Closing Bell - Closing Bell: The Road Ahead for the Rally 7/2/25

Episode Date: July 2, 2025

What’s next for stocks? Solus’ Dan Greenhaus, Hightower’s Stephanie Link and Invesco’s Brian Levitt. Plus, Plexo Capital’s Lo Toney tells us how he is playing the tech space right now. And, we get some top plays for your portfolio as we kick off the second half with Michael Bapis from Vios Advisors at Rockefeller Global. 

Alright guys, thanks so much. Welcome to Closing Bell. I'm Scott Wopner, live from Post 9 here at the New York Stock Exchange. This Make or Break Hour begins with the historic rebound in stocks. Whether it's gotten too tired, or is it about to take another leg higher after the holiday? We'll ask our experts over this final stretch. Let's show you the scorecard here with 60 to go in regulation today. The S&P 500 did hit a fresh intraday high a little bit earlier. We'll follow that right into the close of course. The rotation that was so pronounced yesterday not as prevalent today but we are seeing some first half underperformers continue to run like the Russell. It is leading small caps catching a nice bid better than one percent there. Apple is up again after getting a nice upgrade. It was the worst performing of the big tech names in the first half. Tech is a group strong today. Nvidia is chasing four trillion dollars

in market cap it's not that far away at all. 3.82 trillion. And Tesla looking to end a six day losing streak following its better than feared delivery numbers. Still a miss but not as bad as some had feared. It does take us to our talk of the tape the road ahead for this rally. Let's welcome in Dan Greenhouse. He is chief strategist for Solace Alternative Asset Management. CNBC contributor Stephanie Link of Hightower Advisors and Invesco's Brian Levitt. We're gonna have one big conversation about this record-setting market. How's it feel to you here?

Yeah, it's pretty good. We're going, we're not going out because we've still got an hour, but we're at the highs of the day, up 40 basis points. For the day, I don't think the rally is phenomenal. A lot of it is short covering, there's some low quality aspects to the rally, but we've had a terrific run.

We're 25% off the lows, which is among the strongest rallies we've seen in the last 40 or 50 years. So given that, I think some breather, so to speak, or some low quality aspect to it here at the tail end is not out of the realm of possibility and certainly it's coming to fruition. Plus, you have some of the headlines we were just discussing

that the House doesn't appear to have the votes as of yet. This is probably gonna go to the August recess, so there's gonna be some debate about that. The labor market continues to show signs of weakening, and the Fed doesn't yet appear to be on the more immediate rate cut bandwagon. So some breather after this, dare I say, record rally, probably not unwarranted. Okay. You set it up pretty well, right, with the major issues that are in front of us as we

officially make the turn for the second half after this holiday weekend. How does it look to you? I'm interested that we're broadening out Scott into different sectors beyond tech, beyond industrials. We are seeing financials participate. Yeah they were record high. Maybe just maybe we're getting discretionary to participate. You combine the four sectors at 68% of the S&P 500 waiting. If you get all four to participate, I think you can go to new highs, but I think you want to step back.

Why? Why are we going? Why are we doing so well? We're doing well because the economy is doing well. And I can list a number of indicators that we get, but the most important one is copper. Copper is up 25% year to date. And that is very interesting to me. It is all about grid and all about data center, but it's also about international.

Add on what we saw yesterday from China in terms of activity in the gaming sector, globally you're seeing better growth. I think that's what Copper is telling you. And what does that all mean? It means that earnings are gonna be really good and I think they're gonna surprise to the upside. Sure, but I know you would admit,

I mean, one day and a few hours worth of rebound in horribly performing sectors like discretionary, which was the worst in the first half of this year, is not exactly a trend that you can count on yet. I think you've seen a stabilization. We've talked about housing for the last month. It's not going down on bad news. We have really bad earnings, right, from KB Homes and some of the others, and the stocks did not go down. You've had, yeah, certainly just a bounce yesterday from the laggards and they participated.

Like retail, for example, right? Some retail is good and some retail is bad, right? I mean, Costco and Walmart are great. Target is terrible, but Target bounced the most yesterday, right? So I think there's a lot of bad news in some of the department stores and some of the retailers, but in the meantime, you have gaming, you have lodging, you have hotels, services continue to drive. Oh, and you also have a lot of other parts of services, like the cruise ships, they're doing really, really well.

And you listen to some of the management teams from these companies and they're telling you that the consumer is quite strong. Bookings are quite strong in the cruise ships. So you don't care about, I mean, ADP doesn't mean anything to you because you have been concerned of late about the labor market.

You have raised those issues. Not that ADP usually runs exactly through to the jobs number itself, which we'll get early tomorrow because of the holiday. But right, claims have already been elevated. It's not like you can just blow that off and say, well, everything's just great across the board. No, I would never say that.

