Power Lunch - Markets rally after Pres. Trump signs Iran deal memorandum 6/15/26

Episode Date: June 15, 2026

The Dow Jones soared to new all-time highs on Monday as the other major averages traded higher across the board following news of a preliminary peace deal between the U.S. and Iran. Dominic Chu and Kelly Evans break down the market action with Charles Schwab’s Liz Ann Sonders, Neuberger’s Jeff Blazek, and Bank of America’s Savita Subramanian. Meanwhile, Micron added to its recent rally with a near double-digit gain after TD Cowen raised its price target from $660 to $1,500, and the analyst behind that note joined the anchors to explain his methodology Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And markets are definitely in rally mode today. Welcome to Power Lunch. Alongside Dominic 2, I'm Kelly Evans, and we're higher across the board on a potential deal to end the war in Iran. We'll have full markets coverage of this story today with Savita Supremanian, head of U.S. Equity Strategy at B.A., Liz Ann Saunders, the chief investment strategist at Charles Schwab, and Jeff Blazek, the co-CIO of multi-assad strategy at Newberger. All right, plus one stock that's rallying today, Bigley, is Micron, up more than 800 percent over the course of the past. year up another 10% today. T.D. Cowan's raising its target price to $1,500 per share,

betting that AI's demand for more memory is just getting started. We got the analysts behind that big call coming up, Kelly. But let's begin with the record rally. The Dow touching a new intraday high after President Trump announced a preliminary peace agreement between the U.S. and Iran. As a result, Treasury yields are also sliding. About 446 at last check there for the 10 year. ahead of the big test for the markets, Kevin Warsh's first Fed meeting as chairman.

Joining us now to discuss is Jeff Blazac. As we mentioned, he's the co-CIO of multi-acet at Newberger and Lizanne Saunders over at Schwab. Jeff, I'll start with you. You're right here. Welcome. Thank you. And the joke is going around, but it feels so true. Whatever the geopolitics is, it seems like the memory trade is ripping.

Whatever, you know, tie this all together for us in a way that makes sense. Does it have anything to do with that? this deal being potentially reached today? Is it because of how well the SpaceX IPO went? Is it none of that? Well, this deal being reached clears the stage, and now we can focus on this massive AI infrastructure buildout, and we do think there's more legs to the infrastructure to go. So I would say that the step function up we're seeing in earnings justifies these massive upward moves we're seeing in the prices, and so we think there's a lot more to come. All right, a lot more to come. We're at 7560 for the S&P 500 right now, so what does that mean?

Well, the S&P 500 trades at 21 times earnings. That is about as affordable as it's been since COVID. And it's because the E and the P.E ratio is growing faster than the price. And so until we see any kind of deceleration in earnings, we're at a 25 to 30 percent run rate right now. We don't think this is going to stop anytime soon. Lizanne, I want to toss this over to you as well, because one of the main reasons why we are seeing that move higher in the markets without any kind of multiple expansion is because earnings growth, has been as robust as it has been. Is there anything that you can see from your standpoint, knowing what we know right now, that is going to be a hiccup or a speed bump for that earnings growth? Or can we continue to see that? And maybe even with possible Fed rate cuts, now that the war in Iran has taken an incremental step better, that we could actually see multiple expansion at some point in the coming months and quarters. So, Dom, I think in the aggregate, there's nothing near term that suggests a worry to forward

estimates. But I think you could have hiccups to use your word like we did a couple of weeks ago when we got a somewhat negative announcement from Broadcom and that caused a hit at least on a very short-term basis. And we're in such a rapid fire rotation-driven kind of market right now. Things can turn on a dime where you're seeing the rotations more interestingly now is not just at the broad asset class level or even among sectors, but you're seeing it inside sectors below that level at the industry level. And I think that kind of backdrop, which is a little bit more fine-tuned in terms of where risk might creep in and where you move quickly to some sort of risk-off mode, I think it's via process of rotation versus an aggregate concern for the

market broadly or for earnings broadly. Lizanne, could I follow up there? If you weren't seeing that, where are you seeing some of the most profound or notable under the surface moves within some of those key sectors, is there anything that stands out to you with regard to some of that kind of movement under the currents? Well, one perfect example would be there's still a little bit of an obsession about the Magnificent Seven. I think it's just human nature for us to think in cohort terms. But that really, that cohort of stocks has really drifted pretty far down the performance ranking spectrum. You know, only one of the seven stocks is actually in the top 10 best contributors to S&P performance, but contribution comes as a function of the multiplier of the cap size.

