Closing Bell - Major Rotation As Nasdaq Posts Largest Point Drop Ever 6/5/26

Episode Date: June 5, 2026

Stephanie Aliaga, Global Market Strategist at JPMorgan Asset Management, joins to assess the market backdrop and explain how investors should position as rates move higher and the AI trade takes a breather. Leslie Picker reports on new comments from Elon Musk during a SpaceX roadshow and the growing anticipation surrounding the company's future plans. The jobs market takes center stage next. Apollo Chief Economist Torsten Slok reacts to the latest employment data and explains what it means for growth, inflation and the Federal Reserve. Howard Silverblatt examines why the S&P 500's rules could keep SpaceX out of the index despite investor enthusiasm. Seema Mody reports on efforts by brokerages to give retail investors more ways to gain exposure to SpaceX. The episode also explores the sharp decline in crypto-related stocks and asks whether Bitcoin is finally finding a bottom or whether the crypto winter still has further to run. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell is bringing an end to the trading day at the NYSC Future Corp, bringing the bell and at the NASDAQ, Special Olympics USA Games, doing the honors. Welcome to closing bell overtime live from the Studio B at the NASDAQ market site. I'm Mike Santoli. Melissa Lee is off today. Stock sinking after a stronger than expected jobs report is more profit-taking hits chips and some other hot areas of the market. The Dow down nearly 700 points.

The S&P 500 down more than 2.5%. The NASDAQ, having its worst day in more than more than. a year, down 4% a rough ride for the Russell as well. Those weekly winning streaks for the S&P and the NASDAQ have been snapped. It is the NASDAQ's worst week since the April 2025 tariff tantrum. Also on our radar, Groundhog Day for Bitcoin, another big decline, more old levels being taken out. Will there be six more weeks or more of crypto winter? And the S&P index gatekeepers hold their ground and say they won't bend the rules for SpaceX. Plus a big event for Apple and Tim as his tenure as CEO comes to a close.

We're going to get to all of that, but we have to start with today's selling. Christina Portsneville is joining us now to run through some of the movers. Christina. Thanks, Mike. Well, you did see U.S. stocks selling off sharply, especially into the closed driven by tech today

as a violent unwinding chip stocks, as well as higher yields hit the market. So the Dow did slip, but it did hold up best after touching an intraday record earlier in the session. Tech, though, on the other hand, the epicenter, the XLK is seeing its worst day in over a year. AMD, super micro, micron, were all under pressure. Sandus, though, was the biggest lagger in the S&P 500 as the entire memory complex got hit.

Invidia, not immune either. Just over the past three months or so, the SOX, ETF, is up about 60%. But Nvidia is up just 12% in that stretch, one of the weaker performers. And then you also had meta lower today, too. Even after denying a report, it's considering a larger stock offering to fund AI, to what we've seen from Alphabet, that creating concerns in the market as a whole. But stepping back, many of today's losers, and this is important, like Intel, Marvell, Dell, I'm naming the tech ones, they're still up way over 70% year-to-date, suggesting this may be more

of a rotation than a fundamental break. You really see that rotation, though, in today's leaders. Consumer staples were higher with Walmart, Coca-Cola, you know, the usual. Procter and Gamble, all green on your screen, and a couple other names too bucking the trend, a server. Titan on earnings, and then FedEx Freight recently spun off. That name closing higher as well, up about 6%. Mike? Yeah, for sure, Christina, definitely not kind of an all-out washout of any sort. But interesting, you mentioned that some of the stocks up the most that clearly had the strongest earnings momentum were down the most. So crowded stocks, they have a pretty violent unwind. I'm interested in how broadcoms results seemed at least to be, you know, one of the final

straws on the camel's back to kind of bring the NASDAQ lower over the last couple of days. And whether that was a change of the story or just a reflection of how high expectations had got. Well, two points. Specifically on Wednesday, you did see a great discrepancy in the SOX ETF, the fact that it was trading, what, over 70% above its 200-day moving average. So that, you know, gap has been one of the higher ones we've seen it a long time. So you saw immediately some selling after that. You also saw the Broadcom earnings, which were relative So-so, but I think there was the concern of competition. There was the concern that these beats aren't to the magnitude of what everybody is used to with the likes of Dell HPE. So they

use that opportunity to start selling. And then some will say, hey, no, this is a funding opportunity. Broadcom, Nvidia, have constantly been used to fund other parts of the market. And perhaps with SpaceX next week, this is an excellent way to do so. Sell some of your broadcom so that you can buy into a big name next week. Well, we'll see if they do. Absolutely. Christina, thank you very much. Well, bond yields jumping after a big beat on the jobs report. Rick Santelli standing by in Chicago to go through all that. A very pronounced reaction, Rick, among the shorter maturities.

