. And, BTIG’s Jonathan Krinsky breaks down the charts and tells us where he sees the energy sector headed from here. 

All right, thank you guys. Welcome to Closing Bell. I'm Mike Santoli in for Scott Wapner today. This make or break hour begins with a subdued market response to a tame inflation report. As treasury yields ease back but stock indexes largely shrug, refusing to assume for now that the CPI will remain free of tariff influence indefinitely. Here's your scorecard with 60 minutes left in regulation. It was a modest early rally in the S&P 500 about a third of a

percent higher. That has retraced as mixed messages on the state of the US China trade truce are absorbed by a market that has been on a powerful run of course up some 25% in two months. You see the S&P down about one-third of one percent at the moment. The Nasdaq is lagging just a bit on the day while the small cap Russell 2000 has been an outperformer. It's all very small margins here but that's a second day effect of yesterday. There was a rotation really evident yesterday out of momentum mega cap leaders into lagging pockets of the market that would include small cap and some value stocks. The bond market did catch a bid, the two-year treasury yield slipping back below 4% as the

notably cool 0.1% monthly rise in CPI perhaps opens the window for future Fed rate cuts a bit wider than we had previously thought, which takes us to our talk of the tape. After a ripping rebound rally based on a resilient economy and a trade war de-escalation, how does the risk rewards set up for stocks look from here and what will drive the next notable move? Here to get into all that are Dan Greenhouse from Soldus Alternative Asset Management, CMBC contributor Stephanie Link of High Tower Advisors, and Stephanie Aliaga, JP Morgan Asset Management Global Market Strategist. Welcome, great to have you all here. Dan, I'll just start with you.

I mean, obviously can't make too much of a fuss over a flattish market, but I do think a lot of the handicappers were saying, look, if we get a really cool CPI, that's an accelerant to the upside here. We have been up three days in a row, two weeks in a row. We're up 25% in two months, as I said, but how do you think the market's digesting all this?

I think what you just laid out there is exactly right. It was a pretty good inflation report, I don't think there's any other way to argue for it. At the same time, with respect to your points about the market being up considerably over the last couple of weeks and months, a lot of this was probably in the price, because there were a lot of people out there saying,

this report's probably too soon to see the full effects of the tariffs. Remember, companies there were a lot of people out there saying, you know, this report's probably too soon to see the full effects of the tariffs. Remember, companies pulled forward a lot of inventory ordering, and so they're going to work down those first. At least initially, maybe they're going to eat some of these tariffs to see how long they last. So I think you really, and this is a point I've been making on air for some time now, you really need to get later into the summer, even the end of the summer, before whatever

effects you are going to see will be seen in the report. I think with respect to the markets being flat today, that probably explains all of that together, some of what we're seeing. Stephanie Link, we got some of the kind of after the fact explanations of why you did undershoot on CPI and maybe what it could mean in terms of yes,

maybe obviously we had to pull forward in January and February of some demand and pricing. It kind of gave way the next couple of months. The other piece of it is maybe demand is just not there where you can necessarily take price if you're a business. And then I guess there's the idea that the market is just going to be in suspense for longer and it's just going to assume it's going to show up down the road and not going to give credit just right away. So how would you think about those things? We're up 23 percent from the April lows.

So a lot of good news is priced in. That being said, we're checking off the boxes one by one inflation. OK, I look at the headline just as comparing it to the 9 percent CPI number we saw two years ago. It's now a 2.1%. I look at the Atlanta Fed tracker, I'm not looking at 3.8% and thinking that that's a legit number, but average the first quarter and the second quarter. And you're running at like 2%.

And the consumption is actually holding in. So the consumer is holding in, you have business equipment investments more than holding in. Yes, maybe that was a little bit of a pull forward, but still up 22% is very robust. And then to the extent we get any clarity on the tariffs, which we are getting, that all of these things set up for a higher market because all of it means better earnings. We're just not in earnings season right now. So we're now hostage to kind of the macro and after a really big run.