The best performer, price performer, among the Mag 7 is alphabet, and it's ranked 166th in the S&P 500. So we have this shift now toward different cohorts, leaving some of the, what are arguably still favorites and still in the zeitgeist, a bit behind. So that's just an example of a rotation. went away from what had been this sort of group of darlings. Jeff, there are some who would look at, you know, 21 times on the S&P, and I take your point that that's cheaper than it's been in a while, but it's not that cheap.

And the market cap, I think, relative to GDP, you know, some of these traditional kind of ways that people use to say, has it just gotten too big? I think those give people a little bit of pause. Just curious what you would say about that. Yeah, I mean, it depends on how far back you go on the relative cheapness, because I do think 20 times when you consider the return on equity, which is so high for the U.S.

market, creeping up towards 30%, very high margins. I think that informs a higher PE that is justified. By the way, Lizanne brought up a really good point, though, about the Magnificent Seven and how it's breaking a bit as a leader of the market. There's also a breakdown of correlations among those stocks. And so this market is now pivoting and being led very much by tangible infrastructure tied to AI. I think the hyperscalers that dominate the Mag 7 are, there's a lot of questions about return on investment in the long run. And so all these coming back to the 21 times, you know, there's a mosaic of a lot of different companies that comprise that. But we do think in general it's still attractively priced. You know, it's interesting because, and I'll ask us maybe of Luzan first, because you brought up some of those under the current movements here. There's a new acronym out there. Have you heard this, Kelly?

Mango. There's mangoes for sure. Wait, is there a new? There's another one out there. It's called Fab 10. FAB 10. So it's Frontier AI, Big Tech, 10 stocks. It would be the MAG 7 plus SpaceX, the anticipated arrival of Anthropic and the anticipated arrival of Open AI, FAB 10. Lizan, is it going to be the FAB 10 market for the foreseeable future, much like it was the MAG 7 for years leading up to this point? I'm not so sure if the FAB 10 includes the MAG 7 versus some of the more recent leadership areas that bring. the memory side of thing. So we may just need to rethink who sits in these acronyms, as opposed to just adding a few to an existing acronym. Yeah, I agree. I mean, is Micron in that Fab 10? Because it should be, right? And so I think that, you know, I think this is sustained demand for these very short-supplied components. That's the thing that gives us so much confidence is that the demand for compute, the demand among the end users is high. It's not abating yet. But let me go back to

to Mag 7, which goes back to Fang, which goes back to single-A-fang, which predate. That was like a 15-year trade. I mean, that was, you tell me, what would you say, early 2010s to kind of early 2020s? Does Micron have that kind of staying power? Yes. I mean, it's been around a long time. And by the way, some of the Mag 7, the Mag 7, I think, was actually created about five years ago. But it was, we had like the Fangs and the FanMag and all these other horrible.

Mag 7 stuck because it was very catchy branding. But, you know, some of those stocks like Tesla, you know, the EV market is really in a lot of, you know, disarray, we could say, at a minimum. There's even discussions that it might get merged into SpaceX. So it may not be eligible as part of the MAG7 if it's not listed as a standalone company. So I do think that Micron, I could make a case as more interesting as a Mag 7 as a benchmark sort of name relative to somebody. But for years, like for five years. Because the reason why I keep pressing this point is that the price and everything goes, going as well as it could for Micronite. And it was wonderful. But you know how cyclical it's been in the past.

And I know people say it doesn't have to be that way now. That's fine. I don't know the answer to that. But if you're right and it becomes the new Netflix or whatever, you know, meta, the new micro, I mean, those are big analogies to make. And those are companies that dominated for a long period of time. Very true. But the hypers are going through their own churn as they're digesting new cash flow uses. They're now blasting it into Cappex, not buying back their shares. So there's a chance that Micron could look better than some of the hypersquillars when we look three or four years in the future. Lizanne, with that in mind, you have to have favorite parts of the market right now. What are the types of things in that kind of broader trade that you see people rotating to

that has more of a secular feel to it and less a tactical one? Well, I would answer by mentioning factors as opposed to sectors. I think we'll continue to be in a rotational market. And it's going to be tricky to kind of nail sectors with any longevity. But I think the factors that make a lot of sense right now would be those forward earnings estimates, that glide path higher, stability, if not growth and improvement in profit margins. But some reasonable price component to it. So almost sort of old school GARP. I would also agree with Jeff about valuation.

