Power Lunch - Oil Markets & Geopolitical Risk, Fed Shake-Up: Impact on Rates 8/8/25

Episode Date: August 8, 2025

CNBC’s Tyler Mathisen and Kelly Evans take you through the heart of the business day bringing you the latest developments and instant analysis on the stocks and stories driving the day’s agenda. ���Power Lunch” delves into the economy, markets, politics, real estate, media, technology and more. The show sits at the intersection of power and money. “Power Lunch” gives viewers a full plate of CNBC’s award-winning business news coverage, plus a healthy dose of personality from the show’s anchors and the network’s top-notch roster of reporters and digital journalists. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Power Lunch alongside Amy Jabbers. I am Morgan Brennan. Your money and the markets. Stocks are positive to end the week with the big tech back in the driver's seat, leading to charge. Palantir following a blowout quarter, which we brought to you in overtime on Monday. And Apple on pace for its best week in five years. Your next tech move is coming up. Plus, the future of the Fed two names emerging this week that could reshape money policy, the path of interest rates and market expectations. Now, your commodity playbook, oil, seeing its worst week since June, but gold is shining. Hitting a new record high today, RBC's Haleema Croft will break down her strategy and fueling America's demand for energy.

One Silicon Valley startup signs a massive lease with the U.S. Energy Department to build uranium enrichment facility in Kentucky. The founder behind that company is going to be with us today. But let's begin with markets. Mike Santoli joins us to lay out the week ahead. Mike, what's coming up? Well, I mean, I think the big thing that we can identify AIMA as coming up is certainly the CPI report next Tuesday. Probably going to start to hear a little more from some consumer and retail companies as well. And it's going to perhaps crystallize this debate that the market's been contending with, which is, you know, we've observed slowdown in the labor market.

We got over the shock of last Friday's payroll report, largely with the help of some of those more defensive, popular big tech names that really have managed to support the index this week, Even as we've sidestepped all these hazards, whether it was the imposition of those official tariffs, because the market is seeing them as perhaps negotiable to the downside over time, or because they're going to be absorbed relatively painlessly. And then also these big kind of earnings-related blowups you're seeing with extreme stock reactions. The way the market's responding to all that is to say we can basically hide in some of the largest NASDAQ stocks. Don't worry too much about the negative patterns in August historically. At the same time, we believe that any weakness in the economy can be rescued by now higher expectations for the Fed coming to save the economy and the markets with some rate cuts.

That all works together pretty well if it plays out. Now, whether next week's CPI complicates the picture with a higher headline number that makes it uncomfortable for the Fed to feel more dovish remains to be seen. The market seems to believe we can get by that in particular with oil sliding the way it is. You know, Mike, the White House, we were just talking last hour. The White House argument is that, yes, we might be seeing some higher prices as a result of tariffs, but that's not going to set off inflation. It's a one-time only thing, and it's going to, you know, go away, basically, as we move past the tariffs. Is the market buying that argument?

Is that an argument that's winning the day today? Market is increasingly buying that, or is at least warming to that idea. Now, part of it could just be, well, we haven't really seen it in a comprehensive way. We got it in core goods inflation, but that's not really a driver of necessarily overall self-sustaining inflation, right, after that one-time bump. So I do think the Fed is understandably, at least the leadership of the Fed, has been understandably hesitant to ease into an above-target inflation regime, right? That's where we are right now, until or unless it feels as if the risks to the labor

market started to outweigh that. And, you know, we can make the case, and many are making the case, that the Friday jobs report last week did, in fact, tilt things in favor. certainly the market's starting to price things that way. Okay. Mike Santoli, thank you. All the major averages are higher right now and actually on track for the S&P to have its best week since June as well. So while growth has outperformed value so far this year, our next guest says that it's

time to move away from large cap tech stocks. He sees better value in midcaps and here to explain why is Vahan John Jingyenne. He's chief investment officer at Greenwich Wealth Management. joins us now. Vahan, it's great to have you on and let's start right there. Why midcaps? Why now? Hi, Morgan. Okay, so first thing I would say is that for the past 100 years, until about 2008, value has outperformed growth and small cap has outperformed large cap. So small cap value has been a good place to be. Starting in 2008, we had that financial crisis and we had unprecedented intervention by the Federal Reserve. We saw interest rates go to zero. And nothing that used to work the way it used to work works anymore. I mean, I kind of just

that today people read Ben Graham's, the intelligent investor, to learn what not to do rather than what to do. So I think that we've seen a situation now where growth has been outperforming for so much. It makes sense for people to rotate a little bit into other parts of the market. A lot of people just, you know, without thinking, put a lot of their money in the S&P 500. But the S&P 500 can no longer be considered a broad-based market index. You know, not only do the top 10 stocks account for 40% of the weight, but the top half, 250 stocks, account for 90% of the weight. So I think it makes sense for people just for diversification purposes to be thinking about other areas. Yeah.