So I think you want to look for opportunities to be buying and to be buying some of the laggers like you mentioned. Yeah, that's that's an interesting question, whether you just sort of stick with their established leadership or just rotate away from that. We'll definitely get into that. Stephanie, though, I wonder about the market craving and needing resolution on some of these issues as opposed to remaining in suspense. I say that because Treasury Secretary Besant in his testimony today

said well if there's good faith negotiations going on with certain countries about trade deals we'll just roll forward that deadline. So maybe we're not going to get that July 8th resolution. Similarly with China they've kind of given a six month reprieve for Rare Earths. Without getting into the details I wonder if the if the market can handle just remaining in this unknown in-between space. Yeah, I think first what's key is that apart from these trade deals,

we've still seen a significant increase in overall tariff levels. The average effective tariff right now, 14-ish percent. We may not be seeing those tariffs impact inflation just yet, but many businesses last month were also in wait and see, similar to how markets have been around whether these tariffs remain in place. Now, we do think when all is said and done, tariffs, they might even move higher before

they move lower as a result of all of these trade deals. And with that, it is very likely that we're going to see those inflationary pressures percolate through the economy. We may not be seeing in the hard data just yet, but there is a mountain of survey data that the Fed is looking at, that markets are looking at, that suggest more is to come here. And does that tell you it's time to play defense or it's time to kind of retreat from risk a little bit or no?

What's most key right now for companies is who has pricing power. What are the consumers that they are selling against? What is the resiliency that they have in supply chains? So for investors looking at their portfolios, it likely means leaning a bit more to value. Most portfolios are heavily overweight growth and then perhaps just eyeing some of those opportunities

and more defensive names in the market that seem better positioned to weather this. Dan, you know, if you do go down the checklist of things you'd want to see and maybe what the premise of this recent rally has been, right? It's that the economy is going to hang in there long enough to get some kind of resolution. Inflation not getting worse. Maybe the Fed's next move is lower whenever that's going to be. And maybe we can deal with a wait and see Fed if the economy hangs in there.

And then I guess you have the rest of the world equity markets ripping. That usually doesn't mean that the economy globally is going to suffer. Is there a way to poke holes in those things or do you say just take, have faith in all that and stay involved? We can always poke holes in that. That's the fun of what we do for a living here. But I also think use the phrase that I'm going to take issue with, and that's that the market's hanging in there.

Yeah. Or the economy is hanging in there. The economy is hanging in there. By extension, the market presumably would be doing the same thing. Something Steph and I have been talking about in particular on air for two years now is the consumer looks pretty good. And I've got data from Walmart and Costco and American Express and Visa and MasterCard etc etc etc that tell me quarter after quarter after quarter everything's fine with the consumer you got a mid-quarter update

today from Comerica and M&T Bank that didn't say anything was falling off the cliff granted two smaller regional-ish banks but pretty large I just the economy is doing fine the consumers doing is doing fine. It's been that way for some time now. The other, Steph, just brought up the over waiting of tech, if you will. But look at the charts of booking in Royal Caribbean, two consumer focused names, the banks, JP Morgan, Wells Fargo, Bank America, Capital Goods, like Deere, and a whole bunch of other names that we've mentioned on here on air here in numerous times Are either at 52 week highs or very near 52 week highs. So this isn't a particularly

Specific rally that's going on here being driven by tech or even the mag-7 or I should say mag-7 or even tech There's a lot of spaces including industrials some portions of financials I mentioned that are doing very well that speak to the strength of the economy that isn't just hanging in here. I know that's not what you meant. Sure. No, I kind of didn't mean that in a way in a sense that, Steph, if the market is already reflecting all that, I guess we're priced for good things. In certain sectors in technology, for sure we are.

But look at financials, as you just mentioned. I mean, they all had good things to say at the Morgan Stanley conference and those stocks are trading at anywhere from 10 to 12 to 13 times earnings and just wait until we get the regulation behind us on excess capital you're gonna see buybacks and that's gonna be a creative and most of the companies at the conference this week talked about the M&A is still really strong, the pipeline is still really good, that net interest income troughed last quarter, and that's a big part of earnings

that we haven't seen just yet. And oh, by the way, to your consumer point, Dan, Bank of America's talked about May being up 5% in the consumer. So you have financials doing very well, industrials, secular growth trends there with regards to AI and electrification, power grid and all that.

That's in early innings. I'm not saying you don't want to be in tech, but I think you want to just be a little bit more careful in tech because I think some of these other sectors are not priced to perfection. And to that point, I'm sorry, Guggenheim today just upgraded GE Vernova, GEV,

and the stock's like, their price target was 350. Yeah, they put a $600 price target on it to the point about electrification and the themes that are helping drive the market. I mean, that was a stock that was, again, like on the absolute edge of the momentum trade or thematic trade, it backed off two days and somebody says, this is my chance to jump in it.