I don't think 21 as an aggregate PE ratio is all that stretch. But I would also say that valuations of any variety are a. terrible market timing tool. They literally tell you nothing about what the market is going to do, say over a subsequent one-year period. If you've got a 10-year look-forward period, then you connect the dots a little bit. But valuation should not be used as a getting get-out mechanism for the market, not that anything should. I think it was Michael Sembolist at J.P. Morgan who coined MagS7. And it was a Western movie from like the six. It was. Yes, it was. But the hilarious part of it, how many people survived? Oh, I think three of the cowboys did not make it credits.

But a fantastic movie. They did a remake, by the way. But maybe a poignant finish, given what we're talking about now, who's going to, which of the MagS 7 survive? And another overarching risk that I would highlight is the net supply of equities versus demand via buybacks, because there is going to be a pivot. So the hypers, as we just said, they're spending a lot more on CAPEX. But this issuance and unlocked shares that will come from the IPOs, we are seeing a pretty big change in terms of the net issuance of equity. and that could be a technical overhang on the market. Some point and over. Yeah, exactly.

Really fun. Thank you guys. Appreciate it very much. Jeff Blazac and Lizanne Saunders. All right. Speaking of issuance, the world's biggest publicly traded company is taking its investment grade credit rating and tapping the bond markets

to raise another $20 billion in capital. InVIDIA shares are on the rise alongside the rest of the market, as you can see right now. But it's the fixed income headlines that are getting some of the attention today because the computer and artificial intelligence chip giant is planning the capital

raised with seven separate tranches of bond issuance, with some maturities for some extending out to the year 2056. Now, this would be the first time Nvidia has accessed the investment grade market since June of 2021 when it raised $5 billion during that particular issuance. So we are just getting started right now. Micron has been one of Wall Street's hottest names with shares up more than 270% this year. And our next guest believes the stock's best days are still ahead of it. the big call of the day coming up. Plus, markets may be at record highs, but Bank of America's flagging a number of red flags that have emerged for technology and equities. Seveda Supermanium is down to here to break down all those warning signs beneath the surface. So keep it right

here. That story's coming up next. All right, shares of Micron, as you can see, are soaring following a bullish call on Wall Street. TD Cowan's more than doubling. It's a fact that it's almost two and a half X emerging the target price to $1,500 per share, citing strong demand. for memory storage. The analyst behind that call is joining us now, TD Cow and senior research analysts, Chris Sankar, who made that call. It's byrated. It went from a 660 price target that has now been surpassed by a lot to now a new $1,500 price target. So take us through the math behind what gets you from that old 660 to the price it is now, to the price where you think it will be at 1,500, Chris. Yeah, sure. Thanks for having me, Dom. I think there are two things. One, it's fundamentally

when you look at it, the demand continues to be strong. It is increasing, driven by leading to ASP increases. So you've seen two things happen. One is the underlying AI demand, which has been turbocharged by more demand for CPUs, which have more DRAM attached because of agentic AI and things like that. So fundamentally, that's driving demand, which is helping ASPs. Secondly, I think we also begin to see a re-rating. You know, into the print last time, Microsoft was trading at almost four times earnings. Now it's probably trading it eight times our numbers, probably 10 times consensus. But we do think that there's a re-rating happening. Part of it, I would say, also probably started after Sandysk last quarter talked about their LTA structure with like a flow growth margin that

brought a little more durability to the earnings forward for memory companies and therefore a rerating, slowly re-rating that's happening. All right. So take us through for the viewers and listeners out there who have not yet seen and read through the research report, because I have it right here, I've kind of gone through it. Take us through the re-rating rationale. We kind of understand what the reasons are there. But this is a stock that trades at 11 times forward earnings right now, which people say is a great discount compared to the broader markets 21 times earnings that we just talked to Jeff Blazek and Lizanne Saunders about. What exactly then gets you to get the multiple higher on some of these names, the justification for a product that has been called commoditized in other

cycles in the past. Yeah, you know, Micron and memory companies are being called different names, right? Commodity, deeply cyclical, like, you know, things like that. What has changed, I would say, historically in memory, what you have seen is pricing goes up, margins go up, earnings go up, or vice versa. Pricing comes down, so do margins and earnings. You never see stability in pricing leading to durability of earnings. And I think that's something you might start seeing today.

