Closing Bell - Closing Bell: What’s Next For This Rally? 8/26/25

Episode Date: August 26, 2025

What could be in store for the next leg of the record setting rally? Plus, we discuss the latest developments following the firing of the Fed’s Lisa Cook. We break down all that and more with Fundstrat’s Tom Lee, Sofi’s Liz Young and Northwestern mutual’s Matt Stucky. Meantime, Apple could be eyeing a new tie-up that could shake up the entire AI arms race. Big Technology’s Alex Kantrowitz and CNBC’s Steve Kovach tell us what’s at stake. And Cheryl Young from Rockefeller Global Family Office tells us why she is cautious on the tech trade. 

Brian, thanks so much. Welcome to closing bell. Scott Wobner live from Post 9 here at the New York Stock Exchange. This maker break hour begins with 24 hours of AI anxiety. That is what lies ahead as Nvidia earnings bloom, especially large tomorrow. Results that could very well make a break the next move for the tech trade. We will discuss with our experts over this final stretch. What is really at stake for this market? The scorecard looks like this with 60 to go in regulation, mostly modest advances today for the majors. not much reaction to news. The president says he's firing Fed Governor Lisa Cook. She says not so fast. We will watch for any developments there this hour. Watching Apple shares too after yet another report says the company entertain the idea of buying AI startup perplexity. Dive into that further as well. It takes us to our talk of the tape, the next leg of this record

setting rally. It's clear where our headliner stands on that topic. He's bullish, as you know. He is Funstratt's Tom Lee. Join us now at Post-Nines. Good to see. you. Great to see you, Scott. So, Nvidia looms large. Does that make or break whether your bullishness comes to fruition moving forward? I mean, I know investors are really anxious, and Nvidia has not performed well the last few times it's reported. But the story arc there remains that that is one of the most important companies in the world in the middle of the biggest structural change in the world economy. So I think Invidia still is a great story. It really wouldn't change our thesis if the stock reacted poorly.

You feel like there's become a little more AI anxiety, as we wrote at the top. You know, from Sam Altman at OpenAI saying that, you know, investors are a little over-eager about AI. You know, meta's reorganized again. They've stopped their hiring. There was another report today that suggested some of these Gen-I-A models. AI models are failing. Do you think there's anxiety in this market about this trade? Well, I think everyone's trying to get situational awareness. Like, is this inning one or two or late innings?

Because we know there's been a lot of value creation and a lot of capital that's flowed in. And we know that Silicon Valley has seen a boom of companies with $100 million annual run rates, like in record time around AI. And a lot of people want to ring the bell at the top. But to me, it still feels really early because there's such a limit. number of stocks that public investors can buy that represent a direct play on AI. I know, but that could lead to bubble-like activity, right? When your pool of investable opportunities remains so small, all of this money rushes to a select

few, and then they have to live up to all of that hype and give a great return on these hundreds of billions of dollars that are being invested. That's not a risk? Well, it is a risk. I guess that's really the next stage of what we have to see, is how does the market accept now adding to the roster of direct AI plays, you know, beyond just figment? And I think, you know, if we look at the next 12 months, there'll be a bevy of IPOs, some really big companies that are later stage. But if they're bought and they produce good growth and their stocks perform well, I would still say that still means we're early innings.

That's still your favorite trade. I think it's the most important trade. I know it's the most important. I feel like that's legit. But is it? I think there's a bigger upside in the owning financials right now, because financials are benefiting from AI. Okay.

So they're the second order beneficiaries. Plus they're getting the green light to build on the blockchain, which could really make JP Morgan and Goldman's business models so much more profitable and change their multiples, expand them. So I think, yes, I'm still bullish on AI, but I actually think the financials are really one of the legs that drive us the next 12 to 24 months. Oh, interesting. No matter what the Fed does from here, I mean, does the rate picture matter for the bank stocks?

It does, because it helps, it provides the liquidity to sort of liquefy housing and corporate lending and bring spreads down. But I think financial sector has produced visible earnings growth for a long time through these cycles, and they are trading like cyclical stocks. They probably, J.P. Morgan and Goldman should maybe have tech multiples. And so I think there's upside for financials. aside from when, you know, when the broadening started to happen on the idea of rate cuts, those were the type of stocks already that were leading this market along with the mega-caps. This is a large-cap stock rally, right? I mean, industrials, the biggest names out of the industrials, the biggest names out of the financials,

the biggest names in tech, we're leading the way. Yes. You think that continues? Yes. And because, you know, at the end of the day, when you look at GDP, for every unit of economic activity, there's one unit of financial. So financials are half the economy, but they're not half the index. Now, I'm not saying they're going to get to half the index, but they really should

re-rate. I mean, I think even this quarter, right, the numbers from J.P. Morgan Goldman and the financials. And look at the bullish IPO. These are all good signs to me that you want to be overweight financials. Does the calendar matter for the market, right? September is historically a bad month. We like to look at the seasonal.

