Power Lunch - Key Market Tests Ahead, Brent Breaks Below $90, New OpenAI Chips 8/25/26

Episode Date: August 25, 2026

Equities are slightly higher on Tuesday as a semiconductor rally is lifting stocks, and treasury yields are falling for the second day in a row.  Contessa Brewer and Brian Sullivan are joined on set by MJP Wealth Advisors’ Brian Vendig and Matrix Asset Advisors’ David Katz to break down the anticipated mega-cap tech earnings, ongoing global trade tensions, and upcoming Jackson Hole Symposium. Dan Pickering from Pickering Energy Partners also joins the show to discuss the latest headlines from the Middle East as crude oil prices fall on reports that Iran and Oman are negotiating a joint shipping corridor through the Strait of Hormuz. Later on, the anchors speak with CNBC’s Kate Rooney who reports on OpenAI’s claims that its new semiconductor chips can outperform Nvidia processors as the mega-cap private company prepares a potential IPO for 2027.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The trade war may escalate, but stocks in your money getting some relief, at least for now. Welcome to Power Lunch, everybody. I am Brian alongside Katessa. Kelly is off today. Oil down, Iran de-escalating a bit, and bond yields coming down as well with it. Like we said, at least for now, will make sense of the setup today. We're looking at a real test here for the market, and it may be the AI trade. Invidia's higher today on pace to snap a seven-day losing streak.

It's lifting the chip space with it. So is this a reset in the AI round? or just pause before the next big test. We have it all covered. And we begin with a one-two punch that could shake up the markets and your money. First, Nvidia. The company, many see as the most important stock in the market

reports after the bell tomorrow with expectations running sky high. And then all roads lead to Jackson Hole where Fed Chair Kevin Warsh is set to speak Friday. Investors will listen for any clues on the path for rates. So what should you expect? Joining us now is MJP Wealth Advisor, CIO Brian Bendig, and Matrix Asset Advisor, CIO, David Katz.

Gentlemen, good to see you here today. All right, let's first talk a little bit about NVIDIA and the fact that OpenAI now says it has infrastructure that could put NVIDIA to shame. Is this real and will it affect earnings tomorrow? I think we've got to pay attention to earnings contests, like you said, because NVIDIA is 7% of the overall S&P earnings power. And I think that outlook and the comments,

from Jensen Wong, you know, based on those headlines is really what investors are paying attention to. If you look at where the stock is actually trading today, even though it's bounced back a little bit after that seven-day decline, worse we've seen, obviously, in a couple of years, it's really back to the same levels we've seen in May, contestant Brian. And so as a result, when you look at that, the follow-through over the next month is usually down, but historically has been up off of that. And I think it's because we're looking at that spending level for next year in AI. And investors are going to focus on the outlook. You're really focused on looking for quality laggards in this group.

Like who? A company like Qualcomm has not done a whole heck of a lot. We think it's a very good business. You have a two to three-year time rise in at about 14 times earnings. TE connectivity is another electronics company, chip manufacturer. It's growing at about 15, 16 percent a year, yet it's at about 15 times earnings. So those are really good businesses, very attractive prices. We never talk about T.E. Connectivity.

I don't think, David, we've ever talked about T.E. Connectivity on this program ever. The Dublin-based company, they trade here, $58 billion market cap. What about them do you like? They're a really good growth company. What do they do? Basically, they make everything electronics that goes into the computer. So they're used in automobiles. They're used in PCs.

They're used in the data centers. They're growing the business really well. They're using industrial factories. But they're under the radar. And that's exactly where we think is the opportunity. Good growth company value price. Let's talk about a company that has just been wallop today. It could be its worst day in history, Dix.

What does Dix report tell you about overall consumer confidence right now? I mean, and it's not just Dix. We're seeing it with other Nike on Lulu Lemon as well. What does it tell you about the consumer right now? Well, I think it reasserts what we've already known, which is the consumer's fickle to buy. price. And right now, they're making those choices to find those value purchases in the market. And some of the things that are happening with Dix is a little bit of an operational issue with the

firm. But if you just kind of take a view overall in the space, retail is going to be challenged. But I'll throw one thing out there. Last week, we saw a major sell-off in Walmart where some of that premium value came off the stock. Look at that company moving forward. Still, same store sales up 3%. And if consumers are looking for value, you got to look at the major retailer right there to find that value. Well, I saw you coming out of the gym last week on Broadway. You were all like in your athletic gear. I don't know where you got that. But this is not scaring you off of Lowe's.