And what happens so far is the risk. the market had on the earnings power, it assumed its peak earnings. Therefore, I'm going to put a drop multiple, given it's a cyclical business. And that's how the market has been viewing it since I would say probably until end of April. Since then you begin to see a slow re-rating that's happening, where as people get more insights into the stability of these long-term agreements, the durability of earnings and pricing, I think that's when you get like a massive re-rating. To your point, you're still probably trading at like, you know, 50% below, like some of the

cheaper, more inexpensive AI peers. But I would say you have definitely seen a slow rerating like three or four turns in the last couple of months. But I think it's largely given by the fact that, you know, some of these NTAs underlying demand is looking good for the next couple of years. Historically, you know, there has been always that question on pricing peaks and the stock speak. But this, Chris, this feels like one of these as good as it can possibly get moments. Is there anyone left on the street who's not super optimistic on the stock with a high price target and the same kind of thesis? You know, Kelly, like I had a company seeer tell me that, you know,

typically when you say the cycle is different, it has a negative connotation, instead he framed it as this cycle is definitely much bigger. So I would probably say that, you know, you are seeing like potential for hyperscalor capics to be even stronger in 27. From a demand standpoint, it looks good into 27 and 28. Who knows beyond that? But I would say that basically tells you that there is a lot more underlying demand strength. And as you can see, first you saw the GPU's driving memory.

Now you're seeing the CPU's driving memory. But underlying as long as the hyperscalator and the AI trend remains robust, I think memory has a huge role to play in it. And that's going to help these thoughts. The cycle is bigger. I'm going to borrow that. That's interesting way to frame. I'm not going to talk about the bigger they are, the bigger they fall.

That's for maybe, you know, I don't know when. Don't be so pessimistic. Just saying. Chris, thanks very much. A few years, hopefully. Chris, thank God. We appreciate it. And there's still a lot of optimism left on Wall Street, with the Dow hitting a record high on these AI-fueled gains.

But our next guest says there are some red flags. We'll ask B of A's Savita Subramanian right after the break. Yes, we are at record highs for the Dow today with the 600-point rally. It's a nearly 2% gain for the S&P and about 3% for the NASDAQ. But not everyone on the street is convinced that this pop today is a sign of more good times ahead. Our next guest has a 7100 S&P year-end price target. joining us at Seveda Subramania. She's head of U.S. Equity Strategy at Bank of America. Savita, I wish you could have been there for the first discussion because we needed a counterpoint, okay?

The first two discussions. The first two discussions. I'm convinced. I'm totally convinced the it's the earnings. It's the, what did you say, the return on equity for the stock market is so high that the multiples is the lowest it's been since COVID. It all sounds fine to me. So what is that argument missing? Yeah, let's talk about it. So look, I'm not outright bearer. on stocks, and I think there are a lot of really great places to go within the S&P 500. If you had to buy one index today, I would buy the Russell Large Cap Value Index. But I do think that we are at a point where it's really difficult to continue to clock gains from here. And the reasons are manifold. One, I mean, the good news is priced in. Typically, years where you've got great earnings growth and GDP growth are not the best years for equity.

returns. Two, you're starting to see multiple compression in areas like tech. We're seeing supply demand dynamics change. I know we've all been talking about that recently, but even at the beginning of the year, we started to see buybacks slow down demonstrably within certain areas of that hyperscalor space. The shrinkage argument seems to be behind us rather than ahead of us when it comes to public equity availability. So supply demand, not great. And then on top of that, I think the liquidity spigot is slowly being turned off. And think about it. This year, we started the year expecting Fed rate cuts. We started the year expecting central bank rate cuts. What are we getting? No rate cuts. And I think that is very important to think about because last year was essentially

the best year on record when it comes to liquidity. Everybody was buying equities. You had individual investors, you had corporate buybacks, you had privatizations, you had the government was buying U.S. equities, everyone was buying U.S. equities. And this year, I think we're getting a little less of that liquidity machine, and we're also getting a big shift in supply demand. So that's why we're bearish at an index level. Within the index, like I said, I think there's a tremendous opportunity to own income, value areas of the market that are throwing off capital, other than using it. But I'll pause for a breath there.

No, no. No, so Savita, I want to bring this up because out of all those things you said, we did have earlier today, we had, you know, again, earnings have been incredibly strong, right, at this point, up nearly 30% in the first quarter. Ed Yardini was on Squatbox this morning and said it's fueling the rally. So here's what he said. Take a listen. I've been among the bulls and I haven't been bullish enough.

I mean, it's really extraordinary. We've been in what I call not a FOMO market, but a FEMO market, FEMO meaning fabulous earnings momentum. Earnings have been unbelievably strong. There is no doubt, Savita, that we are no longer at the war lows in March, where we don't have a low base to build gains off of, to your original point about, you know, the good earnings years, not being the best years for stock returns.

