Closing Bell - Trump Ramps Up Powell Pressure; Apple’s AI Moment 1/12/26

Episode Date: January 12, 2026

David Zervos of Jefferies digs into the news that the DOJ has opened a probe into Fed Chair Powell and the market reaction. Omar Aguilar, CEO and CIO of Schwab Asset Management, talks the broader market landscape. Steve Biggar of Argus talks a potential cap on credit card interest rates and bank earnings. Apple’s uneven start to the year and its push into AI, with Dan Ives of Wedbush explaining why this is a pivotal year for Tim Cook. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And that is the end of regulation, riskified, ringing the closing belt, the New York Stock Exchange, BlackRock, doing the honors at the NASDAQ. And happy Monday, everybody. It was a huge turnaround for the markets and your money today. Now, you look at the final numbers and you say, what's the big deal? The downed up being up just shy of 100 points. Not a big gain, but consider the index was down about 500 points at the lows of the day. The other major averages also higher, the NASDAQ higher, by about one quarter. Oh, the NASDAQ 100, by the way, adding Walmart to that index, Walmart shifting its listing to the NASDAQ. Consumer Staples, your market leaders today. Tech materials also higher. And despite some concern about gold and silver falling to begin the year, not the case today.

They both popped gold hitting another record and now over 4,600 per ounce. That is the first time ever. Silver, not to be outdone. Now above $85. $5. One year ago, silver sat at just $30 an ounce. If you own silver, you've minted gold. A rough day for the financials. President Trump is surprising a lot of investors and maybe no doubt a bunch of credit card executives by threatening to throw a cap on credit card interest rates. That cap would be just 10% well below what the current highest rate is. It is one that could impact many of those

points and those perk programs that you may love. MX shares that about 4%. We'll get much more on that and more all throughout the hour. Welcome to closing bell overtime, everybody. That is your scorecard on Wall Street. I am Brian Sullivan and the big story today, a criminal investigation into the Federal Reserve and its chair, Jerome Powell. Is this about building an office renovation or the end of Fed independence? David Zervos wants a candidate to replace Jerome Powell. He joins us with his thoughts. Over the past year, Alphabet, you heard Scott just talking about it, has been the Mag 7 winner.

While Apple has been a bit of a laggard, well, now Apple choosing Google's Gemini to power Siri, is this the right move to get Apple going in the AI race? And guess what? Earning season, it is just kicking off. Tomorrow, it's J.P. Morgan Chase. All the big banks out in the next couple of days will get you set up for all of those earnings. Seems hard to believe we're going to do it all in one hour, but we are. There is a lot to do on this Monday, so let's start right there.

Seema Modi, with more on the big moves in financials. Well, Brian, financials really stole the show as investors. Further debate, central bank independence, what earning seasons will begin. You just mentioned J.P. Morgan set to report tomorrow morning. Also in the news, President Trump calling for that 10% cap on credit card interest rates, potentially putting profits at stake, though analysts say this would record. Congress to get on board. Nonetheless, we saw American Express Capital One Synchrony Financial falling between 4 to 9 percent on the day. In retail, those holiday results from both

Abercrombie and Fitch and Urban Outfitters providing a somewhat cautious read on spending by teenage consumers that weighed on other names like Birkenstock and Gap falling by 1 to 2%. Walmart, as you mentioned, a standout following news that it would be added to the NASDAG 100 on January 20th and overall it was a positive day for technology led by a few names in software that lagged in 2025. We're talking about names like Oracle, Service Now and Corweaves see up 12% all of these names getting a positive mention by analysts at Goldman Sachs. They specifically see these names benefiting from the buildout of artificial intelligence infrastructure names to continue to watch, Brian. All right, see what a bit. Thank you very much. All right. Now let's move down south to D.C. in Congress

because some members are now pushing back against the Justice Department's investigation into Fed Chair Jerome Powell. Powell says he's being investigated for allegedly lying to Congress about the cost of renovations to rebuild the Washington headquarters of the Federal Reserve. In a rare Sunday video message, Powell saying he thinks the investigation is just a smokescreen and that the real reason he is being investigated is because he is not following the president's plan by more aggressively lowering interest. rates. Emily Wilkins on Capitol Hill. She's been speaking to lawmakers on both sides of the aisle today. And Emily, what are you hearing? Oh, Brian, I think some Republicans, some members definitely do agree with Powell's assessment there. And it's really notable, of course, because Republicans Trump's party are breaking with him on opening this criminal probe into Powell. At least one Republican is already moving to block anyone that the White House wants to nominate to the Fed until