The specifics of the upgrade aside, there are these themes, and again, the two of us have been talking about this, that are not just Mag-7, social media, et cetera, et cetera. I'll point out, Comerica's down 1.6% because they were sort of soft on deposit trends, but we'll get back to that. Meanwhile, everyone stick with me,

Voyager making its Wall Street debut. Leslie Picker is here with more on that name, Leslie. Hey Mike, yeah it's an out of this world debut for Voyager Technologies today. Shares of the space station developer up about 80% after raising more than 380 million in an IPO. That price, there you go, now up 91%. It's been quite volatile today. It did price above the market range at an implied valuation of nearly $4 billion. Janice Henderson and Wellington indicated interest in purchasing about $60 million of the offering at the IPO price, the company's filing said. And Voyager more than doubled when it first opened before a bit of gravity took hold.

The six-year-old company received a developmental grant with NASA to design Starlab, which is expected to replace the International Space Station. Additionally, Voyager contracts on other space projects, as well as defense and national security. Altogether, it's just more evidence that the IPO freeze is thawing particularly for companies that are perceived to thrive under the Trump administration. Stablecoin issuer Circle's shares have nearly quadrupled since it went public earlier this month and Neobank Chime slated to price tonight and it will make its debut most likely tomorrow.

You can see Circle shares up 10% today as well. Just keep on climbing higher there, Mike. Yeah, and I know you keep an eye on ChimeForce, Leslie. Thank you very much. In fact, I was watching here watching here guys Voyager opened up it was less than a week ago that Circle opened up they both priced at $31 they both both opened at $69 and changed now Voyager's backed off a little bit so it's that easy again I mean you just have to have something that's in one of

the hot themes and and you can just you know guarantee a double on the first day. Nothing says healthy market like a stock pricing at 31. M&A is up 20% year to date and IPOs are up 10% year to date. So it is definitely getting more popular and more exciting, but we have a ways to go. And like, you just have to hear these CEOs talk this week. They're so excited about what they have in the pipeline

and we haven't realized it yet. So I think there's really a lot of opportunity on that theme. Stephanie, it sounds like you wouldn't necessarily feel as if you want to just grab for the next hot thing, but how does this filter into how investors are feeling about the market? Because they actually did, as a group, retail investors buy that dip back in April, and how that sets us up going ahead. There was this collective sigh of relief after we've seen the de-escalation in trade tensions and there is a lot of optimism.

There's a lot of good things potentially in the pipeline. We just need the policy front to behave and I think that is still a big unknown, which maybe isn't really properly compensated for in the price when you're investing in the markets right now. So I think for us it's not about chasing momentum, but really leaning into Selectivity building resilience and portfolio Diversification is really important not just to be to safeguard investments But also to lean into some other lesser loved areas of the markets that now have new tailwinds behind that whether that's looking global

on the equity front even on the debt front, also alternatives. And thinking more selectively about that tech exposure as well, because we agree a lot in terms of having conviction around the AI theme. But I think for us, it's really about eyeing what are the broader beneficiaries of this, particularly as AI adoption is rapidly ramping up. I mentioned a couple of times just in the last couple of days, just a little bit of these vibrations in the market. in particular Goldman Sachs is trading desk flagging. Okay there looks like another one of these momentum unwinds perhaps not as violent as

we saw in February and March but this the idea that heavily shorted stocks are ripping and if you get better economic data it would actually accelerate that because the idea would be you'd rotate into more cyclical, more value, more laggard type groups. You know, energy is an example right now of something that's moving. It's both laggard, it's cyclical. Plus we talked about maybe some geopolitical reasons for crude to go higher. Listen, since the bottom, short tech outperform the market, short healthcare outperform the market, the basket in general,

as you mentioned, outperform the market. I mean, clearly, this has been at least in part a short covering rally, but again, built on the ideas that we're talking about, that the earnings data was better than expected, that the tariff data was not getting worse, it was getting better, and if there's one thing that matters in markets, it's not good or bad, it's better or worse, and on that front, things are getting better. Yeah, it might exacerbate those short-term trends, but listen, if the economy does fine and there's a rotation out of some of those momentum names into the rest of the

market like energy that's fine I like energy Solis has been exposed to energy to varying degrees over the last couple of years I don't have the oil price up on the yeah on the screen now but should be for almost 5% for I'll take it the problem is it's only 3% of the waiting yeah I don't benchmark to the S&P in that sense, but yes. But I do, and I don't have to pay attention to it. And I do own a few energy stocks, because they're super cheap.

But lower prices, lower production. That's what's going on here. Yeah, exactly. Yeah, you've got to supply response. But also remember, a lot of these names are huge cash flow machines. Oh, for sure. Targeting 50% returns, actually doing 90% cash flow.