And that's why I actually talked about the initial claims, because that's the only piece of data on the jobs front that I really pay attention to, because I think it's more leading or coincident. And it has gone from the twos, two tens, to up to 235, but it's kind of stabilized. If it just stays there, I think we're more leading or coincident. And it has gone from the twos, two tens to up to 235, but it's kind of stabilized. If it just stays there, I think we're gonna be just fine. And in the meantime, wages continue to be elevated,

inflation is coming down. So that's a good setup for the consumer. And that's why we have seen the consumer hang in there. I'll just add real quick. I think Brian, you would agree, if jobless claims stabilize at the current level, I would go a step further and beyond, I think we'll be fine, I would say we will definitely be fine if claims can stabilize at these levels.

Oh, absolutely. And the other thing you have along with that is inflation expectations are very much contained in this. So, even if you do get a bit of weakness, if the Federal Reserve looks at this and says inflation expectations contain, then they can start to think about lowering interest rates as well. I mean, Scott, the way I think about this, you know, investors have to remember the markets are forward looking.

Sure. Right. The markets are ahead of the economy, not vice versa. We go down 20% from February 19th to April 8th. It's a market anticipating some weakness. And what we're going to be grappling with here in the short term is some of the weakness as you know this economy slows from some of the policy decisions made and still elevated interest rates but the market is already looking ahead to what it believes

will be a better policy environment not only on the trade front but also from a monetary policy perspective. Look at the deal today right if? If you consider it that. With Vietnam, okay, 20% tariffs. Look at the retailers that are most in the wind of that, if you will. Nike, so the stock, it's up. And up nicely.

Why? Because the market price says, well, okay, 20% is not as bad as maybe we thought it would be. It's not as bad as the reciprocal tariffs. So maybe that's the statement across the whole trade and tariff thing. It's not going to be as bad as the market first feared, so put that in the win column, not the L. Yeah, I mean the markets are always going to trade on better or worse relative to expectations,

not good or bad. So April 2nd, Liberation Day, was a day where the policy was worse relative to what expectations would be. We sold off in that. We got something of a policy response from the administration, and now things are incrementally better or in many instances significantly better than we initially thought they would be. And people think that this is now the table set for the economy is not going to be as

slow as people once feared. The tariffs aren't going gonna be as slow as people once feared, the tariffs aren't gonna be as bad as people once thought, the Fed's gonna actually cut maybe more than some expected because you're not gonna have as bad of inflation related to the tariffs as was once predicted. Yeah, listen, you had Lizanne Saunders on recently and she made the same point, it's not good or bad, it's better or worse, and in a lot of respects,

especially tariffs, things are better. And so as we look ahead, I would push back somewhat on Brian's point and say, with respect to markets being forward looking, there is a belief that a lot of the assumed impacts of tariffs now are not gonna come to the fore. And I know that we have two PCEs and three CPIs before the next Fed meeting on September 17th,

including data for later in the summer, obviously. If those reports are coming in at.2 or so, you're gonna get a rate cut in September. If they're coming in.3 or.4, that conversation gets a little more difficult because then Jay Powell's gonna start to say, hey, now we're seeing the impact that we thought was coming all along.

It just took maybe a month or two more than we previously thought. And I think over the next, call it two months, that is the single bet that you'll be making as investors. We'll see. Do you think Nike, for example, is gonna raise prices because their costs may go up, the importer's costs may go up,

and they'll pass it along, and Nike, with all the issues that it has, is gonna raise prices? Well, yeah, the issue right now, look, listen, the argument I've been making since the beginning is the cost increase is going to be borne by three different parties, the exporter, the importer and the consumer. The exact share of that we don't know and Nike is a good example. How much of that are they going to put on suppliers out in Vietnam?

How much are they themselves willing to eat margin? And how much is the consumer going gonna pay in terms of higher prices? But the bigger issue right now, and a couple of Fed members have flagged this in terms of their patience and wait and see attitude is, even for companies that aren't importing, to what degree are they going to look at companies that are importing and are passing on prices, and they themselves

raise prices also, even though they don't have higher input costs, and that's a big worry for the Federal Reserve. And the broadening out of the inflation worries is what's really, for now, keeping them on the sidelines. I'm trying to convince themselves that July might even be a live meeting or more live than before it was dead. Now it's thought, well, maybe it's a little bit live. Let's see what happens by the tariff deadline.

No, because you're not going to know what happens in terms of costs, higher costs, from the tariffs until probably more like August, maybe even into September. So I do think September, it could be likely, and if it's not, it'll be the following meeting. The point being is it's going to happen, and the Fed is actually, Powell has actually said we would have been already lowering rates if it wasn't for the unknowns of the tariffs. I just have to answer your question on Nike and the prices. There is no way they're going to be able.