the investigation is closed. Republican Senator Tom Tillis said in a statement that, quote, If there were any remaining doubt whether advisors within the Trump administration are actively pushing to end the independence of the Federal Reserve, there should now be none. It is now the independence and credibility of the Justice Department that are in question. And remember, Till's a member of the banking committee that oversees the Fed's nomination. And he added that he will oppose the confirmation of any nominee for the Fed, including upcoming Fed share vacancy, until this legal matter is fully resolved. And because of the math on that committee, if Tillis and all of the Democrats on the panel vote together, they can successfully halt any Fed nominees from the White House that Trump might put forward and prevent them from getting confirmed. You've also seen other Republicans on the panel, Kevin Kramer.

He called Powell a bad Fed chair, but then he added that he does not believe, however, that he is a criminal. And Kramer went on to say in a statement that he hopes this criminal investigation can be put to rest quickly. You also heard Senator Dave McCormick, another Republican on that panel, came out with a very similar statement saying he thought that Powell was not guilty. So now we're waiting to see if or how the White House might be responding to these concerns. Certainly we're going to have more members who are coming back to Congress this afternoon. And I think we can expect to maybe hear some more controversy on this over the rest of the week. Brian? So is it possible, Emily, despite all the noise, the heat, the light, the smoke, whatever, that this ends with a whimper?

Is it possible that there's an investigation and there's no further action? Is that something that is on the table? Brian, it does sound like, you know, these investigations can take on many different forms. They can end in many different ways. The messages that I'm hearing from Republicans is that they hope this investigation is done quickly, that it's closed quickly. I think you had her majority leader, John Thune, basically say, hey, if this is something, there better be something here and it better be something serious. I don't think most lawmakers are buying the idea that cost. overruns in a project is reason enough to press criminal charges against someone. You had Lisa Murkowski mentioned that these, hey, charges, projects run over cost all the time, that that's just not serious enough to do something like charge the head of the Fed.

Yeah, I'm going to break some news to everybody out there. If cost overruns in D.C. are a crime, then everybody's guilty. Emily Wilkins, thank you very much. All right, let's talk about all this with one of the most closely listened to Fed Watchers in the world. That is David Zervos. He is Chief Market Strategist at Jeffries. He is a CNBC contributor. He is currently in Washington, D.C.

He's somebody who knows Jerome Powell personally. And David, you and I can agree. I've been very vocal. I think the Fed screwed up. I think the kept rates way too low for too long. But that's irrelevant to this. I mean, what do you make about the DOJ's action against Jerome Powell and the Federal Reserve? Well, first of all, Brian, I'm not a legal expert.

I look at the building works and I am a little shocked at what was spent. It seems a little crazy. I'm not sure if there's a criminal investigation to be had out of it. That'll be up to the lawyers and the DOJ. But excuse me, if you look at the numbers, it is really an egregious amount of spending. So I guess we should learn about it as taxpayers. We'd like to know about it. And I think it makes some sense to dig a little bit more.

But, you know, a criminal investigation into the head of the Fed at this point. with this much sort of antagonism between the Fed and the administration is just probably not healthy. And it's not healthy when the president's looking to get his candidates confirmed through the Senate. I think that's the breaking news that you put there, which is that they're going to slow this process of adding a new Fed chair, adding a new governor, and what happens to the make-up of the committee as we go into May. It also may change Chair Powell's decisions on when he, decides to leave if he feels like the institution is being threatened. So I think there's a lot of moving parts here. The good news is, Brian, the markets really didn't care too much. Yeah, it was kind of

funny. They didn't, David. Why do you think that is? I mean, last night when the news came out and Jerome Powell putting out a very rare, I mean, I would say, I don't think I've ever seen anything like that before outside of maybe the subprime crisis where the Fed had to be sort of 24-7 putting out that statement. Markets are down. Indexes are down. Futures were down. we came back. Why do you think that is? Well, first of all, we weren't down that much. We were down maybe half a percent. I know, but it wasn't a big move, but it was down. The thesis, right? The thesis was, okay, credibility, okay, you know, is independence on the rocks or on the ropes again.

I think the markets just kind of become immune to this. I think they look at a lot of this as more theater than actual substance. They see this as ways to kind of push an agenda. And they probably think that this is not one of the most popular decisions that that all the folks inside of the White House, the cabinet, and on the Republican side are that excited about. So it's odds of really sticking and creating a major problem are probably pretty low. And the market is a discounting. You know, you know it's better than anyone, but the market's just discount things. And I think what they're doing is discounting this a lot.