I mean, there are some signs of euphoria, arguably in this market. Case in point, the city's Lefcovic index, that gauge recently hit Euphoria territory. Valuation. U.S. market's cyclically adjusted price to earnings ratio is now higher than it has been 90%. 98% of the time we're approaching tech bubble peak. What do you attribute the excitement and I guess this, it's not even climbing a wall of worry. We're hurtling a wall of worry with investors right now. Well, I think a lot of investors, especially the younger generation, are basically following momentum strategies. So they're looking at what's working and just piling in and driving that higher. And, you know, momentum is a good way to invest. And there is academic evidence that momentum actually works over shorter periods of time. But, you know, momentum is, you know, momentum is a good way to invest. And there is academic evidence that momentum actually works over shorter periods of time. But, in this case, momentum has been working for quite a while. So I'd be a little concerned about going into those areas. But as far as, you know, the market being overvalued or not being able to go

much higher, I would just remind people that I think it was in 1996 when Alan Greenspan said, talked about irrational exuberance in the market, yet the market continued to rally for about another five years. So even though it looks like the S&P 500 in particular is overvalued, that doesn't necessarily mean it won't go higher. Vahan, the thing that's been hanging over this whole market all year has been the tariff debate coming out of Washington. And I wonder if you're looking at midcaps, I haven't thought of this, and maybe you have. If you look at midcaps versus the large caps, is there a breaking point of how those two groups deal with the tariff impact differently? Are the midcaps more vulnerable to tariffs?

Well, you know, most smaller companies tend to generate most of their revenues within the United States, but that doesn't necessarily mean they're not exposed to tariffs. Because like all kinds of companies, they rely on foreign manufacturers. So I don't believe they're less immune to tariffs than the large-capped stocks are. So are they then less able to handle it, maybe? The large-caps have just a bigger base, and they can take the hit in a way that mid-caps can't. I think investors have reached that conclusion, and they believe that the larger companies can handle it better

and perhaps absorb more of the cost and even pass on some of the costs. perhaps not directly by raising prices of things that are not necessarily impacted by the tariffs. Yeah, mitigation. That's been the word of the earning season on conference calls. To your point, well, let's talk about names that you do like in this market right now. Well, you know, one stock I really like a lot. It's a large cap of value stock is Verizon. You know, this is a stock that pays a very generous dividend. It's been increasing the dividend every single year for the past 18 years. and believe it or not, it's actually outperforming the SMP 500 so far this year. You know, earlier this morning, I decided to just take a look at Verizon and compare it to Palantir,

which is one of the hottest stocks in the market. And it's really interesting. You know, I do believe it makes sense to pay more for growth, but the big question is how much more should you pay for growth? You know, Verizon already has 40 times the revenue that Palantir has, and it's selling for only nine times earnings, whereas Palantir is selling for something like 285 times earnings. So I think it, you know, as I said, it makes sense to pay for growth, but I think we've reached the point where it no longer makes sense. So I would rather be in something like a Verizon right now, but you have to be patient with it.

Yeah, if it doesn't make sense, you better stop doing it. Vahan, thank you, Vahan, Janjingian of Greenwich Wealth Management. And now over credit markets, two big auctions this week, revealing week in the week, investor demand for longer-dated bonds. The weakness points to rising concerns about U.S. fiscal outlook, stubborn inflation, and the potential for larger deficits as Washington ramps up borrowing. Now, throw in the escalation in the tariffs and the potential showdown with Russia. All that leads the Treasury to entice investors to buy U.S. debt. But the weak's auctions may seem like a routine government funding exercise.