Some people do to determine, you know, what they want to do. do you follow that much? Yeah, I care about the seasonals because that we know becomes the base case for investors, just like August was a month everybody was wary. So then what you have to build in September is, are there things that can be positive surprises for markets? And to me, that's going to be the Fed. A positive surprise? You get to a surprise at this point? Well, okay, a positive versus the base case. Because if you look at all the September's in the past, this time is a Fed on hold that's finally cutting. So that makes this September better. And then the idea, the ISMs could recover, which doesn't, which really doesn't usually happen in the fourth quarter,

but it could finally happen. We've had 29 months of the ISM below 50. So I think that we could have a better than expected September, October, November, December, because of the Fed cutting and now the ISM turning. Yeah, I mean, but not just ISM, right? We got to watch jobs again, and we have to look at the inflation prints again. That's right. Yeah, and that's where, again, that's where we have to rely on the Fed to make good decisions, you know, and Fed independence being critical. because we want the Fed to do what's right for the economy. Some say Fed independence has already shot. And today, or last night's news of the president moving to fire the Governor Lisa Cook,

is the nail in the coffin of that conversation, at least for now. You know, I hope that's not the case in the sense that... Not the case of what? That he actually fires her, or that it's the marks the official end of Fed independence? Both, actually, Scott, because I think that there's a... a window for this to have a dignified ending or outcome for Cook. And I don't know if that means people take a step back and reverse what they've done or if that means Cook is allowed to resign. I think it is important for that to be a process the market accepts because you're

right. I think the market would get very nervous about Fed independence being questioned. Okay. On that note, let's bring in Steve Leesman. He joins us on the phone. Steve, we have a statement now from the Fed. I've been wondering when they were going to say something on this topic, and in fact, they have. What are they saying? I'm just reading it now. Scott, I didn't know where it's going to come out. I have it now. It looks like they're saying that Congress directed that governors serve in long fixed terms

and may be removed by the president only for cause, long tenures of removal for protection for governor's service as a vital safeguard. The Fed will continue to carry out duties to establish by law. Lisa Cook has indicated through her personal attorney, she will promptly challenge this action in court and seek a judicial decision that would confirm her ability to continue to fulfill her responsibilities. The Fed will abide by any court decision. The Fed reaffirmed this community transparency and accountability. So it sounds like they're backing her, Scott, in terms of her ability to challenge this thing in court

and not take any action against her until there's a court decision. That's what it sounds like. It sounds like they're, I mean, essentially not embracing the president's decision to call this cause. They're not embracing the president's own explanation for fire or cause and saying this is not caused, and they're waiting to say the cook has indicated that she will promptly challenge the action in court and see the judicial decision that would confirm her ability to continue to fulfill her responsibility. So they're going to wait, and there's a court decision either way. So where there was some speculation, conjecture, or what have you, that, well, how is the Fed chair

himself going to deal with this, does he, you know, make a move to ask, you know, Governor Cook to step down? This is absolutely sounds to me the opposite of anything close to that. It doesn't sound like that. I agree with you, Scott. It doesn't sound like he's saying to Lisa Cook step aside. It sounds like, you know, a bit of a punt, perhaps, is one way to put it? Like the Fed's here making a decision.

He doesn't have to make a decision. Let the courts decide and what the courts decide, the Fed will abide by. I would just note, Scott, that the Fed chair does not have the authority to remove Lisa Cook. Only the President does. And what the Fed is saying, the President does only for. cause. And that seems to be the distinction that Fed is making here and not really accepting that the decision by the president is for cause. Were you surprised at all? And frankly, I was that, you know, the president's move was so many hours ago and we're just now