Oh, absolutely. And you nailed it. It's about the short maturities. Let's look at non-farm payrolls. Look at that bar chart. We now have an average over the last three months of 188,000 non-farm jobs. Look at average hourly earnings. A lot of talk about inflation getting embedded.

Earnings don't reflect that year-over-year earnings have been moving lower. And if you look at a two-year, as Mike just pointed out, short maturities, two-year took out its high at 412 from a couple of weeks ago, the post-conflict high. Now it's going to close at a 16-month-eye. But look at the 10-year. It's two-and-a-half week ago. High closed was 467. Didn't come anywhere near taking it out.

It is definitely a completely different. Look, yield curve flattened dramatically. And finally, the dollar index looks like it's going to close at a two-month high, Mike. A wild day in the markets. For sure. Yeah, there you go. The dollar index just above 100. So let's just decipher the message of that flattening yield curve, Rick.

So obviously you point out the factors that drive the 10-year yield. Oil has been a big issue. And then also, I guess, inflation expectations also have a role here. There's a line of thinking, hey, if the Fed's going to, not cut or even hike down the road, it's going to keep inflation in check. But what's your read on all that? You know, my read is that there isn't nervousness in the market, especially as a conflict goes on, about oil really metastasizing its inflation inside the economy.

I don't think we're there yet, and I think 10-year yields reflect that. But on the short end, one thing we know for sure, Mike, the labor market was dead and buried long before it actually died, and the resurrection is really taking all the steam out of that two-year because there is now no more easing in sight. And I think the two years making up some lost ground. I personally don't think the Fed is going to tighten this year. However, if we continue to see the tenure behave well, should the tenure start to get above four and three quarters,

then all bets are off. Yeah, obviously that would be kind of breaking the upside of the range. Rick, thank you very much. So is this slide in equities to start up something bigger or a natural pullback after a big run? With me now is Stephanie Aliaga. J.P. Morgan Asset Management, Global Market Strategist. Good to see you, Stephanie. Good to see you, too.

So, look, the market's feasted on some great earnings. We pretty much are through with that. Pretty much insatiable demand for semiconductors, AI hardware. All of that got into the market. What's your interpretation of exactly how we're seeing this pullback play out? Well, I think we have just had a ferocious rally this year, particularly around that hardware complex. I mean, as of yesterday's close, the semiconductor ETS, had essentially doubled year-to-date in the first five months of this year. A lot of that was around earnings, but it's also telling us, look, at these levels, the bar is really high. And that means that there's going to be that sensitivity in markets, especially when you have some uncertainties really percoling in the second half of the year.

What I don't, though, agree with is the reaction around this job support, as Rick Santoli was sharing, you know, I think good news can be good news. Yeah. You know, we saw a strengthening in the labor market, but we didn't see. affirming an inflation. And I think that means that the Fed does not have to take issue with what we're seeing in the jobs market right now because quits are lower than they have been 70% of the time on record, and there's no sign of wage inflation really affirming here. I guess one could argue that it isn't the markets taking it as bad news. It was essentially doing a heavy selling in the parts of the market that were going up a lot that had very little

to do with the domestic economy or the job market, right? I mean, the AI trade, has been independent of all those things. And now, I mean, consumer psychicals, they outperformed by a lot today. Banks did not get pounded today. So in other words, it wasn't a reaction as if the economy was in a tougher spot. It's much more about the market dynamics and how we've been capitalizing. No, absolutely. I mean, I think it's a short-term kind of digestion, right?

And investors looking at their portfolios and making sure that, look, they have some stability there for whatever may come. And I think that's good news. That's healthy, you know. And when it comes to all of the strength that we've seen, semis, I mean, it's natural for investors to start looking at other parts of this ecosystem here because this AI wave is much bigger than just the hardware component, and we're seeing opportunities really across the economy.

Well, yeah, I mean, semis got to about 19 percent weighting in the S&P 500. AI, in a pretty direct way, is probably half the index, right? So that explains some of today's movement. What are some of those areas that you think have not been kind of fully reflective of the AI opportunity then? Absolutely. Well, I was just reminding myself of this great report from Eric Mn Yolveson in 2002. They found that in the Internet era, okay, for every $1 that firm spent on computer hardware,

they spent $9 on complementary investments around retraining workers, around the software needed to embed the technology, reorienting workflows and designs. Now, it's not going to be the same one-to-nine ratio when it comes to AI, but we're in the very early innings of all of that other spend that companies need to do. And you're hearing that from them this year that they're expecting to increase the amount of AI spend per employee by 50% in the Atlanta Fed survey. And I don't know that all of that is really baked into market expectations just yet the need for AI software, right? And also a lot of these other kind of complementary investments around AI. It's hard to escape that all this is happening at a time when the amount of new stock that's going to be sold is growing beyond what we've ever seen before.