They could reveal something deeper, a market that's nervous, demanding more compensation for risk and increasingly wary about what lies ahead. Well, we've got lots more show to come. Here's what's on the menu. First, President Trump nominating a Fed critic to the Fed. Plus, back to school and the consumer. You can call it recess because we've got some stock plays for you. And we will speak to the CEO of one company that wants to help resure uranium enrichment. Stay with us. And welcome back to Power Lunch. President Trump announcing a temporary replacement for Fed Governor Adriana Coogler, who unexpectedly resigned last week. The president's saying on truth social, Stephen Myron, head of the Council of Economic Advisors,

is going to fill that seat until the end of her term, which is January 31st of next year. In the meantime, he's going to search for a permanent replacement. And meanwhile, the race to succeed Fed Chair Jerome Powell continues with prediction markets favoring Fed Governor Chris Waller over the other top candidates, the Kevin's, NEC director Kevin Hassett and former Fed official Kevin Warsh. Now, our next guest says the markets would be happy with either of these compared to the unexpected out-of-the-box nominee that you could see. So joining us for more now is David Zervos.

He's the chief market strategist at Jeffreys and a CNBC contributor. David, I wonder, you know, knowing the president and how he operates the way you do, I wonder if you think that the president is getting some leverage here by nominating Myron just for that temporary position. until January. Does the president then have leverage over him, even though Myron is a Trump guy? You know, he's going to, if he wants the job permanently, he's going to have to watch how he votes, won't he? I mean, I think everyone here in the contest, if you will, is under the spotlight. And I think the administration is going to look at how people perform what they say,

how they're reacting to the economy, the data, and how, in this case, with Stephen, how they're voting. So, sure, I think it's all part of a process that's going to kick off in earnest in the fall and probably end sometime around the Coogler Seats decision in January. Yeah, so we've got a wall graphic here that we can show with all the candidates on it. You've got the two Kevins. You've got Chris Waller. And then you've got, if you look at that right, I don't know if you've got it. see it, David. That right-hand shadow person is we're using that to illustrate the idea of a

mystery candidate here. It looks a little bit like Elizabeth Holmes from Theranos to me. I don't think that's what we're suggesting here. But the question is, who do you think has the lead here? I mean, you know, Warsh, very respected among Fed Watchers, has it, you know, very close to Trump sort of puts a smiley face on the Trump economic policy, sells them on TV very well, the president thinks. I mean, if you're looking at this and you're a betting man, who do you think as the lead. So I'll go with how you opened it, Damon. I think all of these candidates have, you know, are going to be welcomed by the market and to some extent welcomed by the Federal Reserve system. You know, Kevin Hassett's a very well-known character in Washington, D.C., very talented

economist, great on TV. Kevin Warsh, same thing, and obviously was in the building for a very long time. Made some friends, made, made, I don't wouldn't say enemies, but probably made a few foes along the way as he left. He left under a little bit of a sort of thumping of the of the desk that he wasn't a big fan of QE. But I think there's a lot of respect for the views of all of these characters. And Chris, as well, has really stood out and I think had differentiated views during the rate rising and now during the rate cutting. So I think he hasn't been afraid to sort of stand his ground and have a strong opinion that was different than the group think. And I do think all of them bring something very important to the table, which is a kind of

of break in group think, which is what I think Stephen has also said as a problem at the Fed. And I would agree with him is a problem at the Fed. I think diversity of opinions important. And you really have four folks, if you include Stephen in that, that are going to bring, I think, a fresh look at policy to the table, which is a good thing. Yeah. I mean, Steve Myron has done a lot of work looking at the dollar, David, and looking at trade and tariffs and helping craft policy around that. So when we talk about group think, Is there too much group think around the topic of tariffs? I think there was.

I think the street got so freaked out, April 3rd and 4th, and they couldn't get themselves. And then into the second week of April, they couldn't get themselves around the idea that this was a tactic. It was a traditional Trump tactic to go big, go to destabilize your opponents in the debate, and then try to get them to the table and create an outcome that was more beneficial for. yourself. And I think that's exactly what the president did. I think it was very much art of the deal. And those that believe that it was art of the deal, not like a final. So we're going to end up at these very large tariff numbers, but this was just a negotiating tactic. I think those people did pretty well in the April, May period. The ones that got a little too lost in the exact

numbers and didn't think about tactics are still licking their wounds and probably will be for the rest of the year. So I think Stephen brings a lot of a lot of new thinking to the table. It'll be fun to watch his confirmation hearing. It'll be fun to watch how he votes and how he dissents if he dissents or how he decides to side with Mickey and Chris. And I just think, I think it's going to be an exciting time to watch the Fed. And I think it's a very important time for the Fed because the board is about to shift into a world where you're going to have very likely four Trump appointees by May of next year. So the dominant force on the board is going to be a Trump force. And that's a very different board from where we've been at any time in the past.