There's no way they're able to. It was a rhetorical question. I understand, but there's no way they don't have product to raise prices. So they're having a whole bunch of struggles, but I do think you will see higher prices in retail. But there's others too, right? Walmart has this back and forth with the administration.

Can they raise prices? Maybe not. Does anybody want they raise prices? Maybe not. Does anybody want to raise prices? The last couple of years have taught us anything. It's that companies are able to raise prices. And you brought up the cruise lines earlier. Part of the reason they're doing so well, besides demand for long haul ships and vacations,

is they've been able to successfully raise prices. And they were one of the last to do it, believe me. Margins were up 61 basis points for the S&P 500 last quarter alone. And the MAG 7 had much higher margin increases. So I think that's going to be a big part of the story too in the second half of the year. You really believe that it's time to lean into the losers of the first half and think that there's going to be a catch up, a reversion, a rotation, whatever you want to describe it as, but all those stocks that didn't do well at all are going to have their day in the second half of the year.

If you're looking out over the next six to 12 months, the way I believe this will play out is the Fed will look through a price shock, they will lower interest rates, you'll see international activity picking up, giving stimulus and lower rates, and you'll start to see a re-acceleration in economic activity and a pick up in leading indicators and that will broaden markets. I mean, that was, if you think back, that was the setup coming into the year. That was the expectation, good nominal growth backdrop in a federal reserve that wanted a ease and of course the policy challenges disrupted that.

The table was set for everything. Yeah. You're going to have animal spirits, you're going to have a pro-growth administration from day one, you're going to have deregulation from day one, tax cuts and everything else that was almost in the books and then we had to rethink everything but I played it as delayed not denied. Delayed not denied. You're still going to get all of that. You still get it. You just had to wait longer than you thought. Correct. And with respect to the bill that's coming, like at the end of the day, those tax cuts

are getting extended, whether they have to do them by themselves or in some larger one-big-beautiful bill. So I'm not worried about personal income tax rates going up, but a good thing to pay attention to with respect to the broadening and a rotation is there's components of that bill that are getting much less attention like interest and deductibility. And so there's a portion of that bill that's going to allow companies to deduct 30% not of EBIT but of EBITDA which is a broader measure which allows for a higher deduction which benefits companies that have higher DNA aka higher levered companies which is small caps. And when you look from the bottom in April 8th the IWM has done as well as the SPY.

Well, this rotation trade over the last two days has benefited the Russell more than anything else, to your point. That's why it's up another 1% today. Yeah, so I don't... Whether it's lasting is the question. Well, of course. And listen, at the end of the day, those companies in the S&P 500 are meaningfully better companies. I have dismissed the Russell 2000

as some sort of economic or market indicator for the better part of two years now. I'm not gonna change my tune now. However, there are tactical reasons to be optimistic on those names, but with respect to the rotation, I don't know why one would look at the laggards, if you will, because the companies that are leading.

Talk to Steph, there she is. The companies that are leading. Not all, not all laggards. No, but you know my point. I do. The companies that are leading are leading. Not all laggers. No, but you know my point. You're looking for the broadening. I do. And you kind of are.

I look for the value. I look where there is value. Well, you can call it value. We'll call it laggers. Not necessarily. I will tell you, I don't think it's one or the other. Winners or laggers. I actually think it's where you're gonna see

earnings go higher. Those sectors and stocks will go higher. And I do believe technology, numbers are going higher. They just are. So you want to stay involved there. Industrialism, no question about that. Dan and I have been talking about the grid and power forever. Those numbers are going much higher, especially if you look at the bookings, the backlogs

between now and 2030 in that sector. So those two sectors I think still do well. They are not cheap, but the numbers are going to go higher. Where I'm more excited, we talked about this yesterday, financials numbers are going higher, especially after the stress test and all the buybacks that we heard. But are those value stocks? They're trading at 12, 13 times earnings and 1.2 times. But look at how far they've run.

It doesn't matter. So they're still cheap. Because the numbers are going higher. So they're cheaper than they actually appear. And now you have dividends on top of that. And then discretionary is debatable. I'll give you that, Scott, absolutely. But I do think that the expectations are so incredibly low. Numbers have been revised so much

over the last several years, so that now the bar is lower. So we may not be happy with massive growth, but the numbers are going to get revised higher. And that's where people follow the sectors. Can we do from like an April, let's do like a three month on the financials. In the financials I would add it's not just the big banks although they're doing quite well.

Look at the chart of Northern Trust is doing exceptionally well. We know I've mentioned the card companies, the exchanges, ICE and SIBO. There are a broad swath of names in the financial sector that are doing very, very well. It's not just the big banks. Something like Wells Fargo, they're gonna buy 15% of their market cap. They're gonna buy back 15% of their market cap.

