Power Lunch - Major averages move higher as the S&P 500 is on pace for its longest weekly winning streak since 1985 6/2/26

Episode Date: June 2, 2026

The S&P 500 reached a new all-time high on Tuesday as the index is tracking for its 10th straight week of gains. Brian Sullivan & Kelly Evans break down the move in the markets and check in on oil prices, cryptocurrencies, and bond yields as well. The anchors are also joined by Dutch Bros CEO & President, Christine Barone, for an exclusive interview to discuss the company’s latest earnings and how they are navigating the current economic environment. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The markets and your money one day closer, hitting a 40-year milestone. Welcome to Power Lunch with Kelly. I'm Brian. Another day in stocks, they keep going up. Markets pushing for a stunning 10 weeks of gains, but have we officially reached the point, Kelly, of panic buying? We'll ask. Plus, the brewing competition in coffee houses with Dutch bros rapidly expanding across the country

and delivering double-digit revenue growth through its drive-through model. CEO Christine Baroni is here. here joining us coming up. All right, look forward to that, but we have got to start with the markets because the S&P 500 once again hitting a new all-time high. And everybody, stop us if you've heard this one before, but yeah, tech stocks leading the way again. But this time, it's not just the new names moving up the charts. Case in point, Hewlett-Packard enterprises soaring on AI-related results. Look at IBM. By the way, IBM was the biggest company in the world back. It in 1985. Also higher again, Kelly's favorite stock. Dude, you're getting a Dell. It is doubled.

You don't even know what that means. Dell is doubled in value in just nine sessions. I remember those commercials. So we need to bring that. You do. Because I ask the team like, what's that? No, I know, dude, you're getting a Dell. Fantastic. Things could move even more in the next 24 to 48 hours with more tech related earnings from Palo Alto tonight. Broadcom. That's going to be a huge one. Crowdstrike out tomorrow. A lot money is pouring into the space, but for how long? At the Economic Club of New York today, Goldman's CEO David Solomon said there's plenty of liquidity in the system of the world, if the world continues to remain optimistic. That said, he also said this to our Leslie Picker.

I do think we're in a period, and I know when I say this, so I'm, you know, I'm pausing for a second to say it, but I know when I say it, it will get quoted, but I think it's definitely true and something for us to reflect on. We are definitely in a moment where there's more grieve than there is fear. So is he right? Let's ask our all-star panel, Nancy Tangler, the CIO and CEO of Laffer Tangler Investments, and Steve Sosnik, he is the chief strategist at Interactive Brokers. Steve, take the ball down the field, too much greed in the markets? Oh, absolutely. That was going to be, he stole my line. You know, basically markets need to sort of have an equilibrium between fear and greed, sort of like the classic in and yang. I think right now is, you know, or risk and reward,

as you want to put it. Right now, risk is reward to people, and that becomes a very untenable situation. People, among a lot of investors, a lot of traders especially, the more risk you take, the more reward you get, bar none, because we don't have risks to really deal with for a lot of people. And that becomes a very difficult situation. That's what leads to the parabolic charts you're seeing, and parabolic moves of the type we're seeing can be very unstable. Yeah, but Nancy, my guess is that some of your clients feel that way, but they're not willing to get off the bus just yet, are they? Well, student of human nature, Brian Sullivan.

Yeah, we are hearing, let's take more risk. But we're also hearing some clients say, how do I protect my gains? And so the issue right now is that nobody's really interested in doing that, which means puts our cheap, and that's not a bad thing. So I would just say this. I think this is one of those moments where we're, I agree with Steve, we need to let some air out of the tire and let this blow off kind of slow down.

And then I think you get another opportunity to step in and add to some of these names at better prices. We are in a bull market. I think we remain in a bull market for some time. And one of the things that it really is emblematic of that is that you're seeing earnings growth and just using the estimates for the year that are more than keeping up, with the stock market returns. That was not the case in the 90s. We were way behind and we had multiple expansion.

We actually saw multiple compression this year. So I think there are some opportunities to take some gains. And we've done that. But I don't think you want to exit. Steve, where are you seeing people buying? Are they looking, it feels like a heat seeking missile looking for the next place that's going to give them that 30% pop? Well, they continue to look in semiconductors.

You know, most active stocks on our platform are Micron and Nvidia, which probably should surprise nobody. I think all the top seven stocks were semiconductor stocks, specifically, maybe with the exception of Tesla, if you want to consider. But then, you know, they're also looking to quantum computing. They're looking to space-related stocks.