For sure. Please go. I look at it much more about like, you know, this all might be true and an orderly rotation makes all the sense in the world. If it looks forced and stressed, that's what happened February, March. That was before we even heard about tariffs

and you were, you know, kind of in free fall for a little while. Not there yet. Let's get over to Christina Parts-Nevelis for a look at another one of these buzzy moves, a big move in the quantum computing names Christina like this is really less about quantum computing and more about Jensen Wong's market power at Paris's Viva Tech conference this morning Nvidia CEO declared quantum is reaching quote an

inflection point and we're quote within reach of practical applications in coming years quantum stocks immediately surge quantum computing you can see just on your screen, some of these names are Getty up 12%, quantum computing up almost 30%, INQ climbed, then fell. D-Wave, I have to point out, is a little bit lower after announcing the option to sell $400 million worth of shares, dilution, so that's a separate story.

But today's comments mark a dramatically reversal from January when Jensen Wong suggested useful quantum computing would be roughly 15 to 20 years away, sending these same stocks into freefall. By March, he was in damage control mode, announcing a Boston Quantum Research Center and hosting a panel with quantum computing CEOs at GTC. The whipsaw effect highlights how a single CEO's words can really move billions in the speculative sector.

These companies traded hundreds of times sales while burning cash, leaving investors at the mercy of whatever tech titans say next. Mike? Absolutely, yeah. Very tightly wound group, as you mentioned, very speculative, Christina. We will monitor it at least as a risk appetite. Tell a couple of those names mentioned there, Quantum Computing, QUBT, traded 123 million shares today.

It's 140 million shares outstanding. Brigetti, 165, 292 million shares outstanding. So there could be some real actual trend and some business purpose to all this and yet an imperfect way to play. You can buy IBM. Yeah. See here's-

For 25 times earnings instead of 100 times earnings. And sitting at a 52 week high? I know, well. Cisco? Yeah. It's interesting because this goes back to one of the points I've been hammering on, which is if you look at all the themes

that has people excited and willing, markets willing to put hundreds of billions of dollars in value on RoboTaxi within Tesla, and Uber arguably, you look and Uber arguably you look at quantum you look at Netflix guess what has all that inside it alphabet okay it's YouTube it has Waymo and honestly if quantum works Google's gonna figure it out first probably and yet nobody wants to stock stuff regulation too much to lose I think they have the best business in history at the core.

I also think it's really over owned, just like all of Mag 7. Really over owned. There's other ways to play these themes. You mentioned Uber. I actually bought Uber last week for the first time. Uber's about to, am I wrong? They're about to roll out their AV in Houston and Atlanta. Yeah.

I mean they're all starting to. There's a lot of competition, but the total addressable market, it's enormous. It's absolutely enormous. And the stock is still down 7% from its highs. Yeah. And by the way, also one of the big reasons that the industrial sector is up a lot is Uber is in it.

Yes. It's one of the largest names in the sector. Yeah, exactly. So it's not just smokestacks and metal bending in there. It's trained technologies. It's the AV derivative trade that the other stuff was working. You're not the other stuff, you're just further away. So you're the other stuff.

Stephanie Aliag, in terms of you talking about kind of maybe stress testing your portfolio, just thinking about ways you might be able to build resilience in there, where does things like fixed income and global work into it? Yeah, we do think fixed income is a really important allocation for investors to provide that ballast, but you just need to be really mindful of that duration risk. I mean, even if the Fed lowers interest rates this year and we think maybe they do one cut,

you're not really going to see that relief on the long end and the risks that are really pushing long yields higher are going to remain to be in place, particularly given all of the debate right now on the reconciliation bill, which will likely turn out to be more expensive than the one that's passed the House. So those risks still in play. With that in mind, we do still think fixed income is an important diversifier, but it's not just 60-40. So looking outside of that, leaning into alternatives, maybe some asset classes that can also provide

geopolitical diversification, inflation protection, and then of course, in your equities allocation, thinking about your concentration risk, and staying exposed to some of those emerging opportunities when it comes to the actual companies using and integrating AI as a lever in their operations. Yeah, I imagine that next couple of earnings seasons, maybe that's gonna be a lot more scrutiny of that issue. Thanks everybody. Dan, Steph, Steph, appreciate the conversation.

Let's send it over to Pippa Stevens now for a look at the biggest names moving into the close. Hi Pippa. Hey Mick, let's start here with oil because it is jumping more than 4% as the US reportedly prepares to partially evacuate its Iraq, sorry I should say Iraq embassy that's according to Reuters amid escalating security risks. Also the US Iran nuclear talks also facing some hurdles, sending oil prices surging. Moving over to Starbucks, it is leading the S&P

after CEO Brian Nicol told the Financial Times, the company has received quote, a lot of interest in its China operations. After last year saying it was exploring strategic partnerships in China, separately RBC hiking its target to $100, pointing to increased confidence in the company's turnaround strategy, translating to top line upside.