That's a consumer name. Walmart got crushed. Dick Sporting goods got crushed. But David Katz, you're not afraid of Lowe's. We're not afraid of Lowe's. Target actually is up a lot. So it's really hit or miss within the retail sector. And we think in terms of Lowe's and Home Depot, a lot of that bad news is baked in.

it lows at 17 and a half times earnings. At some point, the housing market is going to recover. And when it does, Lowe's has a lot of upside. In the meantime, it's making a lot of money with a miserable housing market. Why do you think that Lowe's isn't doing, and Home Depot, for that matter? If the housing market is so bad, people aren't buying and selling their homes, aren't they sitting at home and thinking, well, love the one you're with? I got to better improve this one.

You would think that that would be an opportunity. They're doing more home improvement projects, but the real catalyst is you need a pickup in housing. you do to pick up in resales. As people are moving from their house, they're going to buy a new house, they're going to make the new house better. People that are moving into the old house is going to fix that up. So that will really goose sales. Can I just jump in on that one real quickly, Condessa, is when you look at the Home Depot result, it's actually volumes for projects are more price point sensitive. So Home Depot's reports show that the consumer was doing projects, but just at a smaller price point, not these big projects, trying to maintenance through

that home cycle. So that's the point that I'm trying to make is that the consumer is still focusing on price, but because the labor market is hanging in there, the spending is still there. You know who doesn't have a margin problem? Refiner's. Yes, sir. You look at the refinery margins. They're up 100, 200, 400, 700 percent year over year. But the stocks have responded. Many of them are at record highs. It's not scaring you off of Valero. No, that's a stock, and that's a name that we do. And the reason why we like it is for a couple of reasons. Number one, even at these levels, those cracking spreads, Brian, are staying at an attractive level when you think about distillates and the prices for diesel and gasoline. Also, the interesting thing about Valero's business is

it also has quite an export-oriented business where demand for what they're refining is also going to Europe and other places around the world. And the last point I'll just say is the disruption in the Middle East, we still see that supply issue of refiners coming. back online and disruption there. So they're going to keep chugging along, I think, and that's why the market still likes that. We've seen a lot of skepticism around AI and whether this trade is a bubble or not. But you say AEP is a good one that you think the slowdown is overdone. Why? So if you look at electrical utilities, the growth rate in electric usage is up for the first time in three decades. The companies are adapting to it. When you look at AEP, they've got contracts with

the data centers. They're dealing with the states. So it's the companies. it's going to be effective in terms of keeping more energy but keeping prices lower. Right now there's enormous political pushback. That's not the stocks down. This is an opportunity to buy a good long-term company. David, we had a guest on yesterday who was suggesting that utilities that already have relationships with the states are a good indication of when a data center could come to completion. So that if the developer has a deal with the utilities, maybe it's more likely. They're more optimistic that the deal can get done.

Is that, do you think that's true from what you've seen? Probably it looks like it. The utilities will have better relationships with the big data centers. They make agreements that the stakes can live with. So AEP, very well situated for that. Next there, energy, also very well situated for that. Next, each of you, very quick question. David, start with you, Brian, then to you.

What's the next big macro thing you're watching? Earnings, is it Warsh? Is it something else? It's just going to be lots of market rotations, lots of volatility in the market, and a lot of the returns for this year have already been earned. I got to start with Friday. I think the setup for worse is a difficult one and how he wants to frame monetary policy,

especially with the actions that the Treasury has taken recently with Besson's announcements. I think that's where we start and going into the fact that we're going to a seasonally tough period of time with a midterm election, that's where the rotation that David's talking about is going to play out. That's it. You know, I guess if I was an investor and, you know, we're not,

We just can own our 401k can on individual equities. It's always disclaimer. Once a year, I say that on TV. I would kind of sit back and wait for the midterms, because the midterms are going to have a bigger effect, I think, on the markets, depending on the outcome than many people may think. I don't know. People are talking about that.

What do you think? I think in this type of market, to try to time with all the different macro headlines and some of the volatility that's out there, Brian, is a really tough call. I'd rather go back to the fundamental. as everyone says, which is let's look at the earnings story. And if you have a balanced approach between growth versus value right now, large, medium and small, and play a little bit of dollar weakness moving forward with the commodities and international equity exposures, if your time horizon is still long, you can have that risk capacity going through this tough period of time.