Yeah. In the meantime, David, a lot of dovish Fed speak this week on the heels of that jobs report last Friday and a market that's basically pricing in near inevitability that we're going to get a cut come September. How do you invest right now, given this climate? Well, I think the market is recognizing something that a lot of, you know, a lot of the anecdotes, a lot of our corporate clients were telling us at Jeffries, as well as what we were seeing in some of the other data, that policy is restrictive. And the Fed didn't really want to admit that. They've been talking about higher neutral rates and things like that. But I think, you know, the average of 33 or 34,000 jobs created over the last three months really hits home. And it hits home pretty hard.

And I think that's why that September hike is priced the way it is. I think that's correct. I think you could make an argument that if the data get a little softer, and we have another 30 or 40,000 print and the CPI is within a normal band, people will be pricing in the potential for a 50. All right. David Zervos of Jeffries. Thanks for joining us.

Always a pleasure. And now to a development on gold, the FT reporting that the White House is going to issue an executive order clarifying the U.S. stance on gold bar tariffs after a ruling that a widely traded form of the precious metal is subject to levies, sent shockwaves through the bullion market. Gold is trading near session lows. And Morgan Gold has been rocketing this morning on this report. And now down this morning on this new report, it's been a wild one for the gold market. Yeah, I mean, we're up something like 30% in gold future since the start of the year. And that's after a gangbusters performance for the commodity.

last year as well. Gold miners also reaching a multi-year high earlier in the session. So we continue to watch this. We'll talk about it a little bit more in the hour. But in the meantime, uranium fever. One company aiming to bring uranium enrichment, nuclear fuel, back to the U.S. We're going to speak to the CEO

of General Matter. That's coming up next. Welcome back to Power Lunch. All of the nuclear energy ambitions to power AI data centers and this new era of U.S. manufacturing hinge on a critical supply, nuclear fuel. Here's the hitch. In 2013, America closed the Paducah gase diffusion plant. This was the last plant enriching uranium in the U.S., losing that capability to produce nuclear fuel and establishing greater reliance on other countries, including Russia for it.

Our next guest is leading a major push to change that. Scott Nolan is the founder and CEO of General Matter, a venture-backed company that, with the blessing of the Department of Energy, just broke ground this week on a new private venture at the very same facility. Nolan is also a partner at Founders Fund, and he joins us now. Scott, it's great to speak with you. Thanks for having me on. So let's start right there because this is going to be the first in the U.S. privately owned and operated uranium enrichment facility. How is this going to work? So, yes, earlier this week we announced a lease at the Paducah site at Department of Energy. And at this 100 acres on a multi-decade lease, we will be developing a new uranium enrichment capacity before the end of the decade.

It will be operational. And so the goal of this facility is to displace enrichment that we get today and import from our adversaries. And so we want to make the U.S. self-sufficient like it used to be. Do you already have end users for your fuel? We do, yeah. We're in discussions with utilities, with reactor vendors, about off-taking the fuel that we're producing. This fuel that we're making is low-enrich uranium at this site, potentially HALU, which is for the more advanced reactors. but we are really focused on the 20% of the grid

that comes from nuclear and supplying those 94 reactors as soon as possible. Now, I know we're talking about nuclear power right now, but in some ways, and I'll say this because I know you formerly worked at SpaceX, so you might appreciate this analogy. But it makes me think about when the space shuttle was retired and the fact that the U.S. did not have the capability to send Americans into space, and SpaceX stepped in,

crafted this public-private partnership, regained that capability, And in the process, also took over and reimagined a very famous launchpad, 39A, at Kennedy Space Center, to do it. Is this sort of the nuclear equivalent? Yeah, it's a very good analogy. So back then after the retirement of the space shuttle, we were completely dependent on Russia to get cargo to the space station. And so SpaceX worked with NASA very closely to do a milestone-based program to bring back that capability. The North Star for SpaceX at that time was, yes, we want to bring back domestic capability.

Yes, we want to replace this capacity of the space shuttle. But longer term, we wanted to make space launch affordable and get a lot more space activity, commercial space. And so we're doing the same thing for nuclear energy. Yes, we want to onshore production, but we want to do it much more affordably and also more scalably to achieve the U.S. goals to 4x nuclear by 2050. And so those are the things we're focused on with this site really being the first site that enables it. Scott, you're hitting your stride at a moment when the administration is really pushing nuclear hard. They're big believers in this White House of your industry.