And Chui is dropping double digits after earnings came in light of expectations, with muted guidance also weighing. The company's CEO telling CNBC that for the time being, Chui is, quote, well insulated from the tariff impact. The stock though tracking for its worst day in nearly two years. Mike. Pippa, thank you.

We are just getting started here. Up next, former Fed Governor Frederick Mishkin standing by with what today's CPI number might mean for the Fed. He joins me after this break. We are live from the New York Stock Exchange. You're watching Closing Bell on CNBC. The New York Stock Exchange

The New York Stock Exchange The New York Stock Exchange The New York Stock Exchange Stock's falling despite a softer than expected May CPI print and a preliminary trade agreement between the US and China. My next guest says today's data should be taken with a grain of salt with so much uncertainty around tariffs.

Joining me now is Frederick Mishkin, former Federal Reserve Board governor. He is also a CNBC contributor and it's great to have you here Rick. So why take it with a grain of salt? Just because it's lagging data and CPI and we don't know exactly how much it's gonna carry forward or for other reasons. Well, always you don't wanna pay too much is going to carry forward or for other reasons.

Well always you don't want to pay too much attention to one number but part of the big issue here is what the tariffs are going to do to prices and we just don't know how long the lags are going to be. So think about the situation for a firm that's importing goods. They may have a lot of inventories that in fact were not subject to the tariffs and in fact it's only the stuff that's going to come to them in the future that's the problem. So they're not going to necessarily raise prices because they want to keep their customers. But on the other hand, once they have to pay that tax, that big tariff tax, then they're

going to have to raise prices or they can't survive. So the numbers are quite good. It doesn't look like the tariffs have had as big an impact on the prices yet, but they certainly might in the near future. So I would take this with a grain of salt. The fact that there are good numbers, in fact, the tariffs were not on the, we didn't expect to have these tariffs going forward. That would be a very different environment where the Fed would actually see these as

very good numbers and would want to act on them. But on the other hand, it's just too soon to know whether in fact inflation is going to be as tame as we would like. You know, the Fed Chair Powell in his recent comments, and I expect next week again he'll reiterate that, you know, the Fed sees that risks are somewhat balanced, or at least there are risks on both sides of its mandate when it comes to inflation as well as employment. But he also says, you know,

I guess depending on which looks like more vulnerable or more risky, that's what you would look to try and offset. Do you think this moves that equation at all? I don't think it moves it a whole lot. I think there were a lot of reasons for the Fed to stick where it is. One of the big concerns that the Fed has is that they screwed up on inflation in terms of having a big inflation surge. There's a huge issue about the independence of the Fed.

And in fact, we're going to have a new chairman at some point in the near future, basically in less than a year. And we don't have any idea what kind of person that could be. Trump could put into place somebody who is just a super-dub and will do whatever Trump wants or he could put in somebody who's more trusted by the markets. We just don't know. The Fed doesn't want to go into that situation with a lack of credibility about controlling inflation. And particularly because of the mistakes they've made in the past. So I think that they don't want to ease rates quickly for that reason unless it's absolutely

necessary. If they see a tremendous weakening in the economy, which we don't see, that if anything the inflation numbers are probably not going to look good in the near future. All of those things point to the Fed not wanting to ease. And certainly I don't see, that if anything, the inflation numbers are probably not gonna look good in the near future. All of those things point to the Fed not wanting to ease. And certainly, I don't think there's any reason for them to tighten right now. Monetary policy is somewhat restrictive. There's no good reason to try to piss off Trump by raising rates when it's not clear that it's necessary. So I think there are a lot of reasons for the Fed to have a lot of inertia right now

and to just wait and see the data as data comes in. I think unless something really strong starts happening, I think the Fed is going to stand pat. Yeah. And it's also obviously happening at a time when there's many unknowns about exactly where tariff policy settles. We could get a, you know, a never mind, right? I mean, let's just say tariffs go away, and then we get this tax bill that the administration

is saying is going to accelerate growth, and at least on paper we might be in a very different spot. Yeah. I mean, I think that the idea that this bill is going to accelerate growth a lot, I think, is hopeful thinking. But there really is tremendous uncertainty about what's gonna happen in terms of tariffs. And there's also tremendous uncertainty in what's gonna happen to the world economy.