But if you have something in the short term that you're concerned about, then I'm agreeing with you that maybe sitting back and waiting makes a little bit more sense. By the way, you don't have to sit back and wait. You could head. on prediction markets about who takes the House or who's going to control the Senate or whether AOC is the next Democratic nominee for the president. Yeah. Gentlemen, Brian, David, thank you very much for coming in and talking us. Great to be here.

Good to see you. All right. So with NVIDIA earnings tomorrow night and Kevin Warsh and Jackson Hole on Friday, options traders, they are bracing and they are setting up for potentially volatile end of the week. Oliver, joining us now live from the CBO. Oliver, what are they doing? Right now, it's suspiciously quiet, Brian. Very big events the next couple of days.

Inflation tomorrow. InVIDIA earnings Jackson Hole on deck. S&P 500 options are currently pricing less than a 1% move for the index between here and Friday. That's despite Nvidia options baking in a 5% move on their own. S&P 500 options point to a 40 basis point move tomorrow after PCE. That's 4, one hundredths of a percent. about 70 bips on Thursday and 60 basis points on Friday. That's below your typical three-day implied move,

and it's slipping the further VIX drops, which is now well under 16. According to Options analysts at UBS I just talked to, they use a weighted average indicator of a dozen volatility metrics. They call the Turbulins. They say this is a market that is extremely fragile with the signal the highest since December 2024,

which they say typically leads to Vic spikes over the next month. So if you ask traders down here, they are ready for action. In fact, I just talked to one of the major market makers on my way to launch. I asked how slow is it? And his response was, it's brutal, guys. Brutal in what way? Does that mean brutal? Quiet, slow.

When you're talking to guys like action, like the calm before the storm, Oliver, right? Like we're waiting for something big to hit? Yeah, I think that the, the last thing. the logic can be simplified in this way, Brian. You look at the VIX average, which is somewhere about 17, 17 and a half, depending on where you set your standards. Right now, we're below that. So volatility right now is priced below the average over the next three days and in general. And if you ask the calendar, if it looks average or not, it probably looks something like above average. You've got inflation at a moment where everybody's arguing about the bond market, writing

op-eds in the journal. You've got Nvidia, arguably still the king of the AI trade. And you've got Jackson Hole. So that seems like a pretty above average potential for volatility, if you ask me. Oliver, thank you for bringing us that from the CBO. Appreciate the good reporting. All right, got some sad news to report now. Country music icon and really national treasure, Dolly Parton has died. Her nephew announced the news on Parton's official Instagram moments ago. Parton was known for all of her hits. I mean, what, Jolene? I will always love you. She wrote for Whitney Houston, nine to five. She was also known for charitable giving. In 2022, she was received the Courage and Civility Award from Jeff Bezos, which she received a hundred

million to support her philanthropic efforts. She was 80 years old. I mean, just absolute legend, Contessa. What do you say? I mean, built a business empire on the side, by the way, Dolly World. And this was news that she had grappled with head on. She had told her fans on social media that she was going to cancel some of her concert tours, that she knew that would be disappointing for some of her fans, but that she was sick and she was trying to recover and trying to rest up. but she just put on a brave face along with that beautiful makeup and tackled the world as it is, not as everyone wants it to be. I got to meet her once, I swear, you probably met her too.

She seemed 10 feet tall because her personality and her charisma were just off the charts. I mean, and she's also one of the greatest singers and songwriters of the last 100 years. Really, she set the bar high for everyone else in the performing world who came after her. And put Pigeon Forge Tennessee on the map, I might add. She did. By the way, I'd never heard of Pigeon Forge. Well, again. You know what the most visited National Park is in the United States by double?

Is it Dollywood? Well, it's Great Smoky Mountain National Park. I was shocked to learn it was not only number one, but double the next highest. She probably had a lot to do with it. It was amazing news to hear that Dolly Parton has passed away at the age of eight. And we're going to take a quick break. We'll be right back. All right, a lot of news, actually, for what is supposed to be sort of a slow summer Tuesday,

including this potential breakthrough for oil flows around the Strait of Hormuz. The country of Oman and Iran says they're exploring what they call a joint corridor, try to manage traffic through the waterway. Crude oil prices were down going into it. They're down now about 3.5%. All this, the U.S. ramps up economic sanctions on Iran, calling it the economic D-Day. would this plan of a plan of a plan actually get more barrels through it?

Anybody go for it? I don't have the answers, but maybe Dan Pickering does. He is founder and CIO at Pickering Energy Partners. I guess, Dan, there will be one day where we can just not have news and sort of think, you know what I mean? Because it's every day, and I say that tongue in cheek, but not really, it's every day.