You know, in some ways, it's also back to the future. They're looking for the stocks that Brian mentioned at the top of the show. The names that had been left behind, so the IBM's, the Dell's, Intel is the fourth most active stock on our platform. Oh, we should have put that one in there. It's another, that's sort of oldie. I'm not offending Intel.

No, but we can go back. Nokia popped up on the list this week. Blackberry's been hot. Yeah. Yeah. So, you know, so this is, you want to talk about, like, you know, going back to the future. These are, these are, in many cases, the back to the future names because everybody was so focused on the new or better names. Now let's focus on.

What else happened in 1985, Kelly? A banner year. Banner year for TV news anchors. A birth year for some of us. Kelly Evans. So I remember that one very well. But I was going to say, it almost makes me laugh because the meme stock rally. was in some ways the first time that the herd went looking for these left for dead companies

that could generate these huge returns and, you know, AMC and GameStop and all of that. And now here comes AI achieving the very same thing, but this time, I guess, was real money behind it. Well, there was real money then, too. And I would say the meme stocks in many ways were the precursor because there was an element of nostalgia about it. Think about it. How dare you bet it go against GameStop? That's where I used to go trade my games when I was nine years old. Now I have money to invest.

I'm going to go against the shorts. that anyone was like, you know, HP, I got to go defend. Exactly. But these are the old familiar names, and I guess, but they're bringing the, you know, they're carrying the water. You know, Dell is making money. Yeah, and Nancy, again, listen, I don't want to be the negative person up here saying, you know, well, yelling at the cloud like some old man, maybe Dell, as opposed to saying Dell doubled in nine days, which is true, maybe we should say Dell was underpriced. It was undervalued that the market missed something and the numbers that Dell came out with were so good.

And you said valuation compression or multiple compression at the beginning of your first answer, maybe the market or investors have just missed things where these are not stocks that have been red hot. Maybe it's now pricing to where they should have been. I mean, that's a fair statement. I think we need to beware. I mean, Intel peaked at 124. It was up every single day, much like the Dell move, but on no fundamentals. at least Dell delivered very solid earnings growth.

But then you look at a name like a Vidia that's growing at 80% year over year, trading at a price to earnings growth ratio of less than half of one time, so 0.5 times. And it's doing almost nothing. I mean, it's had a little bit of a run. We added it to our value portfolio. I'm more interested in owning the sustainable growth names than I am the catch-up names. And I think that's what these are. And I would just caution, I don't know if they will continue on this trajectory for much longer because they are getting a little bit stretched at current valuations.

A little bit stretched. All right. I want to pivot very quickly. I want to talk Steve about a specific story that's out there. It's a little bit wonky, but I think it's important. WBI, wonky, but important. The exchanges. You look at CME, CBO, and Intercontinental Exchange.

They're all down today. it's a little bit deep in the woods, has to do with prediction markets and what they call perpetual futures. But the stocks are reacting. I know this is your world, right? Interactive brokers. What's going on here? Well, first of all, let me start by saying, yes, interactive brokers has the forecast

X exchange. And as a rule, I'm bullish on the idea and a big believer in the idea of prediction markets when it comes to risks that can't normally be hedged. In this case, I think the market is overreacting to some comments about perfect. perpetual futures, which to a certain extent is sort of a loophole around it. It's basically a way to buy, in this case, spot Bitcoin that never actually become, it's a future, but it never actually settles. So it basically buy the spot.

But they might give, correct me if I'm wrong, sorry to jump in. They might, regulators, there's some chatter, may give that ability to prediction markets like Kalshi. And I think the thesis is that that would pull retail money away from the names we just showed. the NASDAX, the Cebo's, the CMEs, the Ices of the world, and into the prediction markets. I'd say, is that accurate? That's the perception. And again, in this market where perception is such an important feature and momentum is such an important feature, it's driving it away.

I think we're a long ways from that. If you look at the option volume, for example, which has been exponential going on three, four, five years now and continues to grow. If you look at stock volumes, which are solid, I think the idea that these things are going to eat these exchanges lunch in the short term, is a bit of a stretch, although, as I say, I remain a firm believer in the potential for the broader idea of prediction markets. Nancy, I don't know. I guess I see there's like a bar that's hedging, you know, it's free drinks promotion if the Knicks win by like using prediction markets. That's all fine. But I would hate to see, you know, young people who have capital and maybe they just view it as a form of entertainment. But I mean, you can really compound in the

market in a long term over. I just, I'd hate to see all of this get distracted. turned into just people jumping from crypto into prediction markets and, you know, look back, they could have really built something. Right. I mean, at some point, it's gambling, not investing. And so that's one of things I write about in my book. It's tempting. We all want to chase the winners or go for the quick money.