getting a statement from the Federal Reserve about one of its governors being fired by the president of the United States. What took so long? You know, Scott, I think I might throw it back at you and say my knowledge of the Fed is such that I'm surprised I have one today, to the extent that I know they act very deliberately and they're very carefully considering their options here. I think that they have not wanted to be involved in this political scrum or even in the legal scrum here. And it's a very, very difficult position for them to be in a sense. that somebody has been accused of something, not convicted of. There are allegations here, and as far as I can tell, Scott, there's been no investigation, only the investigation of the applications, and I have asked FHFA to whether or not they've ever

spoke to Cook, and I don't have a response of FHSA or Bill Polki if he has ever asked what her side of the story is, and I think what I'm seeing here is the Fed is, the Fed is is not going to get involved, but the courts decide whether or not, A, there's a real allegation there or a real crime that's been committed, and B, is another question, Scott, whether or not this rises to the issue of cause. What about to the idea that this now just becomes yet another distraction that Chair Powell has to deal with? You've got questions over the construction costs. Now you have questions over alleged activity from Governor Cook.

of it, of course, superseded by the idea of the president calling out the Fed chair and the central bank itself for not cutting rates in the time frame that he wants them to. You know, Scott, I think you're right that it is a distraction, but the question as to what is a distraction is really one of a subjective interpretation in the sense that you could argue from Powell's standpoint, from the Fed standpoint, that the, um, sanctity of its independence is anything but a distraction. That, in fact, what they're fighting for here is the whole enchilada. And you might even argue, Scott, that none of the other stuff matters if the result

is the Fed can be pushed around that you interest rates, if allegations can cause the Fed governor to lose his or her job. And the ultimate, what you're talking about is a Federal Reserve that is subservient to the administration and the political willings of a single president. That is hardly a distraction. That is the main point. Steve, we'll leave it there.

I appreciate you calling in and in real time reacting to this statement that we've been waiting for from the Federal Reserve. So we'll continue to follow that story. You want to sort of comment on this now that you've gotten this statement and it is a real concern of yours? Yeah. I mean, I think it's actually a balanced

statement because I think the Fed's messages is there's the court of public opinion versus the court of law. And if the court of law determines that there was cause, the Fed would actually support the decision. But I think they're making clear that there's just an accusation. But of course, there's a process to determine whether these accusations are true. So I think it's actually an appropriate response, and it does sound like it would be something acceptable to both sides

because it is simply just saying, if this is true, then there is cause. On the face of it, I would look at the market activity today and say, well, the market's just not really paying attention to the noise around it. But then if you look a little closer, I think, well, the Russell's outperforming today up eight-tenths of one percent. Is that on the idea that if the president is successful in removing Cook, you're just one step closer to filling a seat and a very important one at that? with somebody who's predisposed to cut rates. And that's a rate-cut play. Yeah, I mean, sort of true.

I'd actually think that the rustle's up today because the market's concluding the Fed can operate uninterrupted to proceed with a cut in September. Because I think if Fed independence is questioned and there's a risk even Powell's replaced, that would be a risk-off moment. And that would be the market should just, we should see the VIX spiking

and a general de-risking into. a sloppy September. All right. Stay with us. Let's expand the conversation. Bring in Liz Thomas, SOFI's head of investment strategy. Matt Stuckey as well, Northwestern Mutual, joining us. Liz, you want to just weigh in on how you're thinking about this issue. I don't want to just brush past it so fast. I mean, it's such a significant event in a group of events with this president and how he has reacted towards a Federal Reserve that hasn't cut rates on his schedule and has attacked the chair in ways that we've never really seen before. And in some ways, this move last night is unprecedented in its own right. And how, as an investor, you care or you think

people should? Well, I do think people have to care. I mean, we're talking about the independence of the Fed here, and we're talking about what is going to affect financial markets and the voting members of the Fed that absolutely affect financial markets. But I completely agree with Tom. I think the Fed took a good balanced approach with this to almost say, you know what, this isn't our decision. We're going to put this in the hands of the people who need to make this decision. Whether it's a distraction and they're frustrated by it or not, I imagine they are. However, it is the right thing to do to put it in the hands of who needs to choose how we proceed. It's unfortunate that we're going through this so close to a very important Fed decision on September 17th.

I don't think that it will change what that decision will be. I think it was very clear at Jackson Hole. We're getting a cut absent some really big shock or absent some series of shocks in the data to come. But even if we do see some hotter inflation prints, PCE this Friday, CPI before the meeting, I still don't think that changes the fact that we're getting a 25 basis point cut. Matt, on the scale of concern, where does Fed independence rank for you as a relationship? relates to where you see this market heading from here? Yeah, sure.