That's $40 billion. That's a huge tailwind. Now, I wanna see fundamentals, and I think we will see fundamentals improve, but if you have the combination, that's very powerful. Everybody raised their dividend today too, because of the stress test. You like this group? And I think we will see fundamentals improve. But if you have the combination, that's very powerful. Everybody raised their dividend today, too, because of the stress test. You like this group?

I do like this group. And it's back to this normalization of the yield curve story. It's back to a pick up in economic activity story. Yeah, it's all part of the same trade. If we can get through this soft patch in the economy, which most indicators suggest that we will, we don't get a shock to inflation, we come out on the other side of this

with rates going lower, the yield curve normalizing, steepening, and economic activity picking up. That favors all of this recovery type trade, small caps, value oriented, non-US. There are some who we've talked to over the last 48 hours or so on this show. We look at 6,200 on the S&P who say,

well, you can maybe get to even 7,000 this year and you can certainly get to it by the middle of next. Sound outrageous to you? 7,000 was my rough price target coming into the year. Now, fortunately, as a non-sell side strategist, I didn't have to revise that target down just to revise it back up like so many of my friends. But, yeah, I think 7,000 is still possible, but I want to just go back and say, yeah, right now

there's a lot about which you would be optimistic. We're all talking about the economy and earnings and the prospects, etc., etc. But the tariff data remains still something of an X factor, and July 9th is not that far away. That's fair, that's fair. That's why the Fed's gonna do the wait and see. Yeah, I see what happens. But I wonder at some point, do you go with the idea your base case becomes,

you know what, not gonna be as bad as we thought. And as Brian said, the market starts to place its bets long before you figure that out. Well, you could argue the markets are ready placing their bets the S&P you blink it's up 6% for the year. And I would say you know with regards to the Fed it really does come down to a balance of risk story. I mean we're talking about jobless claims picking up we're talking about how they would like to be lowering interest rates already Jay Powell had mentioned that we know we're gonna get price increases right it? It's going to happen. Tariffs are going to lead to higher consumer prices. The question is,

does the Fed look through that? And that's why I brought up inflation expectations very early on in the conversation. So long as the Fed doesn't feel as if they're losing credibility, if inflation expectations remain contained, then I believe the next move lower. Next move is gonna be lower. We're looking at rates across the curve, a good portion of it. Does the bond market have one more moment to voice its displeasure with anything that's happening? And does the equity market pay attention to that? I don't think the spending story

is a problem for the bond market at all. The 10 years we discussed, and it's up on the screen now, call it 430, is not telling me that there's some debt crisis imminent. Although admittedly the bond market never tells you there are debt crisis until it does. But I don't think the US is on the verge of anything like that. We know whether it's 3-3, 3-8 or 4-4 in terms of increased trillion of spending, it's a lot. And we also know that growth's probably not gonna pay

for all of that. So no, in that sense, I don't think the bond market's gonna tell you anything. But again, if the next couple of CPI and PCE reports start printing.4,.5, and consumer confidence takes another leg lower, that may be a different story. You guys agree? Oh yeah, but ultimately, so could you have another

selloff in markets with the tantrum of the bond market with inflation? Yes. The question is whether that's a cyclical move and an otherwise secular story. And I would view that as more of a buying opportunity. I don't believe the Fed's going to view that as having to raise interest rates. The Fed is going to view that as a shock to prices that happens not all different than a drought or a war, a shock that happens to prices that are then

going to moderate. And so you may have to put off when the easing comes, but I would still, my expectation would still be the next move is easing. The last question to you, Steph, about the precipitous decline in the dollar, which is getting a little bit of a rebound today because of some issues overseas. You've painted that as a positive. Is there a negative?

Is there a negative if it continues its slide? It's off to the worst first half of the year or the worst start to a year in several decades. I certainly would worry if the speed of the decline intensifies, but as of now, I think it's pretty contained. Look at that. Right? Yeah, it's pretty contained, but about 60% of the US multinational companies in the S&P 500 have business overseas, and so I have said it's going to be a tailwind.

I'm not sure we're going to pay for that. I never really pay for currency, by the way, on the upside or the downside, but it will be a nice tailwind, at least from the headline point of view. So I don't worry about it too much. I'm surprised that with the dollar decline, energy hasn't acted better. Materials are catching a bit, but energy hasn't acted better,

and that's surprising to me. Well, OPEC's got, OEL has OPEC adding barrels to the market. I know, but it's a power. But real quick on the dollar, you're still up 30% or something from 2014, when the Fed was hiking and nobody else was.