So obviously SpaceX IPO, but then alphabet secondary, all the rest of it. And whether it's causal or not, it's in the air that maybe this is a seller's market. How do you think about that and how should investors react to it? I think we should be buckled up for some volatility. Obviously, there's going to be some high-profile liquidity entering the market. However, I think when you take a step back and you remember that since 1990, the number of public market companies has essentially halved to 4,000, Meanwhile, there's been strong structural demand flowing into markets every day from people's 401K contributions, from massive passive inflows that are valuation agnostic for the most part, right?

And all of that still puts pretty good structural support for markets. And we think that we can ultimately digest this new issuance this year. Of course, there's going to be some volatility along the way. But so long as there's a reason to invest, you know, we think those inflows will be positive. We haven't mentioned Iran. It's amazing all week. like it's been kind of on simmer, not really development that worth, you know, kind of talking about as a market catalyst.

But how does that fit in? We're not out of the clear when it comes to this geopolitical situation, obviously. However, we do still think that we are on this de-escalatory path. The ball keeps getting moved a little farther and farther. But ultimately, look, the stock market is not the economy. And this economy is still quite insensitive, relatively speaking, to these energy prices. stocks, and you're seeing that resilience in a lot of the data that we've gotten lately. And we're down again today. Stephanie, good to talk to you. Thank you. All right. Well, is today's

sell-off? Let's get into it further. Simply a tactical reset or is the action sending a more worrisome, fundamental message? Joining me now is Eric Johnson, Canterford-Strell, Chief Equity and macro strategist. Eric, great to talk to you. I mean, we caught up a couple of weeks ago. You were here, and I know you were kind of longer-term, bullish on the market, but thinking that we needed some kind of a setback because of some overheating. So is that what's playing out in your view? It is. I mean, if you look at the setup, we were, the SOX index was a weekly RSI of 88.5. That was the second highest ever. The first highest was 89 in March of 2000. These levered ETFs, whether it's here in the U.S. or, you know, levered to some of the names in South Korea,

the asset center management have surged and, you know, call option buying has been very high. speculation was very high, very overbought markets. And so it was right for some piece of even small negative news to cause a reversion like we saw today. And so, you know, whether it was Avago, you know, yesterday, the anthropic blog post from yesterday. And then clearly the supply issue is out there. And we could talk more about that.

Yeah. And then you add it on to that what's going on in the rates market where, you know, today it was real yields that moved. And I think that was really the issue today, not just that yields were higher, but inflation expectations actually went down today. It was a deflationary day, but yields were higher, much higher. Yeah. You mentioned this anthropic blog post. This was about how the code seems to be able to kind of regenerate itself or develop further iterations of itself. I don't know if that gave people cause to have a big rethink about, you know, the pace of investment, or is it just that it feels as if the AI development store is just kind of

running away from our control? Yeah, I think it, you know, it came kind of out yesterday, and we saw, you know, even right after the close yesterday, semi starting to sell off. And so it was in, in reaction to that. I think it's one of those things where, you know, going in, I was thinking that it could be any sort of small thing that could trigger. And so I think in the scheme of, of markets, I don't think it's that big of a deal. But when you had the long exposure, you know, where it was, that's all you needed to kind of get things going. And it just speaks to, we are, you know, a one-trick pony right now, right? This economy is being driven by AI CAP-X and the picks and shovels are driving the S&P.

So it's all one theme. And so any sort of concern around any sort of change to that theme is going to cause selling. And so if that being the case, the market did attempt to rotate, right? Defensive stocks were up today, low volatility stocks were up as high beta was down. All that stuff worked. But it would seem as if that the overall index has no answer for further weakness in the AI. What would you be looking for to suggest that this pullback, this tactical reset, might be, you know, running its course?

So, you know, part of it is price. And today's, you know, reset was very helpful. I think from here over the coming weeks, I actually think it's going to be somewhat of a trader's market where we're going to churn. We probably haven't seen, you know, V-Lows for this weakness, but I think we probably have gotten through most of it. And there's a lot of things to, you know, to work through. We do have Micron earnings at the end of this month, month, which will clearly be a focus. And then, of course, you know, Warsh, his first meeting in the middle of the month. So I think the market would be focusing on that.