But I think as an investor, what you want to do is continue to be focused on the long-term story. I know I sound like a grandmother, but be focused on the long-term story, earnings growth, fundamentals, valuation, those things matter. have to be in the right narrative. And that's one of the reasons why we launched Arthianatic. Steve mentioned people are interested in space robotics, quantum nuclear. That's where ours is focused. Though that's gambling enough for me because there's a lot of volatility in that space. And yet, you know, excellent returns. So we'll see. We'll see how this all plays out. But I'm not chasing the prediction market bandwagon.

By the way, Nancy, just before you go on the big news of the day, 80 billion in equity raised from Google. They could have done debt. They didn't. What do you make of that? I think they went where money was cheapest and I don't blame them. I think this is going to be a bellwether for many companies, but in particular for Broadcom. So while, you know, it's one of our largest holdings while we were looking at a whole host of things come out of earnings, I think some of that just gets muted because a lot of this cap-ex spend will go their way. So I think that's what companies do, Kelly. They go where where capital is cheapest. And our convert manager is going to be in buying the convertible bonds. There was about 15 billion of that mandatory convertible

preferred. And, you know, that's that's where the companies are going to go. Do you have any doubt in Google's, you know, ability to put all of this capital to a very high rate of return? I do not. I mean, I think they learned from the barter mistake. That's actually when we added it to our value portfolio. We've owned both Nvidia and Google and our growth portfolios for a long time, but they learned from that mistake. I don't think they're going to overextend. These are pretty

smart operators. Also, with tons of cash on the balance sheet, that begs the question, but I think it gives them the chance to retain that cash and use it for capital allocation for shareholders. Nancy and Steve, great conversation to kick things off. Really appreciate it. Thank you. All right, folks, we are

just getting started. Coffee prices, they're near record highs, but consumers, they don't seem to care. We're going to find out why. Talk about that and a whole lot more with a special guest. The CEO of Dutch Brothers, one of the hottest coffee places in America is here one cup at a time. But after the break, big tech cashing in on AI. But should you, the public, get a cut? Senator Bernie Sanders says yes, and he's calling for a fund to do just that. Talk about that and more. Markets at record highs. We're back right after this. All right, as you heard, Steve Sazick say at the top of the show,

it's kind of all about the semiconductors and tech again today, the socks and the SMH ETFs, both hitting new all-time highs. But let's hone in because there's really one stock to rule them all. And this one is, dare we say, Christina Ports and Evellis acting marvelous. You wrote that, didn't you? I did. Marvell soaring roughly, what, 29% today after NVIDIA's CEO, Jensen Wong made a very public bet on the company at CompuTech in Taipei. Jensen Wong joined Marvell's CEO Matt Murphy on stage and lead out the case. As AI workloads get distributed across thousands of chips inside massive data centers,

connectivity becomes the critical bottleneck. What makes it possible is connectivity. Yeah, we're seeing it. That's why they're going to be the next trillion-dollar company. We got a little work to do, but we're on our way. We're on our way. Thank you, Jensen. So that comment about being a trillion dollar company, Marvell's market cap right now is 248 billing.

Assuming the share count stays the same, the stock price would actually have to surge to $1,143 in 12 cents to actually hit a trillion dollars in market cap. But can a shortage get them there? According to Marvell's CEO, the next constraint, as you heard, an AI infrastructure is not compute or memory, it's connectivity. That means optical technology is increasingly replacing traditional wiring inside data centers like copper. And Marvell makes the chips that power those optical systems. Barclay sees the revenue growing up to 90% this year and next. Invidia has $2 billion with skin in the game here, a strategic investment in Marvell going back to March,

with the two companies working together on optics to replace copper in data centers. And, of course, today the optical trade is definitely spreading. Lumentum is up with double digits, coherent. There's 17 corning that makes the glass for it up 13%. And as for Marvell itself, it's up 250% just over the last three months or so. The best performer in the Sox Index, trading at 64 times forward earnings. When you compare that to a five-year average of 30, that's more than double. Today puts it on pace for a 12th straight weekly gain.

So definitely marvelous. In a reminder that in this AI build-out, the picks and shovels are not just GPUs anymore. It's a marvel. What can we say? Christina, thank you very much. Speaking of AI, Senator Bernie Sanders is unveiling a new press. A proposal aimed at sharing the wealth created by artificial intelligence by the creation of a so-called AI sovereign wealth fund. This legislation would give the public a direct ownership stake in the largest AI companies in America through a one-time 50% tax, not on profits, but on stock. Sanders says the fund could eventually generate billions, even trillions of dollars, with payments going to Americans.