The dollar is still 60% of global reserve assets. Something like 85% of global trade is still in voicing dollars. There's a lot of stories about the death of the dollar. I'm on the other side of it. I'm with you. You are. You were smiling when I was asking Steph the question. Well, I mean, I'm with Dan on this.

I mean, I've heard so much about the US dollar losing its status, its place in the world. It was a very highly valued currency in an environment where the US was really providing the fiscal support in the world. We had the exceptional businesses. You're starting to see some fiscal support outside the United States, good tech businesses in China. You would expect to see the dollar moderate from its very lofty levels. All right. That was good stuff. I enjoyed that. We'll leave it there. Thank you, everybody.

Brian, step in, Dan. Thank you. All right. From paper assets to digital assets, Christina Parts-Nevalos is tracking big moves now in the crypto space. There are many. That's a good segue for us. I was wondering where you were going with this, but yes, Ripple, the company behind the cryptocurrency XRP that you're seeing on the screen right now, has applied for a national bank charter. Ripple CEO Brad Garlinghouse announced on X following a Wall Street Journal report. XRP, you can see, popped on the news. Initially just around here, it was about 12 PM, see up about 4%.

It's the latest effort though for the cryptocurrency industry as it looks towards traditional finance. In fact, it's even not the first to apply for a national bank charter. Stablecoin issuer Circle previously applied for a national bank charter on Monday. You can see it's down about 7%. It fell on the news, though it was already lower when the day started before the news broke. The crypto sector as a whole, though, really higher for the day. Robinhood hitting an all time high.

Coinbase among the leaders on the S&P 500. You can see Robinhood up almost six. Coinbase up also almost six. And a lot of this is hovering around Bitcoin. And Bitcoin hovering around $109,000. So that's helping a lot of these names. Scott. All right, Christina. Thank you, Christina Partzanevalos. We're just getting started here up next at Tech Trifecta. Three big stories on the MegaCap front today. We break it all down with Flexo Capital's Low Tony. We're live with the New York Stock Exchange, and we're back on the bell after this. welcome back. Three big stories.

We are watching in the tech space today. Steve Kovach here with a rundown. Busy, busy day in your area of the market. Huge day. So let's talk about this Apple upgrade first. This is coming from Jeffries. They're moving it from to hold from underperform and they're saying the June quarter iPhone sales, they could be better than expected.

And the growth in the iPhone would be thanks to government subsidies over there in China. Plus we saw some of that pull forward demand. But still, for the iPhone 17, there could be possible price increases that could hurt demand in the back half of the year. Now let's switch gears over to Microsoft. That was the big story in tech today. Laying off less than 4% of its staff, that would be about 9,000 employees. Those cuts are global and largely affecting middle managers,

a lot of efficiency gains, Microsoft says about this. But look, no mention so far that AI was a factor in those layoffs, kind of like we heard from Amazon's Andy Jassy. Now, let's move over to Nvidia because this is related to Microsoft as well. The information reporting, one of Nvidia's top customers

Microsoft is slowing down plans for its own artificial intelligence chip That's some optimism there that for many years to come and pretty much guarantees Nvidia is gonna have Microsoft as a top customer for some time now and then finally the new fiscal year for Microsoft we should get some detail on capital expenditures for the next 12 months and how much would actually go to NVIDIA. Already said that it's going to grow from $80 billion in the fiscal year that ended a couple of days ago, but at a slower rate than that year.

Then finally, I know you said trifecta, but let's make it a quad-fecta here, Scott, because Oracle is at new highs today. After Bloomberg just reported, OpenAI is planning to rent its data centers as part of that big Stargate project that was expected, of course, but it's gonna be a lot of revenue there

for Oracle over the coming years, Scott. All right, I'm glad you pointed that out, Steve. Thanks, Steve Kove back. Joining us now at Post9, Plexo Capital's Low Tony. He's a CNBC contributor. Welcome back, it's good to have you. Thanks for having me. Seems like, in part because of what Steve

was just talking about that four trillion dollars in market cap for that company is a formality with Nvidia. At this point it seems like that's the case at this point. That how it feels like this is up up and away. I mean nothing can stop this. I think we're going to start seeing more competition. You know obviously there's going to be other solutions that are available. We're starting to see that.

I think there's going to be other options available for folks, but nonetheless, I think Nvidia at this point, clear leader and setting the tone for things to come. When you hear that other companies, you know, AWS, I mean, Amazon making their own chips and others too, to your point, did it give you any pause at all over where Nvidia is relative to everybody else, even if other competitors are coming? It would, if it were the case that we believe

that the growth was stalling out for AI, in fact, is actually increasing. So I think with that bigger pie, Nvidia will still play an important role, albeit even with increased competition. When you look at all of these companies, do you have any pause in your belief that they can continue to do what they've done,

whether it's from a public equity standpoint, all of the spending that they've done, the return on the investment that they're getting today versus what they think they're going to get tomorrow. Are you as optimistic halfway through this year as you were at the beginning? I mean, let's look at what happened towards the end of last year and the first half of this year, right? We saw a lot of headwinds that pulled down not only big tech stocks but the market in general.