It's a new headline. It's a new headline. Does this headline mean anything to you? Because, again, these are two countries that, let's be honest. I'm glad they're talking, but they don't have any control over the Strait of Hormuz legally in Kuwait and Bahrain in those countries are going to be like, no way. We're not paying anybody to send ships through. Brian, it's noise every day right now. We've got two sides, essentially, the U.S. and Iran that are very diametrically opposed to how the Strait of Hormuz should run.

And so, no, I don't think this news is necessarily needle moving. Both sides want an answer. They just want a different answer. So I think it's more of the same. Yeah, and in the previous hour, on the exchange, we had Amrida set on an energy aspect. She said, well, I think the moving oil prices right now down a little bit is, you know, there's obviously some Pakistan headlines too around Iran. That's probably more longer term be a better outcome if there's some sort of a lasting piece. But that maybe the computers have taken control here now.

And they, you know, they sort of scan these statements as viewing them as mildly positive. And they sell oil, but fundamentally not much. has changed? Do you agree with that? I do. I mean, we have seen over the last six months that the oil markets dug a hole, right? It's dug a hole with the lack of supply coming through the strait, coming out of the Middle East. We've drawn down inventories, probably close to two billion barrels now. And we're going to have to build that back. There is demand in the future to build that back. And, I mean, we're boiling the frog in this U.S.-Iran conflict. It is not that much closer to resolution than it was many months ago.

So this is going to last for a while. And I think the world's kind of waking up to it. That's been the inflation in oil price and the worries about inflation generally. So no, not much has changed. And that's probably bullish for oil prices. It's not great for oil consumers. Well, take that and the fact that diesel is nearing record highs as well. Is there also a bottleneck around refining?

There is, and it's not just a Middle East problem. We've got the Russia-Ukraine dynamic where Ukraine's made some inroads knocking Russian refinery capacity off. So we've lost supply from Russia. We've got Middle East refinery supply off. And the Chinese had stopped exporting products as well for a while. So we have a global problem in oil. We've got probably an even bigger global problem in diesel, Contessa. And we're showing right now, WTI, that it's down about 3%. When you're looking at Brent below 90 bucks, is that pricing de-escalation accurately? I don't think so. I think that de-escalation is going to be something that with Brent has as an eight handle on it, probably, maybe a seven-handle. I think what it's pricing is things aren't getting worse. Maybe they're

getting a little bit better on the margin with some incremental barrels getting through. the strait. But I think right now the oil markets are pricing in some duration to this conflict that, you know, it's not short and it's not super long. It might be super long. If that's the case, we're going back to triple digits. Yeah. Well, where does demand destruction fall into that, Dan? Because we do the math, and we try to do a little bit of math and kind of show some other ways that countries may be getting oil yesterday, where there's ship to ship transfers and there's more pipelines. But you've also got to do. demand destruction, right? China may be down four to five million barrels a day. It's hard exactly

to know the numbers. Where do you come in on not just the supply, but the demand side and how much that may be falling and mitigating some of the economic pain of all this? Yeah, Brian, I'm skeptical of the four to five million barrel a day demand destruction numbers that people are talking about in China. I don't think you drop demand by a third in a matter of months. Price was high, but it wasn't that high for that long. And remember, the Chinese stopped buying in the global markets and started using their internal inventory. So I think that prices at these levels, you know, kind of $82 WTI aren't really high enough to really move the needle in the short term. Longer term, yes, longer term, there'll be substitution, electrification, things like that.

But right now, I would say demand is okay, maybe being masked by the way folks are where they're pulling their barrels from. Dan Pickering of Pickering Energy Partners on the daily twist of the energy markets. I mean, maybe it's hourly twist, actually, at this point. It's all the time. It's constant for six straight months. Dan Pickering, do appreciate you popping on. Thank you very much. Thank you.

Coming up, what has to happen for the yield on the long end of the curve to come down? Rick Santelli joins with his thoughts next. Welcome back, everybody. Oil is falling today, and Treasury yields are following it lower. With inflation expectations still tied closely to energy, oil may need to fall much lower to give bonds a more durable bid. There, you're seeing the tenure right now down just slightly on the day. Rick Santelli joins us from Chicago.