The proposal comes as AI is expected to boost productivity while potentially disrupting millions of jobs across the economy. Here to discuss as Wells Fargo chief economist Tom Porcelli. He recently published a note examining AI's potential impact on the U.S. economy. How do you like to have to answer this one, Tom? He's like, wait, I wanted to talk about Joel. I wanted to talk about GDP. Thank you, TIP the burning comments. But let me also frame it with Google's equity raise and everything.

Everyone really wants to know what impact is AI actually having on the workforce party? What can you tell us? So, one, the amount of spend is staggering. I think it'll persist. You know, it's adding close to a percentage point. I mean, if you import it just it's a little less than that. But whatever, even if it's a half a percent, it's still adding very meaningfully. When we look at the actual impact on jobs, the impact right now is like it's just,

it's not existent at all. And so if we look at like AI usage by sector and then we look at the change in jobs by sector, and you put that like on a scatter chart, hasn't been fond of saying, it looks like I sneezed on the page, right? Like, so the dots are everywhere. No, the R is basically zero.

So some companies may have been cutting jobs. Some may be adding, but Sam Malmonds yesterday was on this program and he said the companies that are saying they're cutting jobs because of AI, it's a sleight of hand. Yeah. So there's no question that there are some companies

in a company specific way that are probably seeing that effect, but in the aggregate, again, at the sector level, it's just not showing up in the data, not at this point. I assume you went to college. No. Of course I did. I know you went to college. Anything is possible.

I have two, two and a half, three college degrees, so I may go back for four, two notes. My point is this. You guys think about the value out of that. Well, we're being a little bit snobs up here. And I don't mean here on the show, I mean in the media in general, because what I think we're missing,

and you've written about this, is this idea that, yeah, maybe the mid-level office job is going to get disrupted by AI. Let's hope it's not, but it might. But guess who's winning? The trades. Trades people can make $150, $250,000, $250,000 a year

without a college education because of all the capital spending going into the cycle, and you don't think that spending is going to slow down any time soon. No, I don't think it does at all. In fact, even speaking with the equity folks that look after tech,

you know, they expect that, next year, your starting point for next year is this dollar amount today. Right? Like, it's not going to move all that much. If I think if you want to make an argument for where you're starting to see maybe some of this show up, you know, you can look at the spread between college entrance into the labor force versus everyone else. And that spread is actually starting to widen meaning college entrance are having a

harder time finding new jobs. So you can make an argument that there's some of that happening now, but it's way too early. like people that are saying, hey, it's the productivity that we've seen over the last, you know, sort of year or so it's old productivity. It's not. Its companies basically scaling back on hours worked because they had bloated hours, you know, in the sort of the post-COVID. But there was, and I'm sorry to jump out on this, but it hits home because you and I both went to rural Virginia high schools.

Yes. The majority of my high school probably years two did not go to college. Correct. But 90% did not. Most joined the military. God bless them, by the way. And about 20 years ago, 15 years ago, remember this quote, somebody was like, well, truck drivers should just learn how to.

code or something like this. Guess what? Maybe the coders should now learn how to drive trucks. Yeah, it's totally reasonable. It's totally reasonable. I think in the end, you know, I was using an example of my grandmother, right? My grandmother was a telephone operator, right? Like, you know, hit zero and someone will pick up the phone. So is my mom. Yeah, there you go. You know, back at his peak in like the 50s and 60s, there were 350,000 telephone operators. Today, they're effectively zero. But the labor force has done nothing but grows. So I think it's, I think that you're not appreciating the dynamism of the economy to say, that, you know, all jobs are basically going to face things.

The reason this matters is because we are going to have these competing narratives, especially in an election, a midterm year, and all of that. So if, basically, Bernie Sanders is positing that AI itself is not going to benefit people, therefore they need direct payments from AI companies. And so if you're telling us, no, AI will benefit people. This was the argument Dave Cody was making this week as well. He said it's going to increase productivity, raise living standards. In that case, it's harder to make the case that you need to create an additional vehicle

by which to sort of have these direct payouts. Yeah, I think that's totally fair. And by the way, I think you also have to throw the inflation part of that conversation into the mix. Because I think about someone like Kevin Warsh, who keeps on saying, well, you know, it's going to be disinflationary. You know, all evidence to the contrary right now. I mean, AI has actually been more inflationary, which, again, is just sort of another tax. Why is that because it's just raising the cost of components and hours, you know, labor costs and all that? That's exactly right.

I mean, just look at the price of compute. And by the way, you can see it in PPI. I mean, it's literally the line on that number is literally moving at a parabolic pace. So it's happening in effect right now on the inflationary side. Yeah, we got the jolts number out today, but we got the big jobs number. I think the jolts is more important, but the monthly. I thought, yeah, sorry, go, Brian. No, no, I want to hear.