But I think what we've seen now is this resilience around tech is largely led by AI, right? We see that they're probably going to have like almost up to $2 trillion in spending on AI. It's here. And that has both shown in the case of Nvidia, I think it's also shown in the case of Apple. And the point was made earlier, Microsoft's layoffs. I want to talk about that. Well, I was going to ask you about that next.

So what do you want to say about it? So what I would like to say is, even though nothing was said officially by the company in terms of the impact that AI had on those layoffs, I think that that could be a canary in the coal mine moment. And this is why I say that. The canary in the coal mine moment. And this is why I say that. The canary in the coal mine, I think,

it pertains what we're seeing with the advancements of AI, particularly around code generation. If we look back, Microsoft was a leader of their acquisition of GitHub and the copilot. They were able to really start and set the stage for auto generation. But that was more like predictive text, like when you're writing an email

and it tries to figure out the next word in that email. We're in a completely different moment now. With companies like Cursor, the startup that's one of the fastest AI companies to $100 million, did it in a year, what they're doing is they're completely redefining what it means to use AI. This is like the equivalent of instead of line by line and word by word, they can actually use the context

of the emails that you've received and then companies like Cursor can write the email for you. So when it comes to code generation, I think what we're seeing is the potential for not just a cyclical moment for Microsoft to identify efficiencies because they might be worried about what the market is going to be showing. I think we may be at the beginning

of a complete structural reorganization of what it means to be a technology company producing software and integrating AI. I think no job is safe. It used to be, hey, go to college, learn how to code, get a great job and you'll be safe. I don't know that we're there anymore. I think even when you look at people

that have the jobs that are creating the AI, I don't even know if those jobs are safe anymore. That's a scary proposition that you lay out, that the fears around AI, that maybe this is one of the first true moments of roles being either fully redefined or fully automated. And if a company that's right in the epicenter of artificial intelligence is telling you that and acting on it, gosh knows what is in store

for everybody else. That's right, who else better knows, right? We see now that engineers on a daily basis, or up to 70% of them, are using AI as part of their daily workflow, right? And so what we see is the ability for these new tasks where before we said, oh, AI is going to do some of the more rote work, right?

And they can do higher level work. I think now what we're seeing is a complete restructuring where there's going to be a new need for a new skillset to kind of oversee the architecture for the development of these models. But I don't know if we're going to see the need for some of these lower level engineers that are doing some of the more basic tasks. Now we haven't gotten to the point where AI is able to produce code that's free of all bugs, right? Like they say up to you know potentially 40% of the code

generated might be bugs or duplicative code, so that brings a little bit of debt to the process where code bases may need to be completely redone. But AI is gonna help there too. So I'm thinking of like 18 months ago, we sat down with Mustafa Suleiman out in San Francisco. He of course now the CEO of Microsoft AI. He writes a book called,

he was one of the co-founders of DeepMind. DeepMind, yes. He writes a book called, he was one of the co-founders of DeepMind. He writes a book called The Coming Wave. You're telling me that the wave is here. It feels like it. I think what we always know with certainty is these technological shifts always get here a little bit faster than we anticipated. Look at self-driving cars, Waymo.

That's so far away, and now look, you see Waymo's, the only thing holding back Waymo's is their ability to scale to all these cities. To be continued for sure, it's good to see you. Thanks for having me. Thank you. All right, slow Tony, Plexo Capital here on Closing Bell Up. Next, top plays for your portfolio as we kick off the second half. Don't go anywhere, Bell will be right back.

Welcome back. Tech stocks driving the S&P 500 today to a new intraday high yet again. Our next guest says to stick with those winners in the second half of the year. Joining us now at Post 9 is Michael Bappas of Vios Advisors at Rockefeller Global. Welcome back. Great. So you still want to ride this winning trade? Why so?

Look, I just think, again, technology is changing everything that we have. The metrics have actually changed in the way we evaluate jobs. I think this is, people are trying to make sense of how technology has changed our world from the last 40 years and what it's going to look like in 40 more years. And the next big topic is AI.

Are jobs going to be replaced? Is it just going to be different jobs that are, you know, reinvented? And I think you're starting to see the labor markets try to begin to figure that all out. You want to pay a price though, right? You look at the run that these stocks have had,

you could show a year to date, and certainly off the bottom, tech has led us back with that valuations, you can see it from the low, right, in April, as those stocks have gotten a huge run, their valuations have gone back up to the point where some say they're just too expensive. I don't think technology will ever be too expensive. I think in the current environment we're in right now, you're going to always need it.