And that's probably the right thing to do. So I don't feel the market made a mistake and all of that. And I think it'll be in the background. It'll probably go away sooner than you think. That's my guess. That was kind of my point to Emily, David, not to interrupt, was kind of like, is this possible? There's a lot of sort of investigation and a lot of people going on TV and sort of slamming fists about it. And then it just kind of fades away.

I mean, let's not forget that in the 1960s or early 70s, it would have been the 60s, Lyndon Johnson, then-President LBJ like physically pushed then Fed chair, William McChesdy, Martin Wall, screaming, I think, F-bombs at the guy. This idea of Fed independence is there. But let's be clear, presidents have done varying levels of aggression with the Fed throughout history. Have they not? It's not pretty. Absolutely right. I think that took place at his ranch in Texas, and he was upset that he had, you know, boys dying in Vietnam and that he didn't have the support of the Fed in funding that war. So, look, this goes way back. I think we can all agree that the Fed as an institution has questionable independence on both sides, whether there was political maneuvering

that was working against the administration or whether the administration is actually trying to get political jockeying to move in its favor. That's just the nature of Washington, Brian. That's what we live in. We live in a city here, or we live in a country with a city here that is about politics. And the Fed sits in this city and it has political biases. And I think maybe this administration's trying to exercise some of those ones that it sees against it, and put in ones that it would like for it. But you're never going to get rid of them. This has always been a point of mind. You're just not going to get rid of them. The Fed chair is appointed by a president and confirmed by a Congress. It is inherently in some

ways political. What I do like is that Jerome Powell, who's a nice, you know him. I do not. By all accounts, a very nice guy pushing back. He's punching back. He came out with his video message. He's saying this is garbage, basically. and saying there's other motives here. This is an aggression, I think, by Jerome Powell that we have not seen in a long time. Like it or not, does it influence how they think about the Fed? Is it possible the Fed now goes the other way because they're just like, you know what, President, you want lower rates?

Forget about it. I don't really think that happens. I think this was an ad hominem directed attack with a Department of Justice move. he's used to the ad hominem. He doesn't rise up to the battle. He gets asked about it in every press conference. What do you think about what the president said here? He's been called every name in the book from silly to bonehead to stupid to incompetent. And he doesn't respond. He just, he's stayed above that fray. And I think when you start to throw the criminal justice system at him, he's going to step up like anybody and say, you know what, that's enough. I'm here and

I don't like it. And I think I'm going to have to defend myself. And I think that's what we saw on that video and probably that's a good thing and look look let's see brian you said this in your opening segment you know if if overspending and grift were a real crime in washington dc we would be going after every department and every department head um you know toilet bowls that that cost a thousand dollars at the defense department all that stuff that we've heard about which by the way hasn't been audited in 10 years or had a clean audit i like those toilet bowls they're very solid, very, I hear they, they can withstand a bomb. You know, but, but I just, I think this one, this one does, if you kind of dig into it and you look at sort of what they spent per square foot at something like 5,000 a square foot to redo a building, it does seem like a pretty crazy number.

And somebody should probably answer for that. That is taxpayer money. And I think we all are justified in going after, you know, things that look egregious are wastes of taxpayer dollars. We're doing that in Minnesota. We're doing that in other places. And I think that's fair. So let's have a fair and open discussion about this, what happened here, and move on and try to keep it out of the monetary policy world, which I think is the right thing to do. And I think that's what the market expects. And I have a feeling it will just move on.

And next time we have you on, David, we'll talk about monetary policy. But this is the headline for today. David Zervos. Enjoy. By the way, Washington, D.C., I shall be there later tonight, subject to the whims. of Amtrak. David, thank you very much. See you soon, Brian. All right. We've got a news alert on OpenAI.

Kate Rooney, good to see you. What's going on at OpenAI? Great to see you, Brian. So we got some deal news. OpenAI is making another push into health care. They're acquiring a startup called Torch, which helps pull together consumer medical data. So think of things like lab results, medications, for example. The AI giant says it's going to really integrate this into chat, GPT, Health. That's a version of the chat bot that was announced last week to help people manage health information, Open AI, says the data is going to be handled separately. It's not going to be used to train some of its models, which has been a key question. Financial terms in this deal not

disclosed. Some are reporting around $100 million, but the deal does underscore Brian how aggressively open AI and others are really looking to take this technology into some of the high stakes, profitable areas like health care. It has also been a key focus for CEO Sam Altman, from what I hear on here. And there has been a lot of buzz around this AI theme and health care during JPMorgan's conference, all about that this week. Back over to you. Kate Rooney on Open AI, Kate, thank you very much. All right, meantime, shares of American Express and Visa among the biggest drags on the Dow today, this after President Trump aiming to impose a cap on credit card interest rates.