Hello, Rick. Hi, Contessa. Indeed, that really does describe the scenario, and we could look to the charts to give us a little added and more depth. into this conversation. If you look at a 12-hour chart of oil and tens, pretty clear that they're pretty much dancing together. Now, the percentages never quite line up, but the general direction does. And we need to also remember that many of the metrics for the U.S. economy are doing pretty well, and that is reflected in where equity prices are and some of the AI issues. And better

economy usually means higher rates. But we also have some weak statistics regarding the labor market that goes in the other direction. Now, let's look at the beginning of the conflict virtually and start charts on March 1st for oil and 10 year. And what I want to draw your attention to is right there on the kind of two-thirds from the left to the right, the lows there are the end of June. And we see that the oil market, of course, traded down below 70. And we see that the interest rate markets traded much closer to that 440 to 450 area. And the reason I point this out, that's the memorandum of understanding was signed basically mid-June and you saw the yields move down along with oil. But now, even though oil's moving down, not at the same pace it did on round

one before the MOU was violated. So indeed, we'd probably have to see an even bigger move to get a more sustained downtrade in interest rates, knowing it's only one of several factors affecting the downside of interest rates. Contessa, Sully, back to you. So, Rick, I just wanted ask you real quick about this op-ed that was in the Wall Street Journal by Stanley Drucken-Miller, basically arguing that the Fed is making a mistake with these bond buybacks, that these rising interest rates signal problems to come and that the market should know that. Investors should know that. What's your take? Well, there's no doubt in my mind that the Treasury does know that and Treasury Secretary Besant does know that. So for him to have that announcement at the

of July, in my opinion, wasn't really looking to make a huge long-term difference in interest rates as much as to put a marker down that he's paying close attention. And I think that from a policy standpoint, we could debate whether that's a good thing or a bad thing. But in the end, the fact that the market, in terms of movement and lasting movement overlooked it, I think that is the most important issue in this particular example. Treasury, right. Thank you, Rick. I appreciate that. Brian. All right, coming up, another twist and turn around AI, the Open AI semiconductor that the company now says is outperforming Invidia. If you're having trouble keeping all this straight, so am I, but don't worry, Kay Rooney will make sense of it.

Next. As America celebrates its 250th anniversary, CNBC spotlights the companies that rose with the nation and continue to shape its future. Our entire nation is built upon this spirit, this spirit of entrepreneurship, taking on the impossible and making it possible. For us, we persisted for 25 years before we turned a profit, and that could only happen in America where people would invest in you and believe in you. Regeneron, we started it in an apartment, mainly because garages were too expensive in New York City. It was just a handful of us in the beginning. We're now 15,000 strong operating in countries all around the world. But most important, we're reaching millions of patients.

Trained as a physician and as a scientist, I could help people individually. But to be part of an effort where we could discover drugs that could make a difference, you could operate at a scale that was almost unimaginable. And I tried to imagine that. In the early days, Regeneron struggled. But in many people's eyes, we failed for two and a half decades. That persistence, that belief and the opportunity to continue the dream is what allowed us to get to success. A potential crack in NVIDIA's AI chip dominance.

OpenAI says its new in-house jalapeno processor beat NVIDIA's GB300 in tests on both power, efficiency, and response speed. Of course, that matters, because Inference's not training is becoming the next great AI battleground. Kate Rooney joins us now from San Francisco. Kate, break it down. Well, Contessa, as you mentioned, inference, so it's not training. It's sort of the stage of AI where they're going to be running these models. And for Open Eye in particular, the big headline is cost here. So they want to diversify away from Nvidia and other options to own the full stack as sort of the jargony term in all this. but they want to lower their costs by not relying on NVIDIA.

They've got their own homegrown version of this. And this really is the first sort of set of details that we're getting about this. They announced it earlier in the year. Greg Brockman came on CNBC. They talked about it as a potential revenue stream, too, as this company looks to go public. So in that sense, very important for investors, as this company looks towards profitability, they want to bring in more revenue. Seventyconductors and hardware is a way to do this.

And then in order to lower cost overall and what they need to charge people, the margins involved here. It's very good news for investors in this company if they are able to lower prices with these and also helps that they're outperforming. Although interesting, Contessa, this is the ultimate frenemy dynamic. Invidia is working with everyone, but all of the tech companies that are building their own hardware are very careful to say, oh, no, but we still work with Nvidia. They're very important, but we are simultaneously building more. There's room for everybody. It's Kumbaya, and so you sort of see that. I did a Control F, sort of searching for NVIDIA. The only mention of NVIDIA by name is we still work with them and they're great.