You know, I think Fed independence is critical for investors. If we look at, you know, the growth in capital markets in the United States, the strength of the U.S. dollar, they're all intertwined. And so independence at the Fed is something that I think every investor should want. I mean, I would agree with Liz in terms of the comments that she made in terms of what the Fed is messaging here. I think the message is we're going to step back and let due process take its course. And I think that's the appropriate message.

We have a new statement, actually, from the White House on the firing of Governor Cook. Mega Kisela joins us now with that. What are they saying? Hey, Scott, so this is really the first time we're hearing the White House respond to some of the statements today from Cook saying she will challenge this in court. A White House spokesperson saying in a statement to CNBC, the president exercised his lawful authority to remove a governor on the federal board of governors for cause under the statute. The president determined there was cause to remove a governor who was credibly accused of love. in financial documents from a highly sensitive position overseeing financial institutions. So obviously these are allegations. Nothing has been proven. The Justice Department did say they were looking into these allegations against Cook. We also have heard the president a couple

of times responding to reporter questions so far today in that cabinet meeting that is still ongoing. Most recently, he was asked whether he would abide by a court decision on this. And he did say that he would abide by any federal ruling or any court ruling, I should say. but earlier on Cook, he said she seems to have had an infraction and she can't have had an infraction, especially this one, given that it has to deal with housing. And she oversees housing as part of the Fed portfolio. Scott, so more from the White House on this, but standing by the president saying this was lawful authority to make this move.

All right, Megan, thank you for the latest there. Megan Casella. Liz, what I hear you saying is irrespective of this particular move, the move that matters more is the Fed's going to cut rates. And they're probably going to do it in September. whether Lisa Cook is part of that conversation or not. Yes, and I don't think that this changes that. I'll reiterate.

I don't think that this Lisa Cook situation changes the trajectory of what the Fed is planning to do in September. Was that why the market is reacting the way it is, albeit not with some, you know, huge move higher, but we're green across the board, and we might otherwise be, you know, looking at red across the board if there was some deep concern over this issue in and of itself. Well, I think the market is reacting rationally. There isn't really much of a reaction. It's almost the absence of a reaction to it. We don't know what's going to happen.

And I think the market realizes it doesn't necessarily matter what happens with this in the next couple weeks. What we are going to react to as market participants is if we get data that stops supporting what Powell messaged at Jackson Hole. So that being said, I still believe even if we get some hot inflation prints, he messaged that we might get some hot inflation. inflation prints because of tariffs. And that is likely to be a shorter term shock. We're going to monitor the situation. So even that probably doesn't change September 17th. I think the thing that we will debate, let's say data comes in much cooler than expected in these next three items, what we will start debating again is it 25 or 50. I think it's 25. I think it's 25. I don't think we're getting 50. I don't think they have to do 50. And I don't think the bond market is

telling them they have to be 50. Matt, all of this conversation and these new headlines has really overshadowed what is a critical earnings report tomorrow from Nvidia. How are you thinking about that? A bar that's been raised by a stock that's up near 40% over the past few months into this print. Well, not only is it up 40% or the last few months. It's up over 90% from the April lows. And just kind of going into the result tomorrow afternoon, You know, the valuation is higher versus the last couple of prints, you know, about six turns higher on the forward earnings multiple, and earnings estimates have risen about 11% just in the last few months.

And there's a more of a tricky kind of setup as it relates to what kind of guides we should be expecting. And really, the open question mark is China-based revenues, or will they enter into the Q3 guide or not? I think that could be potentially up to a $3 or $4 billion swing factor in terms of the number that's posted. But this might be one of the setups and reactions where what's on the press release might not match up in terms of what's discussed on the call in terms of what type of recovery timeline investors should be expecting in terms of reintroducing China

revenues back into the fundamental story for NVIDIA. Tom, you want to just put a bow on that reacting to that? Yeah. I might say that investors have been now patterned and bracing for NVIDIA to sell off after they report tomorrow. And yet, I think the visibility and I think the conviction on AI is actually stronger. So I think there's a chance Nvidia rises dramatically after they report Wednesday after close. Okay, that's a bold statement from somebody who's not afraid to make them. Tom, thank you. Liz, good to see as always. Appreciate your patience. Matt, as well, as we had that breaking news, we'll see all of you again soon. We're just getting started. Up next, investors buzzing about what could be a big deal for Apple. Kovac and Kanchowicz,

they are back. Standing by with the details. on the conversation. We're live with the New York Stock Exchange. You're watching Closing Bell on CNBC. Welcome back. It might be the most talked about yet to be an executed corporate deal ever. Apple buying the AI startup perplexity. Yet another report today says Apple executives were, in fact, mulling it.