But I think churning here in the month of June is probably a more likely scenario. Yeah, we did just show you, by the way, the CBO close, ending the Options Trading Day in Chicago. So let's talk about this supply question, Eric. I mean, your clients preoccupied with it. Do you think that what we're seeing is essentially pre-selling ahead of SpaceX and these other deals? So the first thing I would say is that this is unprecedented. So, you know, I went back and I looked in the year 2000. you know, what was going on there in terms of IPOs as a percent of the capitalization

at that point versus what we're seeing now, not even close. So the first, you know, part of it is that we don't know what the actual, right, impact is going to be. S&P made some announcements, you know, last night around how they're going to handle it, which is going to be part of it. But I think, you know, if you kind of rewind a week ago, I don't think anyone expected did Google to be issuing equity. We got the Financial Times article today on Meta.

Who knows whether they do it, but financial times speculating that they may. And who else may come to the market? So I think that topic is now really coming to the surface around not just IPO supply, but just supply in general in order to fund this very large buildout. We're seeing all the benefits now of all those who sell into the build out, who are who are obviously their earnings are off the charts high. But of course, this has to be paid for. And that's what I think the market is going to be grappling with.

And there are a lot of unknowns as to how this is going to be handled by the market. Yeah, for sure. Real-time experiment. We'll watch it. Eric, thanks a lot. Appreciate you jumping on, Eric Johnston from Canter. Well, as we've been discussing, lots of factors contributing to today's big sell-off, including a much better-than-expected jobs report and the impact it may have on the Fed.

discuss that coming up on closing bell overtime live from the NASDAQ market sector. A stronger than expected jobs report sparking a sell-off in treasuries and decreasing the odds of a rate cut even more and contributing to today's market downturned in stocks. Joining me now on the move in rates and what today's numbers tell us about the economy is Apollo Global Management Chief economist Torsten Slok. Torsten, good to see you. Thanks, Mike. You've been leaning in the direction that the economy is in better shape, maybe with more momentum than many had believed. So this job support today, certainly better than the forecast,

you know, in itself, does it show, in fact, that we are now at a new run rate for job creation and economic growth? Yeah, because I do think that this is evidence of the tailwinds to the economy at the moment. It is not only the AI spending boom. Let's also not forget that we also have the one big billful bill that's playing out. The Congressional Budget Office estimates that that's adding about 1% is point of GDP growth this year. So now we suddenly have two engines of growth coming from both what's happening with, of course, the AI boom, but also with what's coming from the one big billful bill. And the other important aspect of this report is that this also puts to bed,

at least for now, some of these fears about displacement of labor because of AI, it's very clear that job growth is very strong in the initial phase of the buildout, both for data centers and energy associated with data centers. So at the early stages of this AI boom, we are, it is actually going to be more inflationary, which creates some problems for the Fed, because we're both seeing now, of course, more jobs being created, We're also, of course, seeing CAPEX, which is very strong.

We're, of course, also seeing that labor in the sectors that do construction of energy and data centers is also quite strong. So there's a number of different dimensions in this report that are actually rocking a bit in market narratives that we have had for quite some time. Yeah, I mean, at least forces the question of whether there are the makings of some kind of an overheat, right? I mean, if not outright overheat. We grew less than 2%, maybe real GDP in the first quarter. but nominal growth getting a new kick higher, and then what does the Fed do about that? Yeah, and this is really important because we all,

for the last three months, have been expecting that there was instead a stacflationary shock coming because of the Middle East. If you take your textbook out and all the prices go up, economic activity should go down and employment should go down, but we are exactly seeing the opposite of stackflation. We're actually seeing overheating because the shock from the Middle East is now being dominated by the AI boom

and by the one big beautiful bill. So that's exactly why this, Dancing between is a stiflation, is it overheating, is looking more like this is overheating in the sense that this is something that the Fed needs to worry more about. Do you think they will worry more about it? We know some of the members of the Fed will. But I wonder if the intentions of the new chair and the committees canceled themselves out and we just have to wait and see. Yeah, so we have 12 voting members on the FMC. One of them is Kevin Walsh, the other 11 members.

And one of them is, of course, Jay Powell, who is now staying on the committee. They clearly said at the last AFOMC meeting that they did not think it was a good idea to cut interest rates. And we had three of them at the last meeting say, well, now they think that you more have a neutral bias. So I think at this meeting,

we'll probably see them take away the easing bias. And then when we come to the July meeting, they may begin to have a hiking bias if the momentum continues. And that's, of course, where things become more complex because we have, of course,

a committee that has been leaning for several years towards no rates are going down, rates are going down. And maybe now, with the momentum coming from AI spending, from the one big rid of a bill. We also have upward pressure on inflation from tariffs. We also upward pressure on inflation from energy prices. And we also have upward pressure on

inflation because of the AI boom giving more boost, both two wages in those sectors that are benefiting from the AI boom, but also, generally speaking, from prices of equipment, semiconductors. So those three forces, tariffs and also, of course, energy prices and the AI boom, they are creating a much more complex challenge for the Fed where they now need to think about later this year, whether they maybe have to hike. Yeah. It's going to be an interesting. debate no matter what. Even though some folks were trying to maybe poke some holes in the numbers today, it felt like the bomb market took it to heart. So, Torsan, great to talk to you. Thank you so much.