So they sort of subtly mention, oh, we outperform competitors, but they want to maintain that relationship with NVIDA. I love everybody. I just love that you just admitted the control F feature, which, you know, you need to find, if you need to find the NVIDIA part. It's almost like the chef of your restaurant opening up a competing restaurant next door, but saying, don't worry, I'm still your chef. Outside of that. We're not open for dinner. We just compete at lunch. Yeah, just lunch. Don't worry about it. Right? Next thing you know. Yeah.

Okay, Kate, separately, the Wall Street General reporting Anthropic apparently is privately telling investors. And I'm trying to make sense of these numbers. It sees over 30 trillion in potential revenue. So 30 trillion is like the GDP of the world. Like the entire world is like 30 trillion. I don't understand like what's in the water out there. You know what I mean? Is it water?

It's boom times. Yeah, no, it's diesel fuel. Everybody's drinking it. No, I mean, it's the tea in front of that is eye popping. I think one of the things that's important to note is that SpaceX really set the high watermark when they said that their tam, their total addressable market, when they went out on the road show, was going to be less than $30 trillion. It was going to be around $28. That blew people's minds in that just that massive market opportunity.

That is a rocket company. This is basically a software company, what investors I talk to that have been in some of, these tests, the water meetings, where these numbers are coming up, it's been, hey, this revenue growth has been exponential. I mean, when you look at the revenue run rate, which we've reported 65 billion, total annual revenue last year was less than 10 billion. So if you're forecasting out, the expectation is that growth curve is going to continue. That's one thing that bankers, investors I talk to are really grappling with in this road show. And as this company looks to go public, they're just scratching their heads and saying the law of large numbers does not seem to

apply right now to this company, and that's where they're getting the $30 trillion number. Interesting, though, they have been so tight-lipped about this road show. I just heard from a banker who said that they're basically the roadshow and the test of water meetings. They're only having the top two bankers from each bank. Maybe one analyst. They're very careful about leaks. They don't want anything getting out. So it's been interesting to see the drips of this. And $30 trillion, I mean, if that's the number to expect, it just speaks to the exponential revenue group. Well, also, it would be interesting to see if $30 trillion, the equipment, the equipment, equivalent of U.S. GDP, according to the World Bank, is actually...

Are you correcting me? No, no, I'm just... Is that you correcting me? I'm clarifying. I'm making a hyperbolicistic television statement regarding the size of the numbers that we're talking about. Can't correct my bombast? No.

She can correct you. Gagillion, we're going to throw that in the right there. Actually, quadrillion is a word that was in an AI report the other day. I swear I read the word quadrillion. But to the point about the secrecy in the road show, is it possible that the third $30 trillion was planted just to see which bankers are leaking? That's a good conspiracy. You haven't confirmed it, but you never know.

You can say if the number's coming out. I mean, the journal obviously has their own vetting editorial process. We have not confirmed this number specifically. But, you know, I would say the companies themselves have been very tight-led. One thing I also heard that's interesting just in terms of the timing of when we might see the S-1, they've, of course, filed confidentially. So we know they're going to go public. We haven't seen the numbers.

but that the run-up time, basically. It's usually a two-week turnaround where they say, all right, putting out the S-1, the company's going to go public soon thereafter. This company is so complicated, and these numbers are so massive that they're going to, from what I'm hearing, from sources, give investors more time to actually digest it,

so it may be much longer than the typical two-week period. So stay tuned. Contessa is going to go get the Reynolds wrap to make her tinfoil hat on that one. Outside of that, are we, Can we at least confirm that we're down to a two-horse race? I mean, I know this perplexity is others out there. Seems like all we're talking about now is Open AI and Anthropic.

It's Anthropic, number one, getting out of the door first from what I'm hearing. At 2027 is likely where we're going to see Open AI. Thank you, Kate. This is what we're hearing. This is the buzz out here. Right. You like it. You get a buzz through that tinfoil hat, Contessa?

Always. Bye, Kate. Let's get now about a Brandon Gomez with a CNBC news update. Hey there, Brian. CIA director, John Ratcliffe is in Moscow today for talks with Russian officials, according to sources. It's Ratcliffe's first trip to Moscow since he took office and the highest-level visit by a Trump administration official since January. His visit comes as U.S. mediated peace talks between Russia and Ukraine have largely stalled. Firefighters in Nevada are still trying to get control over the fast-moving hawk wildfire along the California-Nevada border. The blaze has burned more than 15,000 anchors and is only 27 percent contained.