Can he even do that? The Dow managing to shake that off, though, and shake off that Fed controversy we just talked about. So we've returned to Teflon markets, which are headed back to record highs. We'll talk more about it. And what may rattle the cage a little bit on these markets? That's next. All right, some big gains, more big gains for gold and silver today. New record highs for both.

Pippa Stevens here on set with moves in the medal. These are big moves again, Pippa. Yeah, so it's another day, another record is really the story right now for the medals. And of course, today it's all around fears around the Federal Reserve's independence, which is pushing investors into safe haven assets. It's the latest tailwind with geopolitical turmoil, including in Venezuela and Iran, also supporting precious metals. Gold is now on track for its seventh straight month of gains for the first time since at least 1974, pushing the gold mining stocks, ticker GDX, to record levels.

Now, looking under the hood, over the last year, Agnico, Anglo, Wheaton, Precious Metals, and Goldfields are the most correlated with moves in the commodity, meaning they could be names to watch if the gold run keeps ongoing. And despite silver's huge gain in the last year, a city just now hiking its target to $100 per ounce, saying investment momentum, remain strong alongside ongoing physical market shortages. The silver miners also hitting a record with Fresnillo and Hecla among the names that are moving higher, Brian.

Anybody you're reading or talking to that's saying this is doomed or? A lot of these people. There's a rebalancing and stuff like this you reported on. Anybody out there on the other side of this trade? Yeah, so there are a lot of people now saying that the precious metals and industrial metals even are looking more like momentum trades. And that's not really something you ever associate a thing like copper with. But then you look at copper, it's up 20% or so in the last three months.

And, you know, you've reported on metals widely. That is an enormous move for something like copper in such a short. Like they turned into Nvidia or something? Exactly. Like the traders have just gone from Wall Street bets to whatever to metals? Yeah, and we've seen that in silver. We've seen a lot of retail investors get involved there. There's been chatter on Wall Street bets in that whole movement.

But we've also seen stockpiling ahead of the possible tariff. So the 232 investigation, that's ongoing. So things like copper and silver, they could be subject to that. So traders are bringing it into the U.S. sitting in warehouses, once we get clarity there. So it's possible the Supreme Court ruling, whenever that does come, a Supreme Court, if you're listening, we'd like the ruling, that could impact the medals. So this is different.

So this is the 232. So this is about national security. So that could be implemented. There was a Department of Commerce Investigation, and then Donald Trump, President Trump, will decide whether or not to implement those tariffs. So that could happen regardless of what the Supreme Court rules on EPA. So let me to watch there, because if there are no tariffs, then we could see a big decline in copper and silver,

given that a lot of that demand has been pulled forward. and warehouse levels are now at record highs in the U.S. EPA 232. I can't keep it clear. You clearly can. Pippa Stevens, thank you very much. Good stuff. All right. So, folks, as mentioned, there may be turmoil at the Federal Reserve,

but that did not stop the S&P 500 from closing at record highs. It's just under 7,000. But even the hottest markets carry risks. So what are some of the big risks out there right now? Joining us now, Omar Aguilar. He is Schwab Asset Management. And he joins us now. Omar, you just heard Pippa talking about the metals and some of the risks to the metals.

There are also risks to the stock market. It's a bull market. We know that. But what are some of those risks that your clients should be mindful of right now? Yes, Brian. Yeah, the market started the year strong. There is a lot of reasons why people seem to be cautiously optimistic. That's what we continue to work with our clients.