We've discussed the topic so many times before with our own Apple reporter Steve Kovac and Big Technologies, Alex Kanchowitz, we're bringing them back for more because there's more headlines. Guys, it's good to see you. A.K., I'll begin with you because you're the one who sat right next to me here and said no-brainer. Apple should do it. Yet another report now says they were talking about it. What do you think? I think it's still a no-brainer. If you think about what perplexity does, it takes the leading AI models and it turns them into products. Actually, the product that it's using the AI models for, number one is search, but it's also done assistive type applications and AI voice, right? I think a lot of people are going to start speaking with AI with their voice as

opposed to chatting with them. And I'm of the belief that most of the leading AI models are going to commoditize. And if that happens, what do you want to do? Do you want to be building these leading large language models or do you want to be building the best products that you can with the technology? And I think perplexity has shown that they really know how to build AI product. You take a company like that, you bring it into Apple, which has the need and the distribution. And you're looking at a very productive marriage, if you can get the culture synchronization right. And I think that's the hardest part. And I think that's why Apple has hesitated here. Well, I don't know if the courtship is going to turn into matrimony. I mean, it doesn't sound to me, Steve Kovac, from what you've

already told me, on whatever program we've had this conversation that doesn't smoke doesn't necessarily lead to fire in this case. Yeah, and the M&A team at Apple, they kick these things around all the time. that we're talking about now, you know, once upon a time, they're looking at Tesla. They're looking at so many other companies, these major acquisitions. But we know this already, Scott. Apple does not like to do that. This doesn't seem to be the direction they're going in. I'm sorry, Alex.

I know you really want it to happen, but it doesn't seem like they want to do it. Instead, they're looking to partner or license the technology for one of these major LLM providers. Right now in the running, it seems like Open AI, Anthropic. And last week, we got that report that Google Gemini is in the running. And the clock is also ticking, Scott, because any day now, the Department of Justice, or I'm sorry, the judge in the DOJ case that Google lost is going to decide remedies and the fate of that relationship between Google and Apple. And look, Apple is still very attractive to these LLM makers because there's a huge distribution system for them. There's over two billion devices that can get their LLM on. And right now, it seems like Apple was really focused on not necessarily.

acquiring their way to it, but building, doing what perplexity does, building on top of these LLM models and doing it themselves, because the Apple intelligence model just has not worked out. It is well below par and well underperforms all these others. Which Steve would suggest that maybe desperate times call for desperate measures, whether one would consider this to be a desperate move or not. It would certainly be out of the norm for a company that doesn't like doing large deals. deal it's ever done of course is beats they're sitting on a mountain of cash yeah maybe they should because they have no choice and and that is there is a huge camp that's been saying that about apple

for so long they need to acquire they need to buy they need to do something other than acquiring their own stock and we've just seen over and over again throughout tim cook's tenure they're just allergic to that they don't want to do that this this information report had some really good details how eddie q is kind of in that camp he really is pushing to do a big bold deal in artificial intelligence. We also heard from Tim Cook a couple weeks ago. I was in the same room with him asking him about this. What are you thinking about artificial intelligence and how an M&A and how that applies?

And he kind of gave me the same answer he's been giving for the last decade or so when people ask him about M&A. We'll make the decision and we'll make an acquisition if it makes sense. If it's additive towards our product roadmap, sure, perplexity could do that, but also part of their product roadmap could just be, licensing one of these LLMs. That really seems to be the direction they want to go in before spending, I don't even know what it would cost by perplexity, at least $20 billion or more. I mean, I think they're well above that valuation now. That's a huge chunk of money.

We should also note that Tim Cook doesn't think this battle is over, Scott. He sees it as a much longer term. There's a Bloomberg report a couple weeks ago that he told staff in an all-hands meeting that he thinks the AI race is still up for grabs and it's still theirs to win. So we have haven't seen anyone really leapfrog Apple in a meaningful way as far as besides Open AI. So there is still potentially time for them to figure this out next year. It sounds like, according to Steve Kovac, AK, that Apple or perplexity is going to be left at the altar. Well, that may very well be the case.