Thank you. Appreciate it. All right, today's selloff coming a week ahead of the SpaceX IPO. Our investors selling their winners to get cash ready for the biggest IPO ever. Yeah, much more on overtime coming up. Welcome back to closing bell overtime live from the NASDAQ market site. Big losses for stocks today to dow down nearly 700 points. S&P 500 off more than 2.5%. The NASDAQ down 4%. And for the NASDAQ, it's the biggest one-day point loss. That's 1121 points. Only the second thousand point loss in the index is history. The air coming out of some of the hottest trades as well. The memory and other chip names we've been following on the way up, many of them losing more than 10% today. And remember the metals

mania we saw earlier this year, both gold and silver are now in the red for 2026. Now, For more on the sell-off, let's bring in John Kolova, C's macro risk advisors, chief technical strategist. John, it's great to grab you here. I mean, we spoke yesterday you were on and kind of on the lookout for some kind of a summer swoon, a little bit of a setback for the markets. How does today fit into that expectation? And what are you looking for from here out? Yeah, so absolutely. Thanks having back on, Mike. Yeah, so I do think the odds for the summer swoon have increased after today. So I said yesterday, if we break the 7,500, level on the S&P 500, that would be the first clue. And then if we wound up seeing follow through

underneath the 7300 area, then that would just be confirmation that a top of sorts is in. So I think, yeah, today was an important day in terms of that corrective process. And then looking forward, like I said, you break that 7300 on the S&P, I think at a minimum we'll come down and test the 50 day, which is somewhere around 770. But ultimately, I do think that whatever corrective process we have over the summer months will require a retest of the Q1 highs, which is somewhere closer to around 7,000. Okay, so that 7,300 area, that's kind of maybe the next potential trip wire. That's like Mays low, right? Last month's low point in the S&P 500. What did you see inside the market today in terms of where money attempted to go? I mean,

we did see some attempts at rotation. It was not an across-the-board sell-off. Is that something you take card in or you say that that's kind of, you know, that's kind of a loser's game. Yeah, it depends what side you want to be. I want to be a bull or bear, how you're looking at this thing. So objectively, yeah, the breadth statistics overall today weren't awful, like negative two to one, which isn't that bad. But the leadership groups were destroyed. I mean, the tech sector, I count around 95 percent. The tech sector was down. Same with energy. So pretty much the prior leaders, the momentum leaders, their breath was awful. So there was rotation. So there was rotation. like you said, underneath the surface, it was really towards defensives. So if there is a civil

lining, it would be that, right? Like, you know, the generals are falling, but the soldiers haven't really rolled over and gotten shot and killed yet. Yeah, that could, you can make that argument. But yeah, internals, it takes time, right? I think this is the domino that that starts. You take the leaders out. Now, what I think is important, and you were hitting on this in your early segment is that interest rates. I mean, a classic rebound today on the 10-year yield. I mean, it came right down to a critical support level on a yield basis and continue to push up higher. So I think that's a big part of whether or not we're going to see healthy rotation going forward. Yeah. And now you're thinking about all this, I think in the context of a relatively normal, you know, midterm election year kind of downturn in the middle section of the year and then some kind of a rebound later.

Yeah, absolutely. And I think that's the pattern that we have to play. I mean, this is still a secular market. I think the AI trade still has time to go. I mean, look, this is different than the 90s, right? They're earning supporting these moves. This is that here and the now, things got incredibly speculative, not just here in the States, but if you even look at the options, activity that was going on, even within Korea, 100 to 1 call-to-put ratio on SK Heinex, hey, that's very speculative.

That's not going to correct by going sideways. And then, you know, you take those names down. then you're going to want to take the semis down, which we did, which in turn is going to take the Q's down, which we did, and it's also going to bleed into the S&P 500. So it's going to have to deflate a little bit. But again, this is a secular market in midterm election years tend to have corrections and or bear markets. And when they do occur, you have to use them opportunistically. Just unfortunately, is that the perch that these leadership stocks were on right now was just so high that they're going to, there's a lot of air for them to come in before we, we gobble them all up,

so to speak. Yeah, for sure. I mean, Micron is like down 20% off its high. It barely looks like anything on the chart yet. So we'll see how that develops from here. John, really great to catch up. Thanks again. Thank you, John Klovis. Time now for a CNBC News update with Julia Borsten, Julia. Mike, President Trump today said he wants acting director of National Intelligence Bill Pulte to start the process of firing a large number of its staffers. The president, told the Wall Street Journal that he thinks the office, which oversees all of America's intelligence agencies, is, quote, unnecessary and or too big. A federal judge today ruled that the Trump