But you're right. there are quite a bit of risk that we've got to be mindful of. I would probably say that starting with geopolitics, you know, that is how we started the year. But geopolitical risks usually tend to have a significant amount of influence on, you know, short-term volatility that obviously, you know, impacts the way that markets trade. And therefore, you know, our advice to clients is to continue to focus on the long term and try to reduce the emphasis on the short term. You know, the second piece, you know, has to do, which what we, is probably the highest risk this year, which is credit. I think we have all discussed the ability

of that incredibly growth of AI spending and capital expenditures for the majority of companies beyond technology is set to expand, but there is a funding need for those CAPEX expansions that tends to be going to the private markets. And I think what we believe is while the credit market has been fairly stable, there's going to be something for us to be watching over the course of the year. And lastly, you know, consumer confidence in lieu of all the headlines on all this significant challenge to see throughout the year, whether it's inflation news, whether it's political news, whether it's midterm elections, whether it's everything that has to do with the way that we operate in this economy, you know, the consumer confidence usually tends to take a

little bit of a breather when there's a lot of that. That tariff, and I don't want to put you too far down the political mindset, but I would never want to do that to anybody, Omar. I get it. But that Supreme Court tariff ruling is a big deal, not just for tariffs, but some would suggest for the markets, because that removes hundreds of billions in revenue that the bond market may be counting on. You take those away. The bond market shifts. That impacts the stock market. Are you guys watching that closely? Oh, we're definitely watching the ruling. You know, anything that may happen, you know, these week in terms of the ruling, either way, will obviously have impact on markets. And you're right.

you know, depending on the way that this goes, these may have a reverse effect on some of the bond market and equity market, where some of those things will have to repay back. Some of those things will actually have effects in market, which what we anticipate is regarding of that, there will be volatility in both markets at the end of this week and early into next week. Omar Aguilar, Schwab asset management. Omar, real pleasure to have you on. Good to see you. Have a great week. Thank you. You too.

All right, folks. We noted at the top, the markets, your money, hitting record highs today. The Dow, just a few hundred points under 50,000. The S&P, 23 points away from 7,000. Up next, Mike will be back to look at some other charts, which are nearing key levels. You're watching or listening to Overtime, and we'll be right back. All right, welcome back to Overtime. What do the equal-weighted S&P 500, the 10-year yield, and the travel

and leisure ETF all have in common. It's not a joke. It's three charts we're looking at, and we've got three different key tests hovering a potential inflection points. Senior Markets commentator Michael Santoli has more on these moves. Mike. Yeah, Brian, thanks for letting me off the hook. I didn't have a punchline for that one if it was a joke set up. But interesting, potentially consequential levels here. You mentioned the S&P 500 heading for 7,000, the Dow bumping up against 50,000. I might be the only one looking at the 8,000 level. on the S&P equal weight index, which is where we are right now. In fact, got above there on Friday, but it is a picture of this broadening trend in the market

that everybody's been calling for, everyone's been wishing for, and it's finally kicking in at least for now. Now, any period of time going back beyond three months and the equal weight is still trailing the market cap weighted S&P, but starting to try a catch-up move. Now, take a look at the 10-year Treasury yield. It has, again, bumped against a 4.2 percent level as recently as this morning, and a lot of folks pointing out that that could actually be important. It was an important low that it bounced off of a few times earlier this year, and even if you go back a couple of years. And it's been trapped

below that for months, especially since the Fed started resume rate cuts in September. So it could mean a little bit of uplift on the longer end of the yield curve that maybe give equity some pause. It didn't really happen today. So that's probably one of the reasons we were able to rally in the stock market. Take a look at the PEJ. This is the Travel and Leisure ETF, pretty much at the heart of what's strong within the consumer. And it's just trying to get above those highs from August. So keep an eye on that again. One of those consumer discretionary tells that might give us a clue for whether we get this reacceleration in consumer activity so many are expecting, Brian. Yeah, no punchline on that one, the PBNJ with the ETA. You didn't find that hilarious?

It's PEJ though. Oh, you're looking at the P, not the PBJ, but that's close. Food stock ETF, yes. Of course it is. Which makes a lot of sense. PEJ, PBJ, Mike Santoli, thank you. You're A-O-K. Time now for a CNBC News update. Back to Kate Rooney, Kate. Hey, Brian. So the White House is considering possible nuclear talks with Iran as President Trump weighs fresh military strikes. The Wall Street Journal reports some senior aides led by Vice President J.D. Vance are urging diplomacy before any retaliation over Iran's crackdown on protesters. The White House says all options remain on the table, including air strikes.

A federal judge, meanwhile, granted an injunction this afternoon allowing, rather, Danish energy, company Orsted to resume construction on an offshore wind project off the coast of Rhode Island. The interior department suspended the work in December, citing national security concerns. Orsted has said that project, it's about 87% complete and is expected to begin generating power this year. And finally, Brooks Kepka is going to be returning to the PGA tour following a three and a half year stint with LiveGolf, but it's going to cost him. He has to pay a $5 million charity donation, lose PGA equity grants for five years, and for

FedEx Cup bonus money in 2026. He also cannot play signature events until he earns his way in. Officials say the total loss could top $50 million. Brian, back over to you. Kind of weird there. By the way, we asked Interior Secretary Doug Bergman about the wind farms. He referenced some national security stuff. We'll see if that win gets appealed again. Kate Rooney, thank you.