You're the guest. So what I would say is the jolt's number was a little bit wonky, to say the least, right? I mean, as Kelly and I were talking about earlier, most of the increase actually came in one sector. In fact, the increase was so staggering. It was literally 2x, the next biggest increase in the history of that series. I mean, just keep that in mind. Two, most of the job gains came in the one to nine size companies. If I look at the small business sector, that's always where the job gains are.

No, no, no, but if I look at what small business is saying today per the small business survey, it's just simply not showing up at all in the same way that the Jolt's data was suggested. to hit the, when they just want you to do something, they just run an animation. So it's like, now it's time for the bond report. If you're on the radio, that's what that sound was. All right. So Cleveland, to his point, here are the rate move probabilities. And the rate move probabilities in Cleveland president, Beth Hammock said it today. Yeah. David Solomon said it today to Leslie Picker in that you saw that panel they were doing. The most likely, if you had to flip a coin, the most likely chance is a rate hike. Yeah. Not a rate cut. I still think I would

I would submit to that I still think the hurdle for actually hiking is still pretty high. I think it's, I think, look, Kevin Warsh is going to oversee a shift to the entire committee going to a neutral stance. And I think that that is the right call. But I still think that you need to see the supply inflation shock evolve more into a demand inflation shock for the fact to really start the process of seriously thinking about lifter maze. And the first tell on that will be if long run inflation expectations in the market. When will you know that?

It'll, it'll happen. It'll happen in a snap. It's not happening right now. But again, Brian, think about that. Despite all of what's going on from an energy price perspective, long-run inflation expectations are still relatively well-behaved. Tom Porcelli, Wells Farber, Chief Economist. Love having you. Love having you on set, Tom.

Good to see you. Good to see you. It hit a lot. All right. coming up, it is almost 1130 a.m. out west. Just about time for another cup. And the head of one of America's hottest coffee chains is here. Dutch Brothers CEO, Christina Baroni. Next.

Welcome back. We have a news alert on Microsoft. K. Rooney, what's happening? Hey, Kelly, so we got the highly anticipated news from this event here in San Francisco. Microsoft now unveiling a suite of its own in-house AI models. This is key. It's really been trying to diversify away from Open AI. It was an early backer, an early partner. Today, unveiling seven new in-house models for Microsoft. First one is reasoning. It's their first reasoning model. They say it's been trained from scratch with zero distillation. and this is important. It means it hasn't pulled from other existing models. It's sort of proprietary. It's new. It says it uses commercially licensed data. So enterprises want that. They want to be able to build with confidence, not worry about copyright and data is important. Video creation model as well. They say it outperforms Google's model. And then a coding model. We talked about earlier, Kelly, GitHub. It's now available in co-pilot.

And Microsoft is hosting this event today. Big picture really to try to woo developers. It's a key area, key cohort in this AI economy. Anthropic has been the one dominating so far in this arena. But Microsoft looking to catch up here. There's also something called Scout. So this is an always-on personal AI agent. It's going to be working in the background. They call it autopilot. They're also letting OpenClaw run on Windows. This is the buzzy open-source software that can direct a group of AI bots pretty much to carry out tasks in the background. And Microsoft is looking to make those enterprise safe and let a broader group of people use those, and especially developers. OpenClaught had actually driven a bunch of developers. to the MacBook Mini at one point.

Microsoft looking to keep up here unveiling its own AI PC to compete with Apple. Satya Nadella, CEO of Microsoft's been on stage today. I believe he's on right now. He's been on in the last few minutes. He's been describing this today as a platform shift for Microsoft. Agent is the word of the day.

He's talked about that repeatedly. InVity CEO, Jensen Wong, also made a cameo, talking about agents as well, guys. Looking for some movement of the share price, Kate, still sitting down about 3.5, 4%. We'll see if investors rethink that. Exactly. But still, potentially.

big news and first day reaction doesn't tell you that much. Kate really appreciated Kate Rooney with some news from Microsoft out west. While stocks are at record highs, the consumer hasn't been feeling as great these days. In fact, consumer sentiment recently hit an all-time low as prices for gas and groceries remain high. Retail prices for coffee are also still near record highs, although they've pulled back lately. Your next guest is navigating all of it as the head of the growing coffee chain Dutch bros. The stock has been under some pressure this year down about 5%. Here for a power lunch exclusive is Christine Barone. She is the president and CEO joining us from the William Blair Growth Stock Conference in Chicago.