administration's travel ban on people from 39 countries unlawfully barred immigrants from receiving decisions on everything from asylum requests to green cards and citizenship. The judge ruled that the policy, quote, through the lives of countless immigrants living in the U.S. into indeterminate legal limbo and ordered processing of applicants to resume. And FIFA canceled World Cup tickets that were issued to about 60 fans for free because of a website error. FIFA says those tickets are still reserved and the fans can pay full price for them. It's the latest glitch in the World Cup ticketing process. New York and New Jersey are currently investigating FIFA for possible violations of consumer protection laws. Back over to you.

All right, Julia, thank you. Well, coming up, S&P standing its ground saying it will not change its rules to accelerate SpaceX's inclusion. We'll look at what it means for the market's ability to absorb this massive wave of equity supply. Plus, while the S&P Committee isn't making any move, the retail brokerages are. Those details are ahead. Welcome back. SpaceX is set to go public in just one week, but it won't be joining the S&P 500 anytime soon. The index decided that it will not change its rules to fast-track SpaceX's inclusion into S&M. indices. The move is in contrast to the NASDAQ, which announced changes to help the company

gain quicker entry to the NASDAQ 100. This comes as many are wondering if the market can absorb all this new supply and if we're seeing selling pressure as a result. Joining me now is Howard Silverblatt. He is, was senior index analyst for S&P Dow Jones indices for decades before retiring this January. And Howard, it's so great to have you on today. Give me your take. I mean, obviously, look, standard and pores, they're going to want to have. their big cap indexes, fully representative of the equity universe, but they also have these quality filters and liquidity considerations. So how do you think this decision went down? I think overall what they did was good. And I don't know if a fact that they probably had some

pressure to go the other way on this. The biggest change, of course, was that they didn't move on the gap earnings. Company has to have a positive quarterly earnings for the last quarter and for the last four quarters when they added together. That speaks to not just SpaceX, but the upcoming IPOs as well, as well as the time that may be necessary for something like SpaceX to get in there. The six-month component that they kept at one year, this once did seem a bit short, but the index appeared, the committee appeared to go with the idea of continuing the quality of the index, reducing volatility and uncertainty and risk. Of course, remember, it's an overall index on there and maintaining the entry level to get in. Again, the company has that positive gap earnings,

but there's a lot of companies once they get in that are not positive, and they stay there. That's right. Yes, exactly. It's just kind of the cost of entry initially. I know there are also sometimes liquidity considerations, right? Initially, SpaceX is only going to offer less than five percent of its equity value in a public float. Over time, that's going to increase in a relatively accelerated way. But, I mean, I remember a time when Berkshire Hathaway was not, you know, for many years in the S&P 500, I guess in part because the float was not considered large enough or the stock was not considered liquid enough. Amusingly sell Berkshire Hathaway. They needed an exemption because their gap earnings were not positive. So it was the same kind of situation. But yes, the float is a major

issue here. It's going to be a major issue, whether they will eventually put into the S&P 500 or the NASA, wherever you're going to go. It's 4.2% at this point in time, and that's a lot of share buying that's going to happen with few shares there. So you're going to have a lot of pressure there. It's going to come down to retail. 30% of the IPO is set for retail, and the question is, will there be enough shares out there for the coverage, or will it go back up the way you had it would service the almost three weeks ago? that they couldn't even open it. 185 opened up at 3.50.

Back down to about 210 today. I think it's under 200, actually. No, exactly. There's a stampede right for the opening print, and then it backed off pretty severely from there. You could feasibly have the same kind of situation here. People are following what must want to do. If some indices want to take it and say, I need this value in yet, even though I may not be able to get it to 135, reduces my risk.

because it makes it quantifiable know what you're doing at this point. But it also can go the other way that you don't have enough. I think there's enough liquidity out there definitely for this. I mean, we saw it today. Navidio is down $310 billion. The S&P 500 deployment numbers $1.6 trillion down today. That's enough to buy all SpaceX if Musk wants to get this 42% up. So there's liquidity out there.

The question is when it comes down to retail, how they're going to buy. they're going to go and the actual trades. Yeah, absolutely. Yeah. I mean, look, there's always there's always money for for something people want. And we'll see if that's the case for SpaceX at what price next week. Howard, really great to catch up with you, Howard Silverblatt for joining us there.