I know. You had a big week, Brian. It's only Monday. Kate Rooney, thank you. All right, it is a big week already for the financials. because they've started off largely on the wrong foot. Some of the big credit card names, hurt by the president's conversation or discussion,

that he would cap interest rates on your credit card at 10%. It probably sounds good to you if you own credit cards and have debt, but the big bank stocks, not so much. We'll talk more about all that coming up. You're watching overtime. Stick around. Well, welcome back to overtime. The Dow closed up 86 points today. Not a very big gain, but maybe,

more meaningful for a couple of reasons. Number one, it means the market shook off some potentially negative news about the Federal Reserve Chair and Trump and an investigation. Number two, it is now closing in on 50,000, so 49590. The S&P 500 and Russell 2000, both also closing at record levels. The S&P closing in on 7,000. We like nice round numbers. Some of the major underperformers today wasn't all good with the credit card names, synchrony financial, Capital One, American Express, Visa, all down after President Trump called for a credit card cap of 10%. Joining us now is Stephen Bigger from Argus. Stephen, nothing's happened yet. It's again just kind of one of these things the president has said. Any way to analyze this from a stock perspective?

Well, hi, Brian. Sure. I think the, you know, it doesn't come. entirely out of left field, right? Candidate Trump had proposed this in his campaign last year, and there was actually some legislation proposed earlier this year by Senators Sanders and Hawley just shortly after the inauguration. So it's not completely by surprise, but, you know, the issue for me is that when you mess with banks' ability to price risk and only adjust that one part of the equation, the interest rate, bad things tend to happen, right? Whether it's removal of credit availability, which is a very much a disservice to consumers where you put extra risk in the system for not being able

to cover the credit costs. In cases of home lending, on the pre-financial crisis area, you make loans too easy to get in fuel speculation, bubbles, and then a collapse in the very asset you're trying to help. So, you know, where you move lending to less regulated areas. So I think it's really important to be careful here. Guard rails are important, but you know, over-regulation can be just as detrimental as under a poor regulation. Did the market then overreact today? Well, no, I think there's still some headline risk. And, you know, the company's most affected, the capital ones, synchronies, and even

Amex, to some extent, you know, do have the exposure. And I think until we get some clarity on the timing of this, and, you know, I think the industry is going to, of course, push back very hard on this. talk about that potential for less credit availability and, you know, their need to make a profit and so forth. I think banks have, and the pure play credit card companies have some things they can do, you know, to get more efficient, to price risk a little bit better in the credit card market. It's almost the one-size-fits-all, so if you have better credit quality, a better credit score, you get a lower interest rate and so forth. But look, the industry has, and regular

has done a lot to try to educate consumers on this notion, right? They talked about how long it will take back to if you're paying only at the minimum amount, what the total financing costs would be. All this has been added to statements due to regulation. And consumers, you know, it's a pretty inefficient form of lending, but consumers still go there. I read something where if this were to happen, and again, huge if, I know that, that it would, that it could damage or kill or change all the perks, all the stuff that, you know, the TV commercials try to sell us on airport lounge access and all that stuff that that's paid for by lower income borrowers because it kind of goes into the pot. Is that a big risk to an American Express or a Capital One that I'm guessing make a large part of their customer base on some of the things, hotel points and whatever, they're able to offer back?

Well, rewards are incredibly important for consumers at this point, right? And we see that the consumers have shifted an awful lot of spending towards credit cards because of that, because of the safety, the convenience, and the rewards activity. So to the extent you discourage that, if banks are going to, again, pull in their credit availability, and the fact that these are costly to the credit card companies and the banks, they could pull back on those reward programs. And that's another way that they could sort of help on the expense side if something like this does get implemented.

Stephen Bigger of August, look at the names. We'll see what happens tomorrow. Maybe they bounce right back, or I guess tomorrow is today in the stock market. Stephen, either way, thank you very much. All right, still ahead. He is here in the House. Wed Bush, Dan Ives on whether this could be a make or break year for Apple's AI ambitions and whether that company's new partnership with Google is the right move.