But we do have markets at our near record highs and earnings momentum, as Yardini points out, to justify it. So is there a reason why we show? I shouldn't think that this could at least continue, not off like a rocket ship, but still continue the way that it's been going. Look, I think that it can continue, and earnings, if they continue to surprise, can fuel added gains. But how much more can earnings surprise at this point? Also, when you look at where we've seen the biggest earning surprises this year, it hasn't just been technology. It's also been energy.

It's been materials. It's been mostly semis within tech. So, yeah, I get it. Earnings are great, but I don't necessarily think this is a market that sets itself up for more positive surprises, given that analysts are now forecasting close to the highest long-term growth rates in earnings that we've seen in the history of our data. So this is the thing. The market doesn't necessarily react to earnings as they happen.

It reacts to surprise on expected earnings. Let's think about what's expected. We're expecting 22% earnings growth. I think it's going to be an awesome year for earnings. But I don't know if we're going to continue to see those really strong positive surprises that have driven the market higher. Think about what's driven the market over the last few years. It was a surprise around chat GPT. It was a surprise around coming out of COVID.

It was a surprise around stimulus coming from the government or from the Fed. those levers, unless they get re amplified, are not coming back unless we get chat GP2, chat GPT part two. Our view is, you know, where the surprise is going to be. Maybe in, you know, energy holding up better than we thought it would post a ceasefire, maybe in financials actually starting to enjoy lending growth. You know, I think the economy is doing great. I like cyclical companies with a tethered.

GDP. I like companies that benefit from earnings growth, but those aren't necessarily the biggest parts of the S&P right now, and that's why I worry about the index. And Sivita, before we let you go, one place that could be a surprise-ish on a relative basis is on the macro side with regard to interest rates. Kevin Warsh, very much in the spotlight right now with regard to Fed and Fed policy and the trajectory of Fed policy going forward from a strategist standpoint, just how much do you have to look to the Fed for any change in your models? Yeah, I think that's a really good question. I think where we could see a positive surprise is if we see a big Fed pivot and a move back

to easy monetary policy. We don't think that's going to happen. There's still really healthy inflation. There's, you know, GDP growth is at a reasonable level. Our economists are not forecasting cuts this year. The first cut they're expecting to happen next year. So if we do see that pulled forward, that could be another liquidity positive. So that's something to keep an eye on.

I also think that sentiment, while it's not necessarily bearish, is not at euphoric levels on the overall market. So there is still a lot of cash sitting there on the sidelines, that's $7 trillion or so that could move into parts of the equity market. I personally don't see it moving into tech because everybody already owns tech. I think it moves into dividend yield and inflation-protected income for retirees, which is what they really need at this point. All right. A fascinating conversation. Thank you very much. Savita Subramanium of Bank of America with one of the lower price targets on Wall Street right now.

Let's now get over to Contessa Brewer for a CNBC News Update, Contessa. Dom, a federal judge today dismissed a lawsuit brought by Elon Musk's XAI against Open AI. Musk and XAI accused the rival AI company of stealing trade secrets, claiming former employees at X&E. AI took confidential information, including source code, from the Grock Chatbot, when they left for jobs at OpenAI. The Supreme Court today denied an attempt from former Trump aide Carter Page to revive a lawsuit against former FBI director James Comey and other top FBI officials. It concerns warrants they obtained during the probe into Russian meddling in the 2016 election. Page served as an informal foreign policy advisor to the 2016 campaign last month.

The Justice Department reached a separate settlement with Page for $125 million. And Tyra Banks filed a defamation lawsuit against Netflix and the directors of a docu series about America's next top model. Banks created and hosted the show, of course, and claims that her interviews for the program were edited and manipulated to support a false narrative. The defendants have yet to comment on the suit. That's basically a wrap-up of all of the legal action, the litigation, in the world happening today, guys.

That's a lot. That's a lot. Contessa, thank you so much for that. After the break, President Trump in France for the annual G7 summit after the U.S. and Iran moved closer to ending the war in the Middle East, what it could mean for global security, energy markets, and of course U.S. foreign policy. We got that coming up. Brookings, Michael Hanlon joins us with his take.

Coming up next. All right, welcome back. President Trump is in Europe meeting with world leaders front and center is the preliminary deal with Iran. Our Megan Kinsella joins us now from Geneva, Switzerland, for the latest details there. Good afternoon or evening, Megan. Hey, good evening, my time.

Good afternoon. Your time, Dom. Yes, that's right. President Trump is just about an hour's drive from where I am, just around the lake in Evian, France, where he's now having a working dinner with other G7 leaders.