And I think a lot of things are correct here. I think Tim Cook is right in saying that we're early in the AI race. I think partnering would be a great move. for Apple early on. But I think underlying all of this is a question for Apple, and that is what type of company do you want to be? Why is it that so many acquisitions have failed or have not taken off underneath the current regime within Apple? The report that we talked about at the very beginning of this segment is an information report that had a founder who sold his company to Apple setting up a clock at his desk, waiting for his time to vest his shares to be

over so he could leave and do something else. I don't think a company, any great company is going to be not, it won't be humble and say, you know, we have, there are great ideas and they might be coming from within us, but they also might be coming from without. If you don't believe that the ideas can come from without, then you're going to eventually be lapped by the competition. Maybe it's not today, but over time it will be. And I do think that AI, whether it's in the form of generative AI or some other form that comes down the line will transform the way that we interact with computing. And if Apple is not humble enough to say, hey, maybe we don't have all the answers, maybe

we need to restructure our culture to be one that accepts ideas from outside, that is going to spell long-term trouble for Apple. So whether it's perplexity or whether it's something else, I think the company really has to look in the mirror, ask what type of company it wants to be, and I think to survive long-term it's going to have to be a different one than it is today. We knew it would be worth getting the band back together again. Alex Kanchowicz, Steve Kovac. Thank you very much.

We'll see you soon. Up next, we track the biggest movers as we head into the close today. Christina Parts of Nevelos is standing by with that. Hi, Christina. Hi, well, we have one telecom stock, rocketing 70% on a massive spectrum deal. We'll reveal who after the break. We've got 25 to the bell. Back to Christina for the stocks that she's watching.

Top of your list is what? Eli Lilly, because it's on pace for its best day since April after it received positive late-stage trial results for an oral weight loss drug that means a needle-free alternative to GLP-1s like Ozempic. The CEO of Eli Lilly, David Ricks, told Squawk Box earlier this month that the farmer manufacturer was really hoping for approvals around the world, quote, this time next year, shares up over 5%. AMD also jumped after Truist flipped to buy with a 213 price target, saying the change. chipmaker is evolving from NVIDIA's, quote, price check to an actual partner for major cloud providers, which is a game-changing shift, if it holds true, shares up almost 2%. And last but not least, I tease this, but the shares of the telecon company, Echo Star, are surging over. Look at that 71% today after a $23 billion deal with AT&T.

AT&T agreeing to purchase certain wireless spectrum licenses, which helped expand their service and data speed in more than 400 markets across the U.S. The deal is expected to close in mid-2020. Of course, pending regulatory approval, most likely going through, which is why you're seeing the shares really pop today. Scott. All right. Thank you. Christina Parts and Nubbles. Up next, Rockefeller Global, Cheryl Young is back to break out her tech playbook. We'll find out what she thinks about that sector now. She'll join us next. InVidia's earnings and overtime tomorrow could very well hold the key for where the tech trade heads from here. My next guest is cautious on that. Joining me now, Post 9, Cheryl Young, Rockefeller Global Family Office, Private Advisor.

It's good to see again. You sound like you're a little cautious kind of on everything right now in this market. You said, and by the way, it's hard to find people who are cautious now. It feels like so many people are on the same side of the boat. What has you so cautious? You know, Scott, I'm a rock climber, and I spend a lot of time in Tahoe. And when I go up one pitch, I get nervous. If I go up two pitches, I get a little bit more nervous.

Because I go higher and higher, the more I really care about making sure my rope's intact. I know where my belayer is. I've got eyes on all my gear. And this market has come up a lot this year. But it's interesting because people are saying the markets are coming up a lot this year. But it's not really the market. That's right. It's just a couple of stocks.

Well, I mean, it's a little bit broader than that, in fairness. And there seems to be good reason. I mean, earnings were way better than expected, so the multiple doesn't appear as egregious as some maybe thought it was. The tariffs don't seem to be causing the kind of inflation that the worst fears were centered around. And despite the noise around the Fed, they all but are telling you they're going to cut rates soon.

Powell opened the door Friday, right? I think that his tone is a little bit more open to it. But he's got, as our CEO said, he's got a little bit of a tug of war. You know, you've got job numbers which are not terrible, but not as good as we'd like. And the inflationary numbers, if you look at the consumer confidence index that came with this morning, we have inflation as an estimate at 6.2 increased over the next year. So it looks like everybody thinks inflation will go up because tariffs are just now starting to show some effects. You think stocks are overvalued, just straight up?