Dan, in the House. And he's here next. All right, welcome back, Moderna, one of the big decliners in the S&P 500 today, despite saying that 2025 revenue will come in above the midpoint of previous guidance. That's stock under pressure because investors do remain concerned about Moderna's cash break-even outlook. Staying in health care, shares of biotech from France, Abovax, rallying. That's on a report that Eli Lilly could make an acquisition offer worth nearly $18 billion. Any deal, and it hasn't happened yet, but any deal would expand Lilly's European footprint

and give it access to Abovax's experimenter ulcerative colitis drug. Apple, choosing Google's Gemini to run its AI-powered products like Siri. And up next, Dan I, was talking about why this. This could be just what Apple needs to get that AI strategy going. Stick around. As America celebrates its 250th anniversary, CNBC spotlights the business leaders who forged American industry and an extraordinary legacy of philanthropy. John D. Rockefeller Sr. was a Titan.

He built America during the Industrial Revolution and helped together with others, create the modern country we have. In doing so, he, of course, went from being someone who came from modest resources to the world's wealthiest individual and decided he would use that wealth to give back to society and help shape a future that was hopeful and optimistic,

not just for the winners of that age, but for everybody. The Rockefeller Foundation was established more than 100 years ago. We were founded to do scientific philosophy, because John D. Rockefeller believed that science applied to health, agriculture, energy, and even social sciences applied to governance could really help transform society and make it an environment where everyone flourishes, not just the select few. The very first big project the foundation took on was eradicating hookworm in the American

South. They in fact successfully eradicated hookworm, went on to tackle malaria, and that process created both huge successes in modern public health, but also ceded the American public health system in county by county across this country and presented the antecedents of the Centers for Disease Control based in Atlanta. We focused today on bringing science, innovation, and partnership to lift up vulnerable populations across the planet. To me, what really propelled America's rise over the last 250 years has been innovation

and inclusion because a long time ago, we created a nation based on the basic idea that everyone matters. Let's talk about Apple and Alphabet, because Apple is teaming up with Google's Gemini to drive its AI push, including a big Siri upgrade expected this year. Your next guest believes this deal could be exactly what Apple needs to prove itself. Joining us, Wed Bush Security's Global Head of Tech Research, Dan Ives. Dan, welcome. Yeah, there you go.

just falls off. That's kind of like all the estimates that Google was toast from AI. They just fell off the table. I love that. What did people get wrong about the alphabet story? Look, I think if you go back a year ago,

I mean, New York City cab driver was barish on Google. I think it was the view, first off, D.O.J. was ultimately going to win that case, and obviously Google won. But I think the biggest thing is that AI, the view AI was going to really ruin search.

It was going to be the huge, Yeah, you would never search Google again. Where am I eating? You would just AI it over. Google's toast. The exact opposite has happened. And that's why, look, now they're in the driver's seat. And when you think about where they are,

I mean, we believe it's actually just the beginning for Google what they're doing. But it also speaks why for Apple, they need to do the candlelight dinner, you know, between Sundar and Cook. Because the only way Apple's, in my opinion, the watershed moment is ultimately Google. next series, that's going to be what I believe. The consumer AI revolution ultimately goes to Apple and Google. There's a guy named Elon Musk. I don't know if you heard of him.

I heard of him. Yeah, he's done okay in business. And he ex-tweeted out today that basically Alphabet, Google, and Apple teaming up maybe a little bit too close for comfort. He says, it seems like an unreasonable concentration of power for Google, given that they, meaning Google, also have Android, the operating system, and Chrome. I could make the case why he's saying that. You've got Android and Google on a phone and the other operating systems Apple.

Now they're coming together. Are you worried about that? Look, I mean, it speaks to the point. Like that DOJ, by Google winning that case, that was significant because now Apple and Google really partner up. And look, I get what Musk is saying, but the reality is stronger and it gets stronger. And when you look where Apple is, they need to go with Google. obviously AI has been a huge disappointment for them. You look what Gemini is built.

I mean, this is now what we're seeing. This AI arms race that's playing out. Google went from bottom of the mountain to now at the top relative to what we're seeing with Gemma. Yeah, but do you think that regulators, and I'm asking you obviously to editorialize and speculate, which is what we do, why not? Of course.

That when this happens and integrates in this new Syria upgrade that we referred to, that regulators are going to come back and saying, this is too much. Google in an Apple phone, you got all the things. Yeah. And I think that's why when once Google won that DOJ suit, big tech, you're a car guy. They got the engines ready, gasoline, left lane, 100 miles an hour, recognizing now is the time to do strategic partnerships like this,

to do acquisitions. And I think that's what we're going to see in next few years. But it's kind of weird. Why would I guess, and Sundar Prachai could answer this a lot better, why would Alphabet do this? Why would they want to make Apple products better when they have their own massively competing product? Sure.