You're going to keep reinventing people with technology. You're going to keep reinventing jobs with technology. Just look at our whole world and the way we live. I mean, the devices we have, our cars, everything we do in today's world revolves around technology. And now that AI is coming on, you're going to see how is that going to affect the labor markets? How is that going to affect jobs? People are going to have to reinvent themselves.

People are going to have to reinvent roles in companies. And that is just going to drive technology. I mean, I don't see how it slows down for the next five years. In the notes today, you say, as we approach the mid-year, uncertainty is at the top of investors' and clients' minds. I almost feel as though we're making the turn

into the second half. We have more certainty at this moment, or certainly a lot more than we feel like we had just a few months ago. Don't you feel like the picture's getting a little more clear? I agree, it certainly a lot more than we feel like we had just a few months ago. Don't you feel like the picture's getting a little more clear? I agree, it's getting much more clear. I still think you're gonna have,

you know, the rotation from growth to value happened a little quickly, and that's what drove the valuations down on the tech companies. But you're gonna see a lot of these companies that haven't moved in five years because of the tech driving the markets, you're gonna see them step up and start to make money as well.

Especially if rates start to come down, the financials are going to outperform, you're going to see pharmaceuticals, I mean we're more independent on pharmaceuticals than we ever have been as a society. The baby boomers are getting older, there is just more technology around pharma, and so some of these sectors that haven't really moved

are gonna ride that technology wave as all of these start to move higher. So you agree with some of the folks that we talked to at the top of the show, this big broadening trade that you think's gonna happen between now and the end of the year that's not gonna be so top heavy. I mean, in tech and some of the bigger stocks,

tech, industrials, financials. Yeah, look, I think they're going to all drive it higher. They're shrugging off the employment data today. Let's see what happens Thursday. And let's see if it becomes cyclical. If that becomes cyclical, then that is something to watch and to be worried about. But currently, the earnings are still strong.

And last quarter, companies had really good strong earnings. Third quarter, fourth quarter, if that keeps up, you're going to see the markets go higher because they'll figure out the geopolitical issues. You're starting to see the trade tariffs start to get figured out. You're starting to see, you know, they'll figure out this bill that they're trying to pass

or don't pass, you know, and all of that stuff is noise that's important, but the refocus on earnings and the refocus on where the markets are moving is probably the most crucial thing to watch along with the unemployment. You need the Fed on your side? I think you do. I mean, you know, I hate to say that. You need them to cut rates this year for your story to work?

Yeah, I think you do. I think you're going to need them not only for inflation, but also for to help banks and to help productivity in financial firms. How many cuts you need? Look, I'd like to see at least one and maybe up to three. banks and to help productivity in financial firms. How many cuts do you need? Look, I'd like to see at least one and maybe up to three. I mean, I just believe that we're in an environment now that any negative movement will derail something more quickly than any positive rate cut.

All right, well Goldman's gone up to three, so maybe you guys will be right on that. We'll talk to you soon. Thanks for being here. Thanks for having me. Take care. Back with us here. Up next, we track the biggest movers into the close today.

Christina Parts-Nevalos is back as well for that. What do you see? Scott, we've got a major health insurer that's posting its worst day ever and dragging down the entire sector, plus footwear stock surging. I'll tell you why after this break. Music We're 15 for the closing bell back to Christina now for the stock she's watching. What's at the top of your list?

I have a sea of red. Let's start with Centene plummeting after withdrawing its 2025 guidance, citing weak data from 22 of its 29 states that could lower its adjusted earnings by $2.75. And that's why you're seeing other health insurers like Molina Health down 22%, Oscar Health 19%, CVS all falling in sympathy.

And retail stocks like Nike and On Holdings higher after President Trump announced a trade deal with Vietnam, including a 20% tariff on items made in Vietnam where Nike and on produced large amounts of product and you're thinking 20% that's still a tariff it's still less than the 46% that was initially proposed the stocks moved diverged from distributors feelings on the deal though the footwear distributors and and retailers of America issued a statement calling the 20% tariff bad economics.

Nike up 4% on holding up 3%, Scott. All right. We're seeing just a bit, Priscilla. Thank you. Still ahead, Intel falling in today's session. We'll tell you what's dragging that name lower when we come back. 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. Plus Intel is tumbling today.

Christina Parts-Nevulos is going to tell us why. And Phil LeBeau on Tesla and Rivian's latest delivery numbers. Michael, turn to you. What stands out to you on this day? Well, big picture, new records beget further new records, usually. What are we on track for, like, the sixth new high in the S&P this year?