Christine, it's great to have you here. Welcome. Thanks, Kelly. You've had a lot of challenges. You take a company that's growing rapidly. You have inflation. You have tariffs. You have coffee prices. And I know a lot of analysts say you've been doing an admirable job so far navigating through all of that.

Are we going to hit clear sailing or are you now facing a headwind on the consumer front? Well, I think we navigate through a lot of things. And I think all of us have been navigating through a lot for many years now, right, with COVID and then inflationary prices, all different types of things. And I think what we stay focused on is we still, we really stay focused on serving our customer in the best way we possibly can. We look at what they want from us from an innovation perspective, from a beverage perspective, what are those new drinks they want? And we deliver that with incredible service. and really connect with them at our window. And so during all of this time, I think that is the most important thing to really stay focused on. And as I understand it, you guys aren't even kind of the traditional morning coffee kind of chain.

I haven't had it myself, but, you know, there's still time. You do a lot of energy drinks. You do a lot of cold brews that drives traffic in the afternoon and the evening, so you benefit from maybe from a little bit more of that whole spread throughout the day. Maybe food is something to tackle next. But so are you saying that basically,

because again, you have drive-through locations, Are you guys seeing any impact from high gasoline prices? Yeah, so as we look at kind of how we're navigating all of this, in Q1, we had 8.3% same shop sales, and to really continue to grow the business. We've also shared that we had a great April. And I think that as you look at it, we actually have a lot of drivers of our business that are really helping us navigate these times. So we are rolling out a food program right now.

We do actually have a morning coffee business that's actually quite strong. So we continue to enhance that with new offerings. And we also just launched a new energy beverage platform. So we have a rebel energy platform. We also launched a new beverage called Mist. And it's a little lowering calories. It has antioxidants. It's plant-powered energy.

And really what our customers are looking for right now. Yes, I'm excited and Brian's shaking his head. So I think that captures the demographic quite well, actually. So, Christine, you're at the Growth Stock Conference. You guys are growing locations rapidly, but I don't know if you hit a ceiling at some point. There's plenty of Starbucks locations. There's a lot of Dunkin' Donuts out there. Yes, we're almost at 1,200 locations now nationwide.

We're in 25 states, but we have a very long way to go. So we've shared that our Tam, our total addressable market is about 7,000 shops. And so there is a lot of growth still to come. We have a goal internally to hit 2,029 shops in. in 2009. Wow. And I mean, it has a nice ring to it, if nothing else. Christine, are you guys using vibe coding?

So as we look at vibe coding, we are starting to look at that and see. Now, I think we have a lot of our customers who are on our app. And so we want to make sure as we make any development updates that we're really thoughtful that it's something that we can actually QA and we can understand the new code that's being written. But we are certainly experimenting to the point where we are. you know, recognizing that there is some savings in hours. But we still want to make sure we're doing all of that QA so that when we're rolling out new applications and new things for our

very much used Dutch rewards app, that we keep that in mind and make sure we can still QA everything well. What is that quality analysis? Yeah, to just quality assurance. Quality assurance. Yeah, when you roll out something to the customers, that it works super well and as they expect. Thank you. What, you know, it makes me realize you spend more time thinking, maybe thinking about quality assurance. Christine, really appreciate it. Thanks so much for joining us this afternoon. Thanks so much, Kelly.

Christine Barone, President and CEO of Dutch Bros. All right, coming up, Iran and the Middle East are at a crossroads. So what exactly happens next? Lee McCrawley is here. Global energy, oil and gas markets in wait and sea mode, following a wave of sort of conflicting headlines out of the Middle East. President Trump saying talks with Iran are ongoing, despite a report,

Iran said it kind of walked away from negotiations. It all begs the question. When will the U.S. and Iran strike a deal? Will it involve nuclear? Will it happen at all? Well, according to Kalshi, it's basically a coin flip on whether or not the U.S. and Iran agree to a deal before the end of the year. 47% say, yeah, a deal will happen before December.

54% say it'll happen, but not till before 2027, 39% before November. it doesn't equal 100% because everyone's kind of voting on their own. Let's talk about it all with Lehmie Mccroft, head of global commodity strategy at RBC Capital Markets, CNBC Contributor, and just super awesome and dialed in person. You put that on your official bio. Yes, exactly. That is, I just gave me the official. Brian Selvin says I'm the super awesome valid in person.

Cauchy, the betting markets. They could be wrong. People can be wrong. But, man, people are all over the place. What do you see? Well, look, the question is, does a deal involve Iran? exercising control of the straits. So I think it matters, like, what does a deal look like?