Or the administration's policies have been ones which have created tremendous uncertainty. That could really cause people to not spend, businesses to hold back on investing. And actually, it's not the US that's just gonna have this problem. It couldn't be even worse for foreign countries. So in this kind of context,

it's really not clear that what's gonna happen. There's just a lot of uncertainty. And it's very hard for economists to figure this out because so much of this uncertainty is politics. Every day we get something new on the tariffs and we don't know which way to go on this. So it's just a very tough forecasting environment and it's a tough forecasting environment for the Federal Reserve. Yeah, yeah obviously it's a difficult environment

for markets to attempt to price in real time as well. Professor Michigan, thanks very much appreciate the time today. You're very welcome. Up next top technician Jonathan Krinsky is charting the move in energy. He'll tell us where he sees that sector heading from here. Closing bell, be right back. Crude oil surging to a seven week high today on Iran, tensions and a provisional trade deal between the US and China. And energy stocks have made a comeback so far in June as well,

heading for their best monthly gain since November. BTIG's top technician, Jonathan Krinsky, sees a bigger breakout forming in the group. He joins me now to make the case. Jonathan, great to have you on. So what do you see brewing here in Energy coming out of a pretty deep trough? Hey, Mike.

So yeah, Energy is actually the second worst performing sector over the last three months but it's the best performing sector over the last five days. And if we look back over the last couple months there's a pretty sizable gap down that happened starting on Liberation Day in early April. We know that most of the indices and most sectors have gone back and filled and exceeded that Liberation Day gap, but energy is still about 8% or 9% below that gap. So, I think that's the logical upside target. We put out this no-yesterday to clients suggesting there was room for upside in the energy sector,

and then obviously today we have the Mideast escalation headline. So we're not obviously rooting for that, but that's certainly a tailwind. But I think the setup is there regardless of any headlines because you have this bit of a factor online you've been mentioning before where some of the leaders are probably looking to pause here and some of the lagging groups like Energy are certainly getting a bid whether it's short covering or whether it's some catch up trade. So I think you have that set up and we'd be looking for a continuation of this move higher

in the coming weeks. Yeah, I'm glad you mentioned that, that there is this broader move happening here where it's going from large to small, from growth to value, from the popular and crowded to the neglected and oversold. Do you think that this can continue on in a relatively orderly way?

I mean, obviously we remember what happened in February when things started to snowball and it did create a little more portfolio stress. Yeah, I think that, you know, if we think about the high momentum names, they've kind of, you know, as a group, retraced back to the highs we saw in February. So we should expect some sort of reaction, whether that's a price pullback or just a

pause consolidation, that's to be determined. But I think near-term upside is probably a bit limited there. And then conversely, the low momentum names we're starting to see emerge. Now, some of those are actually also starting to get a bit extended, but typically you do get a bit more of a squeeze or unwind when you have these momentum trades. And that's the question, right? We never know how the high momentum names are going to react. Sometimes you do just get that sideways kind of churn.

I think that's probably the more likely scenario, but as we get towards the back half of June, that's when the seasonals do turn a little bit more negative and you could see some month end selling in some of those winners as we head into the end of the month and the quarter. Yeah, I guess that brings up this idea that fine, we can just sort of rotate around and have the sort of overheated parts of the market cool off while some of the stuff that has been kind of left behind do some catch up. That all sounds great, but maybe that operates

at a net negative for the S&P 500. I mean, how do you see that playing out, as you mentioned, getting into a tougher seasonal period? Yeah, I mean, you're, you know, you're kind of pushing into those prior outside highs for the S&P. You can probably grind up a little bit higher. You know, we don't see a ton of upside,

you know, probably beyond the 6100 level. With that said, there's good support now around 5800. We've been saying as long as 5800 holds, bulls hold the upper hand. So I think unless there's some exogenous event, if this mid-east escalation continues, something like that, I think the most likely scenario is a modest mild pullback into that 5,800 level. I think to get below that,

you're gonna need to see some of those mega cab names see some more sizable selling pressure, which we just haven't seen evidence of that yet. But again, I think that the back, the last five to 10 days of June could be that window where you see a little bit more of that. And then just by extension, small caps, you've been flagging that maybe that they're in for bit more of that. And then just by extension, you know, small caps, you've been flagging that maybe that they're in

for some more extended relief. How do you feel like that'll play out? Yeah, so small caps, you know, as a group are still, you know, I think about 15% below their highs from last fall, mid last fall. And, you know, the trend is still, I would say it's still neutral to negative on small caps. They just today in fact are trying to toy with their 200-day moving average, which is

still declining. So they still have some work to do, but if you look under the hood, only about 38% of small caps are above their 200-day. And typically once, you could look at that as a negative, but you could also say there's room for breath expansion and you know over the last couple weeks if it's hard as anything it's that breath you know has been expanding it probably has room to expand further you know especially as some of these laggard groups you know continue to work higher. So our thinking is you get a little bit more upside through the summer in small caps you

know again the big question mark is is that at the expense of mega caps or is it just kind of a pause for mega caps and then everything can move higher together? So that's the question, but yeah, we just see more upside for small caps here. I just wonder also if you have a thought on financials broadly because they have kind of, you know, held in pretty well.