Seven people have been injured in dozens of homes have been destroyed as thousands more remain under evacuation orders. And WMBA star Angel Reese has set a new single game record. The Atlanta Dream Forward recorded 26 rebounds in Monday's win over the L.A. Sparks. That performance helping her break a league record as well. She now has the most total rebounds in a season in WMBA history. It comes just two days after Reese scored a career high of 31 points. Brian, talk about being on a winning streak. That's a big number. That is a big number. Very impressive. Brandy Gomez, thank you very much. We're looking at the semis and whether now is a good time to get in Market Navigators next.

Welcome back. Time now for Market Navigator. Semiconductors went through a violent one-week reset. Was the sell-off overdone? Was it profit-taking before InVIDIA earnings tomorrow? Joining us now is Jeff Kilberg, who's the founder and CEO of KKM Financial. Jeff is also a CNBC contributor. Jeff, is it time to scoop up the semis? Contessa, I think it is. It's remarkable to see. If you look at the semiconductor space up until June 22nd, Contessa, we saw the semiconductors look at SMH or S-O-X, up about 100% when you saw software down about 20%. So massive historic dispersion. But what's happened, Contessa, since Q3 has kicked off, we have seen software rally and we've seen semiconductors down by and large, by about 20%. So I think the opportunity absolutely is now before

Nvidia kicks off their earnings. Which do you prefer? SMH or socks? Well, it's a great question. It all depends on what time of year. It's a seasonal choice, Contessa. If you look at SOXX, I think it includes Intel, one of my favorite semiconductor chip names in there. But right now, right here, I want to own SMH.

Why? It's because of the overweight to Nvidia, about 22%. So a lot of overlap in between those two names. However, I'm betting on the fact that we're going to see resurgence, And we just saw Anthropic talk about $30 trillion in a total adjustable market. So do we really think that NVIDIA is going to articulate the fact that they're seeing a slowdown in demand, a slowdown in demand for AI buildout? So that's where I get excited by owning SMH going into tomorrow's print.

Okay. Are you still excited that much about the reliance on NVIDIA when we just heard from Kate Rooney and from the Wall Street Journal about Open AI showing that its halapeno processors could give NVIDIA run for its money? Are we supposed to believe Open AI? The things that they have said, the people that have left there, I discredit that. I'm sorry, contested. But what I look at, I want to see some proof, some tangible before I change a position in one of my ETS that I manage, Open AI right now is a lot of bark, but no bite yet.

So I'm holding off on that. Invidia is still king. We just saw the deal that they did with Elon Musk. So I continue to look at Nvidia. And I do believe it's about $20 off. It's all-time high. I think we will see a pop because the last seven. days, we've seen a price reset. Look at the implied volatility, about 6%, a little bit below average,

but nonetheless, that forward PE traded about 23 and a half. That's below its five-year average, typically around 33, Contessa. Jeff, we've watched the software names stage a one month come back now at this point. Does it mean that some of the investment is moving from, say, picks and shovels to the applications? Well, I think it's interesting to see. It's just the momentum trade. We've seen so much moment. We've seen so much leverage like we've seen in 2026. So I think there's more room to run in software. And I think AI will enable and really fortify some of these software names. Of course, there's going to be casualties in the software space, Contessa. But where I get excited about owning SMH going into not just the next 24 to 36 hours, where I think you'll see continued build

on the resurgence is in semiconductor. So high tide lifts all boats, but the NASDAQ 100, not too far off all-time highs up a little bit of it today. We are seeing a lot of headwinds into into space, call it interest rates, call it Iran. But once we see kind of the all clear signal and an oil back below $70, I think we're going to see a rocket ship in semiconductors. Jeff, great to talk to you. Thank you. See you, Contessa. Brian. All right. So kind of speaking to that, coming up after the break, we'll give you some of the activity underneath the market surface that plays a big role in how stocks trading. Guess what right now? They're trading up. We are higher across the board. Now, they're up six-tenths of one percent. And we're back.

right after this. I got a market flash right now on Moderna. Stock's up 14% leading the S&P 500. Wolf Research upgrading the stock to a peer-perform, not exactly the greatest take, but they did have some very positive cancer vaccine results, which sent the stock more than doubling in one day. Overall, Moderna's nearly tripled this month, putting it on pace for its best month ever. Also, software, the sector has been booming recently. Take a look at some of these one-month gains. We were talking about it with Jeff Kilberg a minute ago. But now to let's dive into the details.