And of course, top of mind is this Iran framework deal. And all day, we've heard from President Trump himself, from Vice President Vance on CNBC, as well as from some U.S. officials on background about this deal. We're trying to piece together what exactly is in it.

And a few of the things that we've learned so far. One is that President Trump, Vice President Vance, and the Iranian parliamentary speaker have already signed this deal electronically. They did that on Sunday. So something is already in place. Part of what it does is it enables a toll-free reopening of the Strait of Hormuz. That starts immediately, although they acknowledge, these officials acknowledge, it will take some time for traffic to ramp back up. Sanctions relief for Iran will then be performance-based. They emphasize no money has been unfrozen or exchanged just yet. They're waiting for Iran to take some steps to change its actions.

And a signing ceremony is going to be held on Friday, most likely right here in Geneva with Vice President Vance, potentially coming over to represent the United States delegation. Now, while we're trying to figure out exactly what's in this deal, we do expect now, the US says they will be releasing the full text of this memorandum of understanding. But we don't know exactly when. Could be as soon as tomorrow, according to one official,

or perhaps after that Friday ceremony, that was according to President Trump. But all of that does mean, of course, that there are still a lot of questions. and there's still a lot of room to run in terms of figuring out the trickiest parts of these negotiations. That's Iran's nuclear program and that's all of this financial relief for Iran and what exactly would unlock it. Vice President Vance told us on CNBC a lot of this still has to be hashed out, acknowledging the difficulty. So here's how Iran is framing this. Just in the last hour

or so we got a new statement from Iran's president, Peseshkian, writing on social media that, quote, what has been agreed upon is an important step towards stopping the war and begin negotiations and a final agreement has yet to take shape. So just emphasizing there, guys, just how much is left to go. Now, G7 leaders are, of course, talking about this all day. We saw them putting out statements and making comments about welcoming this news. But just like we are guys, they too are also looking for further details. While the markets are rallying on this, there's still a lot more to be worked out. All right, Megan, thank you for now, Megan Kosella, as the sun starts to set there in Geneva. The key question remains is the lasting deal with Iran truly

possible. Our next guest is slightly hopeful the existing framework can work, but acknowledges it could fall apart again. Let's bring in Michael O'Hanlon, chair in defense and strategy at Brookings. Michael, it's great to see you again. Let's actually start with a piece of this we haven't talked about yet this afternoon, which is, you know, this aid or this win, what's the right word for what Iran could receive monetarily speaking from the terms of this deal as we know it? Greetings. Well, it sounds like anywhere from 12 to $22 billion in frozen. Iranian assets may be made available relatively soon in a process with that funny phrase, performance-based interjected just to make sure that it's not automatic or immediate.

As I count them, there are five big issues that are unresolved, and you just alluded to one. There's obviously the nuclear issue. There's the Lebanon, Hezbollah issue, and Israel's role there. There's the ongoing missile question of Iran's missile capabilities. And then there's its longstanding ongoing support for militias in the region, Hezbollah, Hamas, the Houthi, etc. And I guess if we're using letters, we could call that the 3H problem, not the militia money and munitions or missiles problem. But there are at least five things to be negotiated. And the reopening of the straight is welcome news, but of course, just the first step.

I know we heard last hour that potentially they would be looking at other options. people in the region may like better. This was a language that contacts used with Megan as it relates to whether tolls would be reimposed or not. They said it sounds like it kind of depends on what people in the Gulf would deem acceptable. Who knows? I mean, the idea is an ethema to most American strategists

and most American shippers and purveyors of commerce because free global ocean shipping has been seen as one of the bedrock elements of the post-World War II economic and legal order. On the other hand, if there were some kind of a temporary mechanism to help countries in the region recoup losses from the conflict, and this was seen as, you know, an assistance package for that transition period. Maybe you can finagle something with the right semantics that doesn't seem like such a contravention of those principles we've all espoused for so long. I think it's going to have to be. be pretty temporary and pretty limited, but we'll have to see. Israel is not happy. We're told even

the Europeans are being a little more hardline than the U.S. on sanctions relief. Yeah, I don't know about that one. We'll see because, of course, the Europeans largely stuck with the 2015 nuclear deal way after we did. But I think that Israel, obviously, is in an entrenched hardline place, which is understandable, but I don't know what their theory of success or theory of victory really is. They've already taken out the top couple echelons of most of the Iranian government. So at what point are they going to have succeeded well enough? They think that the fourth or fifth or sixth echelon is going to be any different. I think that's, you know, a fool's errand. It's not a realistic strategy for success. And so at some point, you're going to have to give Iran some access to some of its money or there's