Or do they just not care? They just want to be everywhere. There is about 2.4 billion reasons, 2.4 billion iOS devices, and about 1.5 billion reasons on the iPhone why they want to do this. Because for them, this is going to give them the opportunity

to monetize within that install base. For Apple, they need Google relative to just the LOM, what's going to be ultimately a support. subscription model. So both companies need each other. And I think they finally recognize, but the reality is, this never was going to be able to happen without that D or J win. But you go back to Apple on AI, they've been on a treadmill at 2.0 speed, right? They've been nowhere. Finally, clock struck midnight. You've seen the changes internally at Apple relative to new leaders coming in. Now with Google.

Look, I think $75 to $100 per share upside. I view it, Brian, I think Apple in 2026 is, what Google was in 2025 relative to what stock did. Well, a lot of people got it wrong. You were not one of them. You got it right. Dan Ives, we really appreciate it. Great to be here. Cutting a little bit short because, folks, we got some big breaking news on Iran.

President Trump, minutes ago, posting on true social, saying that effective immediately, any country doing business with Iran will pay a tariff of 25% on any and all business being done with the United States of America. this order is final and conclusive. Okay. Why is this relevant? The biggest partner in trade with Iran is China. We certainly don't buy any products from Iran.

It's doubtful they buy many of ours. But Iran sells a ton of stuff billions a year in oil to China. So is what President Trump saying, China will face a new 25% tariff because it does. does business with Iran, if that's the case, will that impact the hundreds of billions of dollars in goods and products that are coming in from China to the United States, i.e. what you pay. We don't know. The true social post just coming out, 25% tariffs on any country that does business with Iran. Those countries really going to be Russia. You don't care about that. We don't do business with them.

but China, you do. Crude oil up a little bit. I would say ETFs to look at the FXI, crane shares, IWeb, anything that has to do with China might be moving tomorrow or in the aftermarket. We shall see that just coming out. All right. Up next, Michael Santoli, dig in, digs in to the earnings expectations in fourth quarter numbers and what you are looking for. That's next. It's early and at least on paper earnings estimates for this year. held up, but there may be a little more is always under that market hood. Mike Santoli is back. Look at that. Mike. Yeah, it's been a pretty good trend, Brian. I mean, even for the last six months, the estimates for 2026 consensus for the S&P 500 have been on the rise. Just a little bit of a jag lower here. That's not unusual as you get toward reporting season and maybe expectations get

reset. The bar comes down. Companies on a routine basis will surpass it. This places the forward estimate for this year's earnings on the S&P 500, a little bit over 22 times. So you do need earnings groups to come in to substantiate that. City is pointing out that there might be a little bit of room cushion in there in these estimates in the form of tax rates, just a small bit, but basically making the case that analysts have not fully updated their 2026 earnings models to account for potentially lower tax rates as we got through the bill from the middle of last year. You see, this is 2025 where tax rates are coming out for the median company, and they're not yet down there for 2026. The argument being there may be $10, 20, 30 billion

in pre-tax income that falls to the bottom line that's not accounted for yet. Just one of the ways that we might be able to look for a little bit of upside to earnings estimates. Where does roughly, Mike, I don't want to put you on the spot. Where does that roughly put the multiple for the S&P 500? Just over 22 times. And so that historically is on the higher end, but it's not egregious. higher end, we've been up at these levels. And I think that what investors are kind of leaning on is the history that says, even when the market's expensive, if earnings are still growing and the Fed is likely or at least possibly going to be cutting rates, it's hard to see there

being really a reckoning on the PE. Yeah, and we look at that number. And I would imagine, is it all about tech or just mostly about tech? It's still largely about tech, but by the end of this year, supposed to be decreasingly about tech. In other words, the earnings growth is supposed to kind of broaden out to other sectors. That's been said before. It keeps getting pushed up, but mostly getting pushed out because tech earnings estimates keep going up.

But they're burning all their free cash. So I think it's going to be interesting to see how tech trades off those numbers this year. All right. Tech is not everything, but it's most of the things. Mike Santoli, as are you, my friend, Mike. Thank you very much. Folks, that does it for overtime.

Thank you very much for watching. Fast money and that whole team hitting the markets right now.