We've been talking about efforts by broker's firms to include retail investors in this monumental IPO. But there's some fine print. Sima Modi is here with the details. The retail component of this deal is very interesting, right? Mike, 30% allocation. That's expected to open the their door to many first-time traders who have not participated in IPOs in the past, and that's why brokerages are reinforcing their anti-flipping policy.

For Fidelity and Charles Schwab, there are some consequences if you attempt to sell SpaceX shares in the first 15 trading days that could result in being banned from participating in future IPOs. Now, for SOFI and Robin Hood, it's 30 days, so it's not necessarily a restriction, but a penalty. You can still sell if you want, but you could potentially be blocked from accessing other IPOs in the off wings like Anthropic and Open AI as the market waits for those. Question is, does this policy actually help instill more stability in SpaceX trading after it goes public next Friday, or does it put some smaller everyday investors at a disadvantage

fidelity? Also reducing the minimum amount of money required in an account to participate in the SpaceX deal from 100,000 to 2,000, so that IPO eligibility at the same time is going down. It shows how these firms, you know, they obviously have two sides of this trade to please, right? you do want to attract or serve your customers by saying, let's make it easier for you to get a piece of an IPO. It's a rare opportunity. On the other hand, the underwriters, they want to place it in relatively secure hands. This is always the case, by the way.

Underwriters, they'll go to institutional investors too, and they want to get them to commit to not flip the stock. The thing is, whoever doesn't get an allocation in the retail brokerages, maybe they want to buy it. They need to buy it from somebody, right? You actually have to have some people flipping it. Right. That makes sense. For every buy order, you see a sell order. I think it may perhaps also suggest that for any investor, depending on your allocation

or how much exposure you want to have to this one specific name, there needs to be an investment strategy you develop for not just the first day, but for the course of the month or two, you know, we've been studying the performance of other high-profile IPOs over the last 10 years. You know, those that see that big one-day pop. On average, they tend to underperform three to six months later. Of course, there are exceptions. No, that's a really good point. And I guess what it does is for a client of one of these firms, if you want to buy it,

make sure you want to own it for a month. I mean, it doesn't seem like a very high hurdle if you're buying a stock, but interesting how it's going to play out. Yeah, Seema, thank you. All right, ahead. Bitcoin hitting the lowest level since October 2024 today, trading below $60,000 as a number of factors collide to weigh on the industry. We'll dig into the move next. Plus, big moves lower for some of this year's biggest gainers, the memory stocks falling more than 8 percent, The semi-ETF posting its worst day since April 2025.

So do these sell-offs present an opportunity? Crypto is under pressure again today, with Bitcoin falling to its lowest level since October 2024, is down 19% this week alone. Crypto names like Coinbase Circle and Strategy down double digits on the week. So has Bitcoin found a bottom or is there more downside risk ahead? Joining us now is Jeffrey's head of digital assets research, Andrew Moss. Andrew, good to have you on here. I mean, I guess you have to have some theory of the case as to what's going on to decide

if the selling has worked its way through. So what do you think are the key factors causing the weakness? Yeah, Mike, thanks for having me on. So it's been a really tough eight months to be a crypto investor, as you were just pointing out, you know, Bitcoin's down big this week, but 50% from all-time high I've seen last year in October. But what's been driving price action is really a combination of cyclical health. headwinds and some of the geopolitical risk that is rising. So trading volumes remain depressed in May. Retail continues to fell into weakness. There is no dip buying. And we've seen significant Bitcoin

ETF net outflows over the last month and even over the last week. But again, in addition to those cyclical headwinds, you have rising geopolitical tensions in the Middle East. And you also have now concerns of rising rates. So I know everybody likes to refer to Bitcoin as a, you know, digital gold or store of value. But Bitcoin actually trades as a high beta risk asset. It's exposed to many of the same risk of tech stocks and equities more broadly. But Mike, one more point that I point out is that we've seen this story before, right? So Bitcoin underperform NASDAQ by 70% in 2018. It proceeded to outperform by several hundred percent. over the next three years. Same thing in 2022. Bitcoin underperformed, but it outperformed in

2023 and 2024 by 100%. Yes, there's no doubt about that. I do wonder, though, if this latest bout of weakness also comes as, you know, the crypto market got everything it wanted, right? I mean, a friendly administration, you got a lot of loosening of rules. It got into all these different ETFs and retirement funds and everything. And I wonder if there was no more positive catalyst to come along to carry it. Other risk, high beta risk assets have been flying, and Bitcoin has yet strategy selling. So I wonder if there's a longer-term crisis of faith happening with the story. Yeah, and that is a good point. The big difference between this correction and prior corrections is that during this correction, you've actually seen Bitcoin selling off while the

broader market has rallied. That's different than the past two corrections. We are still awaiting the clarity market structure bill. But to your point, I think that you've seen client focus really shift from Bitcoin to revenue-generating tokens that are powering blockchain operating systems in apps, application. So the best example there is going to be hyperliquid. A decentralized exchange generated $850 million in transaction fees from trading. It uses 97% to buy back and burn or remove from trade.