Iran is pretty insistent. They're not giving up control of the strait of Hormuz. So any deal with them operating some type of control rights, I think ends with lower flows going through that waterway than we saw on February 27th when the war started. Well, would you agree it's kind of all they have? I mean, that's their big... That's more important than nuclear program at this point. That's right. Right now, that is their leverage point, which is, you know, I'm the captain now,

sort of I've got control of this waterway. Are you confident, Halimann, I know my sources have said they're not. I know you've got the same sources probably as a former CIA analyst. Are you confident that there is an Iran with which to even negotiate right now? Well, I think what's interesting is Institute for Study of War, I think, has been the best on this right now. They're saying, look, you can have Kaleebuff, who's saying negotiating with Washington, but is there a strong chance that there are more hardline elements in the IRG?

that are exercising final decision-making authority over a deal, no deal. And for now, that hardline element is like, we can wait this out. We're getting money from whoever is paying tolls to go through. Some ships are going through, as you've pointed out. Those ships have probably paid to go through. There is a situation with the previously sanctions Iranian barrels on the water that were allowed to go sanction-free to certain refineries. They've made money from that.

Are they in a situation where they have to settle tomorrow? tomorrow. Probably not. And we'll hear from Netanyahu tomorrow on this network. We'll see what he has to say, but fiery back and forth between him and the president this week. Wow. And meanwhile, we hear that the U.S. was trying to put leverage on the Arab countries to agree to the Abraham Accords as part of all. And they're concerned about what's going on in the strait. So how is Israel complicating our ability to reach a deal right now? That was the issue with Lebanon. And what was so interesting was the Iranians essentially expanded the scope with a conversation, not just from toll booths and paying reparations to saying we have to settle Lebanon as well. And making Lebanon a condition of agreeing to even just have a memorandum of understanding. And so the dispute yesterday was over Lebanon. And so to me, the Iranian list of demands keeps expanding.

And so does the U.S. list. I mean, that was the whole issue is that President Trump has tightened the term, saying, no, we absolutely want access to that highly enriched uranium and putting real conditions on what type of enrichment capabilities that they will have and saying you won't control the straight of Hormuz. So it doesn't seem that either side is really moving towards a deal. We're not. We feel a little bit, it's been a little bit stasis. Maybe, you know, some headlines here, some headlines there. My Power Insider weekly piece comes out tomorrow. And in it this week, I write that, oil, why oil is as low as it is. I know it's higher than it was, but it's not at 150. Right. We're not anywhere near where we were Russia, Ukraine at the moment. But the Houthis sort of saber rattling yesterday, the Iranian proxy, they may get involved.

Saudis are shipping a lot of oil, maybe seven million barrels a day from the Red Sea now. How close are we to like one errant Houthi missile from $125 oil? Because if the Red Sea gets attacked, now you got two fronts. I mean, that's the big issue. I mean, if the Houthis came into the conflict and essentially lob some missiles at Baba Mandab, then that waterway would be sort of out of commission as well. All the ships are going to be like, nope. And that has been the main Saudi access route. So obviously you have to pay attention to that. But Brian, the other issue is the longer we say stuck in this status quo or basically minimal ships, but you have this ceasefire that allows Iran to rebuild missile capabilities and drones, are you setting yourself up for a situation? If this goes through summer, what's it going to look like in terms of inventories? What's it going to look like in terms of ability to... What do you think?

I mean, I think that's the problem. I think we're in this sort of... Maybe a frog in the pot that's boiling. But like by the time we realize there could be a real problem in terms of lack of molecules, you may have hit the wall. So I think the real concern comes if we don't wrap this up come summer and you're sitting in September, October, and then you have a problem in terms of... of real shortages.

Which is, that's kind of what Exxon was saying. That's what Mike Worth has been saying. I mean, to me, what's been interesting is you had the physical traders warning in April. You had Russell Hardy saying a billion barrels, VTAL CEO has been lost. Now you have the big oil company executives warning like there's an iceberg when it comes to inventory shortages. Can't say we haven't been warned. We can't say we haven't been warned.

We need to get off Fantasy Island. Well, there's two ways we get off the island. The good way and the not so good way. Halima Crawford really appreciate your insight. As always, always the good way. Thank you. Thank you. Let's get to Julia Borson now for the CNBC News Update.

Julia. Kelly, Canada today formally requested that the North American trade agreement with the U.S. and Mexico note as the U.S.MCA be renewed. Ottawa is seeking a 16-year renewal to the pact while looking to hold parallel talks on tariffs, including on steel, aluminum, and cars. Mexico also reiterated its support today. Canada's trade minister is in Washington today for talks with U.S. trade rep Jameson Greer. A flesh-eating screw worm that could threaten the beef industry discovered within 25 miles of the U.S. border with Mexico today.