Parts of financials have, you know, been leadership for a while, but maybe a little bit of a wobbling in some sub-sectors. I know people look at that as confirmation or refutation of an underlying trend, but how do they set up for you? Yeah, I mean, financials are really a similar setup to the large versus small caps, right?

The large cap financials have been leadership. Could they pause a bit here? Certainly, it's the small caps, right? The large cap financials have been leadership. Could they pause a bit here? Certainly. It's the small caps, the regional banks, which are a big, one of the biggest components within the Russell 2000, those are the laggards. And we're starting to see some signs of those perking up as well.

Even some of the FinTech plays, some of the more high beta FinTech plays have been acting better. So there's definitely pockets of financials that I think can certainly work. And again, maybe that's a little bit of rotation down the cap scale, as you mentioned, like we're seeing in other parts of the market.

Yeah, I mean, just grabbing the first one I thought of, SoFi, up 4% today, up 13% month to date. So there's your smaller fintech play. Jonathan, great to catch up with you. Thanks a lot. Thanks, Mike. All right, up next, we are tracking the biggest movers as we head into the close PIPA,

standing by with those, PIPA. Hey, Michael, one defense name is under pressure as the Pentagon reportedly pulls back on spending. You've got the name to watch coming up next. 16 minutes till the closing bell S&P 500 down about four tenths of a percent. Let's get back to Pippa for a look at the key stocks to watch. Steel stocks are under pressure here following reports that the US and Mexico are closing in on a deal to remove the administration's 50% tariffs on steel imports up to a certain volume.

Cleveland Cliffs, Newcore and Steel Dynamics are all lower. And Lockheed Martin is sliding after the Pentagon reportedly cut its requests for new F-35 fighter jets in half. That's according to Reuters, which said the order has been decreased from 48 to 24 planes. Those shares are down nearly 4%.

Mike? All right, Pippa, thank you. Still ahead, Wells Fargo's Scott Wren standing by to break down the critical final moments of the trading day. Closing bell, we'll be right back. We are now in the closing bell market zone. Oaklow heading for its best day of the year. Pepe Stevens has more on that.

Plus, Christina Partzanevelis looks ahead to Oracle, reporting after the bell. And Wells Fargo Investment Institute, Scott Ran on what he makes of today's market moves. Pippa, we begin with you in a pretty dramatic move here. That's right, Mike. So Oklo is at more than 30% after saying it's been selected to provide nuclear power

to an Air Force base in Alaska. Now the company will design, construct, own and operate that power plant. And it's a natural fit for Oklo since its Aurora reactor can be deployed in remote locations. The agreement is contingent on Oklo reaching certain milestones, including getting regulatory approval for its reactor. The NRC previously denied the company's license, but they are in talks once again. The stock has doubled in the last month license, but they are in talks once again. The stock has doubled in the last month and tripled so far this year. And sticking with nuclear, shares of Talon jumping after restructuring and upsizing its

agreement with Amazon, saying it will sell 1.9 gigawatts of power from its Susquehanna nuclear plant to the tech giant under a long-term agreement through 2042. Jefferies reiterating its buy rating, pointing to the contracts, premium price, those shares up 7 percent. Mike? All right. Pippa, thank you very much. Christina, Oracle, a little bit of suspense, one of the last reporters in tech.

Yeah, that's why we're calling it We City, is calling it a relatively important quarter for the cloud giant. This is according to a Citi note. The stock is up what, over 17% just in the last month. So expectations are relatively high. The question is, can Oracle finally convert that massive $130 billion backlog of signed contracts into actual revenue? They've been promising double-digit growth acceleration for months, and investors are starting to get a little impatient. Microsoft and CoreWebEarning showed

that AI data center capacity constraints are easing, which could be a boon for this company. Last quarter, this backlog called remaining performance obligations, RPO, jumped $33 billion. This time, expectations range from about 10 to 35 billion. The wild card, any piece of the massive StarGate AI infrastructure project,

which could dramatically boost these numbers. Management also needs to reaffirm their revenue target for fiscal 2026. So the bottom line, Oracle rarely misses in Q4, but with the stock this extended and sentiment really quite bullish, there's not much room for error. Any disappointment could trigger a sharp sell-off,

while a solid beat keeps this AI momentum going. All right, we will know which one it is soon enough. Christina, thank you very much. We have some big moves out of Papa John's. Kate Rogers has more on this one. Hello, Kate. Hey there, Mike. Yeah, and that stock is up by more than 7% right now.