I think stocks are overvalued straight up. But again, looking at the index and the P on an index is really tough when it's just a handful of names. If you look at most of the S&P 500, earnings fell 5.2% year over year. It's not up. Again, technology has carried this market, and it's becoming a crowded trade. I get very nervous when I get into a taxi car in New York and everyone's saying, buy, Palantir, buy, NVIDIA, buy two stocks, right? there are more stocks to the market that are important to watch. Do you think there are more stocks to the market that are worthy of being bought today?

Or are you just negative across the board? I do. Look, health care is up not even 1% this year, right? And actually, EPS on the health care stocks increased nicely year over year. But there has been no participation in health care stocks at all. And if the AI boom is real, it should help sectors like health care quite a lot. But you think the Fed's going to cut rates in September? And if you answer that question, yes, then pretty. Presumably, you believe in all of those stocks in an area of the market you say hasn't participated, actually joining the party.

Yes, look, I mean, I've been preaching go with an equal weight index all year over a market cap weighted index because that market cap index has gotten, again, really, really crowded on those trades. So I do like the equal weight better than the market cap weight index. Where I get nervous is that I do think they're going to cut rates in September. I think we get 25 basis points, not 50. The markets, as of Friday, we're pricing in 100 basis points until, call it, June of next year. I'm just not sure we get that much. I think there still could be, again, that tug of war between inflation and jobs. And the Fed has a dual mandate they have to answer, and it's very, very difficult.

You also have to remember in 2021, everyone's accusing Powell of getting it wrong. We were behind the curve on inflation. So if they get behind again, inflation starts taking off, and they have the same catch-up. We saw what happened in 2022. But, I mean, ultimately, they're going to have to make the best guess that they can, and they seem to be leaning in the direction that inflation was going to cause this one-time price increase. You don't buy that?

First of all, I don't see how 25 bases point makes that much of a different. Well, it's the start. It's not the end. It's the start. It's correct. Your fear sounds like, though, it might be the end. Like, for a while, they cut 25, and then they're like, well, let's wait and see. I think they've got to wait and see.

I think we might get 50 basis point this year, but then it's going to be a wait-and-see story that has to play out. And again, going back to how many companies be earnings this quarter, remember, 85% of companies beat in Q3, 2021. And again, 2022, we saw 27% pick to drop to class in the S&P. You feel like tomorrow is a seminal moment for the current state of the AI trade? You know, look, it's interesting because this MIT report just came out on the AI trade, and it sounded disastrous, right? 95% of all companies saw no results, big fat zero, right? So there's a lot of worry that there's a bubble, even some, Altman.

That's right, yeah, we've talked about that. Bubble territory. And again, you know, where the issues are, there's still a lot of hallucinations, 7 to 12% of all large language models are seeing hallucinations, that's a problem. And it's an overconfidence problem. If you have 99% things that go right on your data, but 1% that doesn't go right, how do you believe the numbers? And so there's still some work to be done.

All right. We'll see you soon. Thanks for coming by Cheryl Young, joining us once again at Postnight. Still ahead, Boeing, shares are soaring today. We'll tell you what's behind the bounce coming up. We've got a market flash on United Health, Steve Kovac, with those details. do we know? Yeah, Bloomberg just reporting now, Scott, that the Justice Department is expanding its criminal probe here into United Health to include the prescription management services

part of the business. That's on top of the Medicare investigation as well. And they're looking into how the prescription management services pay doctors within the network. Not a lot of other detail here, but we know UNH has been under investigation for a wide variety of things right now. And we see shares down better than 1% on this new report, Scott. Steve, thank you. Steve Kovac. Up next, we'll run you through what to watch for when PVH reports their earnings in overtime. The market zone is next. We're now in the closing bell market zone. CNBC, senior markets commentator, Mike Santoli here to break down these crucial moments of the trading day. Courtney Reagan standing by to look ahead to PVH's results in overtime. Plus, we have a big move in shares of coals that we're going to get to. Phil LeBow will join us too on Boeing. We're going to come to you first. What's moving coals here?