just not going to be a deal. And you've got to go for goals that are attainable, not ones that you'd like to have, but are more in the fairyland category. Hey, Michael, it's Dom. It's maybe safer to say the things are no longer on a hair trigger. at this point, but in your mind, what could happen that would upset the balance of all of this stuff that's been worked for over the past couple of weeks? Well, one thing would be, for example, if the United States insisted that all Iranian nuclear technology of every single type has to be permanently eliminated, destroyed, or shipped out of the country. I think there's a lot of room for negotiations that would limit Iran's ability and make sure it doesn't get the bomb

while we're watching and still allow for a resumption of air strikes if they break out of the agreement. But if we really insist to the principle that President Trump has often espoused that Iran can't even have a single centrifuge, for example, can't do any enrichment, I think that could be a showstopper as just one example. All right. Michael, thanks very much. We appreciate it. Thank you kindly. All right. We got some good news ahead of the holiday weekend right now. The national average gasoline price is closing in on four bucks a gallon. It's now at its lowest level since late April. And get this, gas prices have now fallen for 25 straight days. That is the longest streak of consecutive declines in regular unleaded gasoline going back to November of 2023, Kelly.

And today's drop in the oil price probably gets us closer, maybe even below $4 a gallon. Coming up, Fox, making a $22 billion bet on Roku. It's big for them. It's almost the same market cap. And that might explain why their shares are down nearly 17% on that news. What the deal means for the battle for the future of the living room is next. Welcome back to Power Lunch. Merger Monday is in full effect today. A big one in the media space being announced this morning. Fox has agreed to buy Roku for $22 billion in a mix of cash in stock. You can see the market punishing in a big way. Fox for it today. Roku shares are flat on the day, but its stock popped 20% on Friday when the rumors had swirled about Roku being in talks to sell itself to another media company. Fox shares are down nearly 17% right now. Joining us now is Mountain.

CEO, Mark Douglas, Mountain works with companies to place and analyze their digital advertising across publishers and different streaming platforms, a key voice to talk about this deal because, Mark, this has been tagged as all about the streaming platform. So take us through what this deal is for you and what it means for the business overall. Well, let me start with the business overall for Fox. I think the deal, when I look at it, it seems to be pretty simple. Fox wants more users. The advertisers want scale. And I'm talking like the big global advertisers. And getting into the 200 million user mark puts them in, I think the top three, certainly the top four streaming platforms. And it just elevates them into a new tier.

So even though the market is down for the deal, down on deal, I assume, because they think it's expensive. it elevates Fox into the league with Disney, Netflix, and, you know, HBO, Warner and Paramount, if that merger complete. So I think it's an important deal, and ultimately they'll be proven validated by doing it. It must be strategically vital, Mark, because their market caps are almost the same,

especially after Fox is selling off today, about 22, give or take each. I mean, it's really almost a merger. It's, it's, so what, just say it again, because I want to make sure I'm tracking. What does Fox see? I mean, does it think by combining with Roku that it can take on the likes of Disney and the others? And the weird thing about this is, in a moment, it comes at a moment.

Netflix has not been doing that well. Obviously, the investment required for some of these streamers is, it's a lot. It elevates them. You know, you can think in streaming there's a new club. I'll just refer to it. I've not heard this before, the 200 million user club. And it elevates them into that club. And for them, that's must have.

I said when Roku, when Netflix was looking at, you know, I believe it was Warner, that was a nice to have for Netflix, because they were already there in the hundreds of million users, but it was a must have for Paramount. And I think for Fox, this is kind of a must have, whether it's Roku or someone else, to be above 200 million users to stay as a primary platform to buy ads on. their primary platform from subscriptions from users. And so I think it's really important. I don't think it's the last thing also. I don't think they're picking up a ton of original content, and that's still a missing part of their strategy, and that's still going to be needed maybe through some other acquisitions in the future.

Mark, this is all a platform kind of driven deal, right? And we're talking also about this kind of mix of stuff we have between premium video on demand versus ad-supported video on demand. How exactly does this kind of? of combination, if it comes to fruition and happens, what exactly does it do to the mix of business there at the new combined company? And how does that A-V-O-D versus P-V-O-D kind of market shape up against all of the other bigger competitors out there? Well, I think the Roku piece is really interesting. First off, Roku, you know, kind of really, I mean, they're your TV for a lot

of people. And so it kind of gives another avenue to get Fox a more prominent placement to potentially get more subscribers. I also think for advertisers, and this is more psychological than definitive, I think Roku kind of has more the cachet for advertisers. So, you know, I stated it as like Fox now picks up, enters the 200 million user club. To some extent, I think it's going to be viewed by advertisers as Roku does. And so, and Roku kind of becomes the lead in this deal. And maybe, you know, that doesn't necessarily determine the economics of it. You know, Kelly's saying it's almost like a merger, but in some ways it could be perceived that non-financially, it's almost Roku acquiring Fobb. And I think it's again, yeah, I think again, it's really critical. I mean, the Can Lion is next week in the south of France is the biggest show in advertising.