That's according to Agriculture Secretary Brooke Rawlins. The parasitic flies feed on the flesh of living animals, eventually killing them if not treat it. Experts say an infestation could cause billions in damage to the cattle industry. And Uber is capping usage on some AI tools for staff. The move is meant to manage costs after the company went over budget on AI earlier this year. The limits which were put in place in recent months only applied to agentic coding software such as Anthropics Code. Kelly, back over to you. No big reaction yet from the AI stocks, but Julia, these kinds of stories, I think, are the place to focus on for sure.

Thanks for bringing that to us, Julia Borsden. Coming up, tired of chasing AI and big tech, our market. Navigator says dividend growers may be the way to cut your risk without sacrificing returns, his top picks right after that. All right, time for your market navigator. And your guest today is here with advice for keeping your equity exposure, but minimizing risk and collecting a dividend check. David Bonson, his chief investment officer at the Bonson Group.

David, welcome back. You're looking at consumer staples, in particular two P names, Pepsi and Procter gamble, why those two? I picked those two for today just because they happened to be down over the last quarter and a lot of investors are looking for things that are in a distressed value position, not riding a momentum wave. They actually had a very good first quarter, but have reverse course here right now. And I just think that these are long-term values, long-term dividend growers. By long-term, Brian, I'm talking about 50, 60, 70 years of consecutively growing their dividends. Yeah, and is this, are they going to give us some capital gains as well, David, or do you think this is just going to be an entirely a dividend story? Because, you know, I'm told these AI things seem to have a lot of investor attention. Pepsi and Procter & Gamble, as far as I know, are not AI stocks, at least not yet.

Well, for one thing, the AI stocks are going to crash and burn if Pepsi and Procter Gamble do not benefit from AI over time, because at the end of the day, even this great AI transport. transformative moment has to matter to the regular companies of the world that are using it, that are getting efficiency, driving productivity, et cetera. I would think that would apply to companies like Pepsi and Procter Gamble. And so I do think there's an AI angle, but it's not an AI momentum trade. You're most certainly right about that. And I think that's a good thing. I think that a lot of investors probably from a risk management standpoint want something that is not connected to the euphoria of the moment. David Bonson of the Bonson group, look at Pepsi and PNG, home of the Swiffer.

David, appreciate it. Thank you. Coming up, the crypto summer bummer, Bitcoin's pullback continues as the market struggles to break out of this crypto winter. Next, the names that are also getting burned in the crypto-related space. All right, welcome back. We're going to talk about crypto for a second because Bitcoin prices are down. In fact, they just kind of keep going down. Cryptocurrency has fallen below 70,000. For the first time since April, many crypto-related names have been hit. Actually, Robin Hood, Coinbase, Circle, all in the red, and checkout strategy, formerly known as Micro Strategy.

That company on pace for its worst day since February, after announcing it sold $2.5 million in Bitcoin. Million, not billion, not a lot. But the last time they did that was after FTX collapsed in 2022. Yeah, no, it's got to make a name for itself here quickly. more power lunch after the short break. Powerful move for many nuclear stocks, Constellation, Tallinn, Oaklo, New Scale, uranium energy. They're all higher. It's on news that U.S. energy regulators have agreed to speed up reconnecting and thus restarting the power plant, formerly known as 3-mile island.

That puts it, Kelly, back on track for a restart next year, and kind of a sign that nuclear is back in favor. That's a big deal. We have so many gigawatts of power that we need for the AI buildout. Meantime details now in that story I mentioned top of the hour. A New York City bar is offering a bold Knicks promotion. If the Knicks win game one tomorrow night, every customer's tab is on the house. But to protect itself from the potential financial hit, the Jeffrey is placing a $5,000 hedge on Kalshi. So, Brian, if the Nix win, customers get free food and drinks, but the Kalshi payout will help cover that cost. Full disclosure, we have a partnership with Kalshi. And speaking of basketball, Steph Curry has a new shoe deal. And it's not with Nike's a deal. or Under Armour, he signed with Chinese sportswear giant Li Ning. The brand has a huge presence in China, a much smaller footprint here in the U.S., and it comes just months after Curry and Under Armour announced they would end their longstanding partnership. Look how much that's for.

It's got to be for a lot of money. You know, NBA has had this fractious relationship with China. This was under a microscope a few years back. It's a big deal for him to choose to double down on that. I wonder what they pay their workers. Good question. What are they paying him? What are they paying them?

There you go. Thanks for watching Power Lunch, everybody. Closing bell starts right now.