You've got Workday and Palantir, both up more than 40%. Service now, Salesforce, Viva Systems. I would read them off, but I can't see without my glasses, and even my glasses can't cut this one. They're just skyrocketing. PTC software? Thank you, Brian. Your eyesight is great. So you had August Valley, of course.

But it's been a tough year for software. It's worth noting that except for all of these. stocks, except for Viva, all of the stocks are still negative year-to-date. So you're seeing some movement now. But if we could combine that segment with your casino and travel coverage, we could have a segment called Viva Las Vegas. He's just so good. This is why I get paid the medium bucks. The VIX may be down nearly 17% of the past month, but your next guest says investors, like you, should be bracing for more volatility to come. Joining us now to lay out some of the key factors on the horizon.

Tim Kwas, founder and president, a modern I.R. Who comes to things from a different perspective. That's why I like having you on. Tim, you're out there in Colorado. You don't think like the herd because market structure. You and I have talked about this a lot. The way that there's sort of the underlying buildup matters. What is happening right now that is causing like a Dick sporting goods to move 30% in a day?

Well, Brian, good to see you. And a lot of people call me different. So, you know, you're certainly great. About that. But it's, but it's, but coming from the best host on, on TV, it is, it's a nice thing to hear. So, yes, why would, why would, why would, there are two audiences who should care, right? The CEO, the CEO of Dick Sporting Goods probably cares that the stock's down 28%. And then there are the holders who, you know, who, who, who, who don't have a chance to react to it.

And why is this occurring? And it's, and it's pandemic now, all over the market. volatility around earnings reports has increased. Academic studies show, it's a great one out of UC San Diego, that shows there is a 90% probability around earnings outside market hours of a large two to three standard deviation move. And what causes that? And the short answer, which is a four-letter word, is bets.

Hedge funds make very large, automated bets so that when an earnings release hits the market, It's machine readable data that goes right into what's called an execution management system. And in a half dozen trades, the price drops 20%. And that bet pays for the hedge fund. But no one else gets to take advantage of it. So then what should a public company do? Yeah, well, I was going to say, how do CEOs, a lot of CIOs and CEOs watch, they're watching right now. You consult that.

Yes. What is your advice to them? Don't give away all your paid advice, but give us some free advice to him. What's your advice to them to get ahead of this, to manage this? Well, for you, I'll share, Brian. So the way that you get ahead of this as a public company and as a chief investment officer, so for the CIOs, understand demand, supply, and volatility. Those are the things that drive the market.

For public company CEOs, recognize that flows Trump fundamentals. If you beat and or raise, beat and or top line, bottom line, have less than a 50% chance of seeing your stock rise. Less than a coin flip. Less than just random chance. So here's what you should do, public companies. Number one, shorten your earnings release. There should be almost no data that is machine readable in it.

If it's 500 words that says, we reported results, you can find them here. Thank you, goodbye. That's good. And number two, report where the volume is. Less than 10% of volume is outside market hours. in the opening and closing auctions is 65% of volume, which is large institutional flow that won't a midpoint. It will mitigate risk. So the ideal is you unhalt right into the opening auction. That's when you should report. I've discussed this with the SEC, FINRA, the exchanges.

Our job is to, as fiduciaries for shareholders, is to have their best interests in mind, and we need to adapt to the markets we've got. It's good real-world advice. And maybe the actual-world advice and maybe the after the bell earnings at some point. We hope they don't go away. We like to, I'll be doing fast money tonight. We like to have them. It's news.

But maybe it's not the best way for the stock. Tim Kwas, Motton, I, our president, and founder. And appreciate the compliment. Contessa agrees. Thank you very much. More power. I need to ditch the mutual admiration society here. It's a great.

I'm an inaugural member. More power lunch right after this. An interesting story at the intersection of sports and Wall Street and insurance. Bloomberg reports that LeBron James LLC borrowed nearly $300 million from two Midwestern life insurers in 2018. And the deal was advised by Guggenheim Partners, which, of course, Mark Walter is the CEO of. It gave LeBron James immediate cash in exchange for a portion of his future off-court earnings, including his lifetime Nike deal. The thing that I want to point out is a lot of times these life insurers were looking

for rate. When rates were low, they needed to find return somewhere, and they were looking at unusual investments. Interesting stuff. Appreciate that. We'll see tomorrow. Markets are up. I'll see you on fast money. 5 p.m. Eastern tonight. Closing bell starts right now.