So Semaphore is reporting that there is a bid to potentially take Papa John's private, that Apollo and Qatari Investment Fund have made a bid for Papa John's that values it at around two billion dollars. This is according to people familiar with the matter in this report here. Apollo and Earth Capital are the two groups and the consortium made a bid in the low 60s the report said here. The capital group brings a 5% stake in Papa John's and some expertise the reporting says in buying consumer brands

that are in need of a turnaround, one of its co-founders, for example, bought the mattress maker Casper, the report says in 2021, and Bojangles, the fried chicken chain in 2017. But the smaller fund, the report says here, still needs to sort out its financing. And it's possible that Apollo could go at this alone.

So once again, Papa John's stock up at nearly 7% now on these headlines that there is a potential bid to take it private. Mike, back over to you. Yeah, on some pretty heavy volume too, Kate. Thank you very much. Scott Wren, what do you make of today's market action, the way that we have taken in what happened with CPI after this nice rally? Well, Mike, I tell you, I think that,

I think, you know, certainly the CPI number was good. It was better than expected. I don't think the market has a lot of faith that we're not going to see at least a little bit higher inflation. We certainly think we will. So I think after the big bounce that we've had, you know, we're above the 200-day moving average.

We crossed through some other prior resistance. And so we've had a good run here. It makes sense to me that we'd be a little choppy up here because, you know, let's face it, I mean, stocks aren't cheap and if you're a technician, really the next level up here is the record high. And so with all the things going on, the economy slowing, earnings growth likely to slow,

lots of trade negotiations to still work through. You know, is there really a good reason to take a run at the record high? I don't know about that. It makes a lot of sense to me that we'd be choppy and maybe see a little downside here. Yeah, of course, that record high in the S&P 500 is up about 2% from here, getting a little bit close,

not to maybe make a try for it at some point, although I guess you still feel as if we might have a little bit of a stack inflationary impulse, in other words, a little bit of a growth slow down, and then you have some stickiness and inflation from here. And I guess, what does that tell you to do as an investor? Well, you know, right now, Mike, what we're doing, you know, our really midpoint of our target range

for a year in this year is 6,000. So I mean, we're there, we're a little bit ahead of that. So I think, you know, we cater to retail investors. They tend to be dollar cost averages. I mean, if they're dollar cost averages, that's fine. You can probably still do it. But what we really want them to do, and we had the opportunity when the S&P was down

10 plus percent, is step it up. And so, you know, we took money out of bonds in the in the pullback that we had. We took money out of bonds, we put it into stocks, we're overweight large cap, we're overweight mid caps, and so I think that if we had another opportunity we'd probably boost that bet. But, you know, we're trying to think ahead. We think the economy is going to be slow the next couple of quarters. We wanna try to position ourselves for what we think is going to be a better economy,

not just here in the States, but abroad as we cross into 2026. So, you know, we've liked things like tech and communication services. We like financials. We've liked energy, which has been a little tougher, obviously. Today's good, but a little tougher.

We like actually utilities, which I think has some defensive and some offensive qualities. So we're trying to position, we think this S&P 500 is going to be 6500 maybe by the end of next year. So we're not in a big rush to buy stocks here, and we think we'll have opportunities to buy some lower. What do you think the market is now assuming and pricing in with regard to the trade back and forth because it seems as if we may end up in suspense for a little bit longer here

if there isn't some kind of a broad resolution by early July? Yeah, I think that when these 90-day pauses expire, there'll probably be a little more volatility there. But I think the market believes that we're going to get at least some smaller trade deals and the deals that we work out, whether we saw the UK deal, whatever we work out with China, whatever we eventually work out with the EU, that there is going to be some adjustments there. We're probably going to see some 10 percent tariff levels and so basically the tariff friction is probably going to ease going forward and you know the unemployment rate is probably

going to not go too high. We think it will be 4.8 percent by the end of this year but you know I think there's some assumptions built in that might not pan out. Yeah, I guess we should hope they're rational assumptions. We gotta test that as we go along. Scott Wren, thank you very much. As we head into the close, looks like the S&P 500 and the Mad Doc

are gonna have broken three day wins. The S&P down just about one quarter of one percent, losing a little bit of a morning rally. But the Dow is just barely in the green. That's us at the closing bell. Soon it's overtime with Morgan and John.