What have your interactions with the administration been like so far? What are they telling you? Very supportive. The administration's very focused on energy growth. You have the National Energy Dominance Council. You know, the NEDC has just focused on energy as this key piece for all the U.S. strategic ambitions, whether it's AI, manufacturing, economic competitiveness. We need energy at the base of that, and there's a strong focus on dispatchable energy. So, a baseload energy

with nuclear really being the bipartisan solution for that. You just use the word affordably. What does that mean? How do you make this more affordable? And how do you make this, I guess, a compelling and profitable business model? So there's two pieces to that. One is the reactors that are on the grid today, those reactors provide 20% of the nation's power in every state. And so the issue that there is availability of fuel, last year there was a Russian imports ban that went active. There is a waiver process to import uranium, but that expires in January, in 2028, January 1, 2028. And so on that side of things, we are really focused on availability. For the future reactors, fuel is actually typically more than half the total cost of electricity production.

And so we're focused on bringing that cost way down with enrichment as the biggest segment of that. And so there's both an affordability, scalability, and cost issue for today's reactors and then for the future reactors. And so I think a lot of people understand today that nuclear is the safest and cleanest form of base load power. But it hasn't been the cheapest. And so what we're trying to do is help make it the most affordable, baseload, clean, safe energy source so that we get a lot more of it, just like we saw in the space sector by bringing launch costs down. Yeah, the safe piece of it, though, I mean, it had a bad wrap up until very recently.

And we've seen a little bit of a 180-degree turn here in terms of public sentiment. But just the safety piece of this, what goes into that? So, I mean, this is something we're the most excited about is just the safety of nuclear. Yes, it had a bad rap. There are decades where we just abandoned nuclear, and we view that as a huge mistake that the U.S. made. You just look at the empirical data, and per megawatt hour power produce,

it's safer than anything else. It's probably tied with wind, and so wind and solar. And so, yes, it's tied there with safety on the carbon side, carbon emissions tied there as well, but the big difference is that it's baseload. And so on the reactor side, that's even with the old generation reactors, Generation 2. The newer ones that are coming in the next five years that I think we're going to see a lot of deployments are even safer than that.

They use different fuel. They use passive safety methods. And so we expect that safety edge to get even bigger to where nuclear will be by far the safest source of baseload energy. And so that's on the reactor side. On our side, what we're running is basically a separation refining process. There's no nuclear reactions. There's no chemical reactions. We are simply separating material.

And so the DOE did a study on environmental impact of this in addition to the safety and concluded that this not only is it safe, but it has load to no environmental impact. So, you know, the community in Paducah, where we are bringing back U.S. enrichment is aware of this. They were doing it in 2013. They're the most familiar community in the country. And their support with our announcement on Tuesday was really, really amazing. All right. Scott Nolan. It's great to see you. Congratulations on the news, founder and CEO of General Matter.

And Morgan, for folks who are in the gold market right now who are following this news up and down on tariffs and how that impacts the market. I've just been texting the White House during this segment, getting a sense of when this executive order is coming. I'm told it's not coming this hour, and it's probably coming, it could be coming possibly today. So we might not get that news until after the market closes today. And what we're told from White House official. Sounds like you need to stick around for overtime. That's right. I'll be here. What we're told by a White House official, though, in terms of the content of this,

they're going to issue an executive order in the near future, clarifying misinformation about the tariffing of gold bars and other specialty products. The misinformation, the new information in the market has been that they will tariff. So maybe this EO will say they're not going to tariff or maybe not as much as the market expects. Either way, not coming this hour and maybe not coming before market closed today. And meanwhile, President Trump's deadline for Russia to make peace with Ukraine has arrived. Will we see a deal or our sanctions coming? We'll discuss all that next.

And welcome back to Power Lunch. Oil is on pace for its worst week since the end of June. Now, this comes as a White House official, says a summit between President Trump and Russia's President Putin is tentatively scheduled for the end of next week. Today also marks Trump's deadline for Russia and Ukraine to end the war or face additional sanctions. Now, here to discuss all of this and the impact on energy is Halima Croft. She's managing director and global head of commodity strategy at RBC Capital Market. She's also a CNBC contributor.