We had 57 last year. You got the Golden Cross. Technically, we're back in an uptrend. All that stuff, atmospherically strong seasonals, you got this rotational upward grind. That all fits together. It all makes sense in terms of where we are. And it'll go until it either really overshoots

and gets overheated or we run into something. We run into a little bit of a complication in the macro story, whether that's the jobs number tomorrow or Yield's doing something uncomfortable, we'll have to see what that is. Although it's interesting again that small caps in the broader list of stocks trying to get a little bit of benefit of this rotation

and maybe at least give the mega caps a moment to rest because they kind of got us here. Yeah, I mean even if you have a rollover in some of those lower quality, higher beta names, as long as you have other parts of the market picking up the slack, it's not gonna be net negative for the overall rally. It won't, and now sometimes that choreography

gets a little tricky, and it doesn't always just go in a harmonious way. But what you do have the benefit of right now is that in general, hedge fund fast money positioning is not over at Skis. Sometimes when it's really wound tight, as in February when everybody was long the same stuff and it started to reverse, that created more of an erratic tape. We don't necessarily have that just yet.

Okay, let's talk about Intel for a minute, Christina, because that stock's making some news today. What's going on here? That's because it's hitting the reset button yet again. CEO Liputan is reportedly considering abandoning the company's 18A manufacturing process for external Foundry customers. The 18A really just represents Intel's most advanced chip making technology, but it has failed to win meaningful external customers, according to Reuters. Despite billions invested in development, major clients like Apple and Nvidia remain committed to Taiwan's semiconductor instead. Intel's Foundry posted a staggering $13 billion

in losses just last year in 2024. So Lipputan's solution is to leapfrog to Intel's next generation, which is 14A process and even more advanced manufacturing technology, which is expected in 2027. Intel believes this process, 14A, is where it can finally compete with TSMC's best processes and win back clients. This retreat, though, could trigger write-offs in the hundreds of millions of dollars or even billions, according to the report. More critically, though, right now, it gives TSMC continued pricing power and market dominance, which is why you're really seeing a divergence in the stock.

Intel down about 4% today on the news, as investors seem to perhaps lose confidence in the company's repeated strategy shifts and extended turnaround timeline. Scott. All right, Christina, thank you. Phil LeBeau, tell us more about Tesla and Rivian today. Both of these numbers were roughly in line with expectations. When you look at them together, you might say, well, they don't look terribly impressive. And that's because you're comparing them with last year when they perhaps were seeing higher

sales or higher deliveries. Certainly the case with Tesla, 384,122, Rivian at 10,166. As you take a look at shares of Tesla, why did they rally today? Going into today, there were a number of analysts who said, look, we think the deliveries could only come in at 355, 360. So yes, they're down 13.2% year to date. But those numbers were better than some analysts were expecting. Also in China, in June, sales were up 1%, snaps a number of months where sales were down year over year.

As for Rivian, it's under a little bit of pressure, in part because they gave their guidance in terms of, not the deliveries for 25, that remains the same, but in terms of their production in the second quarter, it came in at 5,979 vehicles. Now they're transitioning from Model Year 25 to Model Year 26. That's the explanation for why the production is lower than where it was a year ago. Nonetheless, there are more than a few investors who are saying,

I want to see you get to that second generation, that next generation of vehicles. Then I'm going to feel perhaps a little bit more comfortable. Finally, take a look at the Chinese EV automakers or EV players. Scott, the reason we're showing you this, XPeng, out with big numbers for the first half of this year, just reinforces what we're seeing in terms of the growth for the Chinese EV companies. Thank you, Phil. That's Phil LeBeau. Job support tomorrow?

Yeah. What are you going to be watching for that? Bond market more than the stock market? Yeah, generally speaking, although it's interesting because today the reaction to the very weak private payrolls for ADP was quickly two-year yields cracked and we had a higher perceived or market priced odds for a sooner rate cut. And then we kind of inched up in yield throughout the day, at least in the long run. That could just be global yields doing that. Health and education, the weak part, maybe that sort of doesn't necessarily spook people. But yeah, you watch the bond market's reaction.

I don't know that the impact on the unemployment rate will be pronounced enough to really change the story for the Fed, whether it gives a growth scare to the broader economy. Look, the first half, we're probably netting out to 1% plus-ish growth. And even though that feels better because the market's made its peace with that, it isn't necessarily a lot of momentum. So interesting how it'll affect the story on that front.

And maybe it'll have a lot more to say about the rotation underway in this market and whether in fact small caps which are at a higher level than they've been at except in late 2021 or after the 2024 election whether that has any force behind it beyond today. Good stuff Michael thank you. SMP has never been higher than it is now. 62.27 is the top of today a new entry-day high