And I mean, this deal is obviously going to be talked about. And I would imagine Roku's going to be the one. saying we now are going to have access to 200 million users. We just doubled the reach of Roku is going to be as much of the talking point as Fox saying the opposite. And we'll see when, as you said, that's right around the corner if we start to hear more elaboration on exactly the timing and the reasons for it. Mark, thanks very much. Thank you.

Mark Douglas of Mountain. Coming up, a look at today's other biggest movers and some stocks making big headlines right after this. As our country celebrates its 200, 150th anniversary, CNBC spotlights the leaders driving business and the nation forward. I think American business really is about freedom, what this country is about. And when I say freedom in business, what I mean is the freedom to pursue your ideas, freedom to be successful, the freedom to fail. The founding fathers were almost all entrepreneurs and businessmen, and it probably is that kind of mentality that let them build such a great system of governance, all the founding fathers.

and what they did, like, it's just remarkable. Wasn't the risk they took in going to war with the British, but then the thoughtfulness and how they all wrote the Constitution and the Bill of Rights and, you know, really came together in a way to set up the fabric that's existed for 250 years. I mean, there's just been nothing so durable and important to the globe as what the founding fathers gave us 250 years ago. I think America's superpower is freedom.

Freedom in a way that's never existed anywhere else, in the world. And when you give people freedom, it unlocks all the human potential as possible. With markets at record highs, at least the doubt today, let's check on some of the biggest movers. We already mentioned Fox, but there are some other big movers too. Like the chip in memory names, those are leading the way again. Western Digital, Seagate, AMD, Sandisk, record highs for all of those names leading the S&P and the NASDAQ 100 today. SpaceX also doing quite nicely. It's about 16 percent, as you can see on the right of your screen there, after its 19 percent pop last week on the IPO. CEO Elon Musk saying over the weekend, the company could generate a trillion

dollars in annual revenue by 2030. Maybe that's behind the optimism. The company reported under $19 billion in revenue last year and has yet to turn to profit. It's about at this move, SpaceX, just for context, with a 16% move above yesterday's, two point, just shy of two and a half trillion dollars in market cap. So it's added around 750 billion in market cap and two days, which is like adding an entire ASML almost to the market cap. Double trillion? I mean, this is at this point, if there's too many zeros to count, but an interesting move, Kelly. More parallel to the break.

All right, welcome back. A quick programming note before we go to the next show here, we got a big show coming up tomorrow. Anne Walth, Ann Walsh, CIO of Guggenheim Partners, Investment Management, is on deck. Also, Chip Brewer, CEO of Callaway Golf on deck. Doug Petino, the CEO of the Commercial and Investment, Bank at J.P. Morgan and Evan Spiegel, CEO of Snapchat as well. All of those, Ann Walsh, Chip Brewer, Doug Patno, Evan Spiegel, all coming up, Kelly, tomorrow. Got to get our beauty rest. There you go. Meantime, a reality check on the scale of Elon Musk's

wealth, which we were just talking about. We said on Friday, he became the first person ever to reach a trillion-dollar net worth. We want to kind of put that in context. His fortune is now greater than the combined wealth of the next four wealthiest people on the planet. All right, so is the Crypto winter over. An analyst from Standard Charter seems to think so. He says the Bitcoin may have bottomed out at $59,000. But before Standard Charter can confirm, the firm would like to see this. Strategy, buying more Bitcoin, a positive crypto-etf inflow day, and then lower oil prices as well. Bitcoin has erased more than a third of its value over the course of the past year. So Bitcoin, it's interesting, whether or not those ETF buyers are going to step back in and

allocate to it even after what we've seen in terms of price action. Yep, exactly. Just going back to SpaceX, biggest day of retail net buying for an IPO in history, 117 million. Surpassing Coinbase. That was the Vanda Research. Interesting for sure. I think it's one of those, just how much market value can it go higher before things stabilize. I know. Everyone's watching. It keeps rising. Don, thanks very much. We appreciate it. Brian will be back tomorrow. Closing bell starts right now with Scott Wapner.