Halima, we've got this big set piece next week. First of all, where do you think it's going to be? We don't know what to look at a location. We don't know where it's going to happen. I suspect it will not be in a NATO country. I would look to the Gulf. I would look to potentially Saudi Arabia where there were other rounds of talks. UAE is basically the front runner, I think, to host the talks.

Mohammed bin Zaya, the ruler of UAE was just in Moscow. So the question is, will this be the place where the negotiations take place? Yeah. And then the question is, if there's a place, is there a deal, right? Does this mean that somehow behind the scenes something is teed up and solid enough that both sides feel it by meeting they can get it across the finish? Well, it's interesting you say both sides because who will not be at the negotiations? Will Zelensky be at the negotiations? This is a U.S.

Russia deal. But, you know, you think about it, Zelensky may not be there and the Europeans may not be there. And a lot of the sanctions architecture, you look at oil being off today, there's this anticipation every time we talk about U.S., Russia talks, oh, the sanctions are coming off. But the issue is a lot of the sanctions architecture, particularly related to energy, was put in place by the Europeans. So the Europeans will have a lot of authority and discretion over when the sanctions come off. Yeah, and they're not going to like this. And that, I want to go back to what you just said with the role of the Europeans and the Ukraine war here, because that factors into what we're seeing with this additional 25 percent tariff on India.

too and perhaps why India is reacting the way it is. A hundred percent, because you think about the Europeans went forward in the summer of 2022 saying we're not going to take any more Russian oil. Like we hear Zelensky, we're not going to provide the ATM for the war. We're not only going to ban Russian oil imports, seaborne oil imports, we're still going to ban European services to move those barrels anywhere. The United States actually panicked. Janet Yellen was like, I don't want three million barrels of Russian oil off the market.

We came up with price caps to have been able to move those barrels that we're going to, going into Europe into places like India. Now we said you have to pay less than $60. India's like that's great. You're going to give us discounted Russian oil. Fantastic. We'll back up the truck. And Indian imports of Russian oil have climbed by about a million barrels a day since the start of the war. But again, they weren't breaking any rules. They were actually doing everything United States wanted. So now you fast forward to where we are now. We're telling India, we're going to hit you with like much higher tariffs going forward if you don't stop taking Russian oil and they're like, wait a second, you flip the script on us. Like, why should we have to now

not take this oil? So in the meantime, if you look at crude prices, we're basically range bound and down. Why is that? I think we're down today because we're not getting the 100% tariff pronounced that we thought we might be getting today. Instead, we're getting, we're meeting next week, we're having talks, is there a deal? Our sanctions coming off Russia. Again, though, we're getting ahead of ourselves because the Europeans are not at the table. They are the ones who done the most significant energy sanctions. And by the way, here's another little problem with thinking about Russia and oil returning to Europe. We just announced a trade deal with Europe. As part of that deal, 750 billion of purchases of U.S. energy over three years, again, wildly ambitious

number, who is the U.S. going to displace into Europe under this deal? It's going to be displacing Russia. And the question is, how do you square more U.S. energy going into Russia? With Russia deciding they're going to end the war, Russia's going to want sanctions off and they're going to get their energy back into the European market. So there's a lot that still needs to be worked out. So much at stake next week. So much at stake. Helima, thanks for being here. Thank you for having me. Well, let's get over to Julia Borson for a CMC News Update. Hi, Julia. Hey, Morgan, Ukrainian President Volodomir Zelensky said this afternoon that Kiev and its allies

shared an understanding it is now possible to achieve a ceasefire with Russia if adequate pressure is placed on Moscow. He made the comments today after the White House said, between President Trump and Russian President Vladimir Putin is tentatively set for the end of next week. The Texas House still lacked a quorum this afternoon as it convened for a vote on new congressional maps. Only 95 members showed up today shy of the 100 needed to enable a vote. Texas Democrats have fled the state in protest of the redistricting plan, which would create five new GOP-leaning districts. And all records on the COVID-19 vaccination status of federal employees will be scrubbed. The Office of Personnel Management said this afternoon the move comes in response to recent litigation challenging the Biden administration's former vaccine mandate.

The agency says the change is also part of the Trump administration's effort to reverse, quote, harmful pandemic era policies. Morgan, back over to you. Julia Forston, thank you. Up next, August, angst, concerns about the strength of the country. consumer. That's been front and center this earning season. What does that mean for back to school shopping? Power Lynch. Be right back. Crypto watch is sponsored by crypto.com. Crypto.com is America's premier crypto platform.