circulation, the Hike token. So token holders really have a claim on cash flow. The other place that investor focus is shifting is to the blockchain natives, circle, coin base, figure bullish, as well as the implications of tokenization across traditional sectors, banks, exchanges, asset managers, in tax and payments. Yeah, I guess it continues to evolve as it grows. Andrew, I'm going to have to leave it there, but really appreciate you coming on today. I'm breaking it down for us, Andrew Moss from Jeffries. Apple down less than 1% today, outperforming as it continues to act as a defensive trade within tech. It's got a big event next week, Tim Cook's last WWDC as CEO.

So what should we expect? Closing Bill Overtime live from the NASDAQ market side. It'll be right back. The NASDAQ posting its biggest drop in more than a year after getting hammered by a sell-off in chip names. And tech names in the hardware and communication equipment space were not spared of the pain sand disk. Western Digital, Seagate, and Cisco are among the biggest laggards in the NASDAQ 100 today. Joining us now is Amit Daryanani from Evercore ISI to kind of surf through the records a little bit here. Amid, what did you think was actually a trigger point today or what are investors starting to rethink, if anything,

or maybe this is just a little bit of a technical reset? You know, I'm going with this, this is a bit more for recent than anything else, but if I back into the events, right, I mean, you had Broadcom, one of the big chip companies reported numbers yesterday, the day for yesterday, stop didn't really live up post-the-print, AI numbers way good, but not good enough kind of thing, right? So I think that started a little bit of worry yesterday and some of the tech names until today with yields kind of picking up a little bit, I think just magnified those paint. I think it's a little bit of the macro-micro thing combined together.

that's holding the tech names and the AI names specifically. Yeah, I have to say it was preceded by the market looking a little bit over-eager in taking up things like HPE on its results, right? It felt as if maybe the space was kind of picked over and then we were getting the last of the beneficiaries there. So do you think after this little kind of one or two-day drop that the valuations are looking better or you still want to wait to see how it plays out? Yeah, our valuation is looking better, heavily depends on how you want to anchor these things, right?

On a historical basis, I would say you pick Dell, you pick HP, these are at the higher end of the valuation ranges, if not about a high-end period, right? So from a historical basis, you're still at the north of the high end of the valuation ranges now. If the discussion is going to start becoming that, hey, the AI spend, which has been dominated by hyperscalers, is starting to parlay into enterprises. So enterprise have to upgrade their network, their storage, that's survey, and everything else, you get AI ready. Then, Mike, this might be the start of a very different cycle that's more enterprise heavy. And in that case, you could see these stocks continue to work higher. But I think there's a little bit of jury that's out there, which is, is this truly the start of the enterprise AI cycle? Or did these stocks do well because they were able to pass on memory price increases, which would be a more transient thing than structural?

Right, exactly. And then that would mean that segment maybe is kind of over-earning in the short term. Let's get to Apple. Obviously, an outperformer. It's often the defensive quality name and a sell-off. What are you expecting to hear about their AI strategy on Monday? Yeah. This is Tim Cook's last WWDC, I think, officially. I'm sure to be around beyond that. But the expectation is heavily around Siri 2.0, Apple Intelligence, and what can they demo, right? what we expect out of them is an AI-enabled Siri. Others you'll get a new Siri app, just like the other apps you have, like chat GPT, Gemma, and so on.

And it will have context awareness. It will know what's going on in different apps and different data sets that you have, right? I think that will be the demo of it. It'll have a lot of cross-app integration. So it will know what your messages and what your emails look like potentially. That is our expectation that this will be Siri that finally works. The one last point I'll make under the hood, it is going to be Gemini Power. So I think the one reason you have faith that this will work out pretty well is Gemini is true and tested in the marketplace,

and Apple will use that as a way to build Siri 2.0. And just real quickly, is that general set of expectations that this one will be the one that works in the stock at this point? I think people are very afraid to bet against the demo. I think the nuance between the demo and if it really wants, work over time, but there's an expectation that what they'll showcase will be really, really good, and I don't want to bet against this narrative along with the fact that it's defensive. Invenously, the question will become September, where the foreign and the OS is officially out, does it all really work fallacy and efficiently, or do we have a repeat of what happened two years

or if you don't know where the demo was great, the product wasn't? Absolutely. We got, unfortunately, got to go, but that's a good reminder. I'm it really appreciated. I'm a Tari Anani. And it's going to do it for overtime. Fast money. begins right after this quick break.