Yeah, Scott, so there's a headline here crossing from Bloomberg saying that Coles is asking at least some vendors for more time to settle its invoices, which is something we do see retailers do from time to time when it comes to a cash management strategy in a way potentially to conserve cash. We've reached out to Coles for comment and we will let you know if and when we hear more from them. But as you mentioned, we are also expecting to hear from PVH after the bell. Of course, as the parents of Calvin Klein and Tommy Hilfiger, we're expected to see revenues grow more than 2% to 2.12 billion for its second quarter on earnings of $2.1.1, with total gross margins expected to come in at 57%. Now, shares are up about 20% quarter today. That is double the performance of the XRT over that same period of time. But despite PVH beating expectations for the top and bottom line, most quarters over the past five years, shares have been pretty volatile in reaction to results over the past year. Analyst point to strides that have been made by CEO Stefan Larson and his team to reinvigorate its brands, but to acknowledge there's still significant work to do. Last quarter, Larson noted a, quote, increasingly tough macro environment, but sharpening focused

on what it can control pushing forward for on that PVH plus plan, which includes it's never out of stock program, which, of course, can lead to a stock up in inventory. So we're going to see what that's going to look like when we get those results after the bell, of course, when it comes to the impact of the tariffs, as well as that plan for its inventory. itself. And the wholesale environment, we know it can be tough. Last quarter, PVH, though, did see some growth there. We'll see what happens this time around, Scott. Ford, thank you. Courtney Reagan. Phil, what's moving Boeing today? The order that was announced last night, Scott, this is a deal that was announced when

Korea and the United States met at the White House. And when those leaders met, what you had was an announcement about a big deal from Korean Air ordering more than 100 planes. from Boeing. Not a huge surprise here that a deal was announced. That was expected. There are more than 103 ordered or 103 total, including 50737 max 10s, book value, just over $36 billion. As you take a look at shares of Boeing over the last year, the backlog is now almost 6,000 planes. But look at that move, Scott. We are headed towards a fifth straight month, the best since 2018, where Boeing shares moved higher. Also take a look at GE Aerospace. Korean Air as part of this agreement has also struck a deal with GE Aerospace for $13.7 billion

for engines and services it. Scott, back to you. Phil, thank you very much for that. That's Phil LeBowke. Mike Santoli with me now. The market seems to me to be just fine with letting this Lisa Cook thing play out while keeping its eye on the prize. Without a cut. I mean, otherwise you wouldn't have highs of the day or more or less for the majors. I always ask when you get these very kind of noisy, disruptive-seeming policy or political headlines, what specifically should the market be repricing today as a result of this? And I think the market's coming to the conclusion of not very much, maybe just an extra little push in the direction of expecting a bit more dovishness

if this all plays out in a very specific sequence down the road. But we already were pricing in a likely cut in rates in September. So I don't think it's really a change of the story. Maybe it's just a difference in emphasis. And then in terms of the hypotheticals about Fed independence and how much that's worth to the market, I think it's kind of like it'll become critical when that manifests itself some way in a policy error of some time that seems related to that. So for now, not doing much. We're kind of holding to the conclusions the market arrived at on Friday, as we said.

You know, Powell's speech, we lean a little bit doveish. The economy seems okay. Durable goods were fine today. little softness in the consumer confidence, labor market indicators. That's similar to what we've been wondering about for a while. Breth is basically okay. Small caps are up. It's another half turn in the direction of the rate cut, broadening type trade.

And industrials are up. So if I go down the checklist and say, is this a healthy type move or is this something to be worried about, I would say cyclical leadership, global participation to the upside and other equity indexes, and steepening of the Treasury. yield curve, but in a very manageable range so far, I think is the rule. If I were looking for something to worry about, I don't know, Microsoft's down 10% in three months, I mean, three weeks. Tell me exactly what's going on there unless it's just coming off the boil.

And then, you know, some of the red hot stocks have started to cool a little bit along with parts of crypto, but it doesn't seem to be really undercutting risk appetites. And NVIDIA is holding this market in place. Well, you've got to ask you about that. You know, if you go down your checklist, right, the last thing on the list is what's tomorrow, and that's NVIDIA, and how all that plays into what happens from here. I wonder about the piling in. Look, we're about 1% from the highs in NVIDIA. The stock is a double from April 4th. I mean, it's a monster move.

It's added a couple of trillion in market cap in a hurry. So obviously, registering really good confidence about what the guide is going to look like, the revenue trajectory, it's all that matters. You have to add tens and hundreds of billions in revenue to Invidia over the next few years to underwrite where the stock's trading for right now. It seems comfortable with it 24 hours out. All right. Well, the markets have had this amazing ability to cut out a lot of noise and did it again today.

We're not going to have a new high on the S&T, but not that far either. And not that far off the highs for that matter for the Dow. I'll see you tomorrow into overtime.