Welcome back to Power Lunch. The clock is winding down on somber. Oh, really? And that means we're in the middle of back to school shopping. Consumer spending during this period will be another valuable piece of data for investors as economists and the Fed tried to get a and exactly how the consumer is holding up. Early estimates from a top retail analyst are indicating a more subdued back-to-school spending season that sees shopper searching for value and sticking to the necessities. Though she does see a slight uptick in spending from 2024. Joining us now is that analyst.

Chelsea Advisory Group Chief Research Officer and CEO Dana Telsey. Dana, it's great to speak with you today. Great to see you too. Thank you so much for having me. Okay. The fact that you're expecting at least a little bit of an uptick from last year signals what? I think it signals, first of all, you have earlier school start dates, so people are starting earlier. You have more tax-free holidays around 95 days with the extensions of Florida and Ohio versus 67 last year.

And guess what? Consumers are starting earlier. It's been all over the news, as we all know, their prices are going up, so they're all trying to take advantage of the value that's out there. So I think the earlier shopping, the earlier school start dates, more tax-free holidays led to that. And look at what we've heard from earnings season so far. Sales have been pretty okay because you have the lower priced inventory. It's all about what's the price is going to look like when we get to the fourth quarter. Okay. So if we're talking about value for consumers shopping for back to school, what's the value for investors? What do you buy here? I want to buy TjX. I'm getting value there. I want to buy Walmart. And when I think of other items or what a brands are working, I think Levi's is working. I think Abercrombie still hasn't outperformed yet, but certainly makes it. a recovery. I think you're getting on running and you're seeing improvement there and take a look at Birkenstock. You have new closed-toed shoes that are driving sales.

Dana, help me understand this. We've seen this, you know, sharp moves in some retailers over the past couple of days as they announced the impact of tariffs on their business. But, you know, the tariffs have been out there for a while. And everybody knows which companies are big importers. Why are we seeing such sharp market reactions at a time when, you know, you could say, all that information was already in the market and should have been maybe priced in. You're absolutely right. When you're seeing some of these moves and these stocks, you have two different schools. There's one where there's tariff fatigue from investors and saying, what are companies going to be doing that will drive sales going forward?

Also, you have companies, as they've reported second quarter numbers so far. They've been pretty good, better than expected. And even the sales results going into the current third quarter are maintaining the momentum. So I think you're seeing some of that. I think the sharp moves on the downside is about companies that have performed. Well, if they're talking anything cautionary, then wait a second, is the future not going to be as good as the past? So there's a real twist in turn between some turnaround names and those who have had momentum. The future is never as good as the past.

Hope. Let's keep watching because we've got to see the fourth quarter. You know, I just got to ask you, I realize you don't cover this name directly, but, I mean, a huge move today. in Under Armour this morning. And one of the takeaways was that North America results were below consensus in terms of next quarter guidance, also below the street, management citing potential demand and cost impacts from tariffs. I just wonder if there's a broader read-through from this name or if this is company-specific. I think more of its company-specific. Obviously, you've had some of the athletic wear names like Nike and like Under Armour, each going through their own transformations.

you've definitely seen more competition from newer brands out there, like the ons and like the hokas. And you know what else you've had? You've had a return to some of the fashion footwear that's out there also. Just like you've seen some of the active wear have slower traffic trends or moderation, you've seen jeans and fashion footwear perform a little better. Okay, Dana Telsey, I've Telsey Advisory Group. Thanks for joining us. Thank you for having me.

And still to come here, we'll get you a power check on Apple, that company, making a ton of headlines this week. We'll break down that name and a whole lot more coming up next. And welcome back. Let's get a power check on some of the key stocks making recent headlines. Invida in focus here. President Trump promising tariffs on semis. Tesla says it will now use Nvidia chips, among others, for its computing, plus AI power player Vistra missing on revenue, falling a bit lower. And finally, we have Apple. Lots of focus around Tim Cook's relationship with President Trump. week. So joining us now on set to discuss her strategy for these names is Jessica Inskip, the director of investor research at stockbrokers.com. Jessica, a huge week for all these names.

Let's start with Apple, just because I'm from D.C., and that move with the president this week was so interesting. What do you think Apple was able to gain here? Absolutely. Well, I think overall with these names, I'm seeing that the rally is really narrowing towards technology, and actually these names have three things in common. One is artificial. intelligence, too, is the trading cycle is all very bullish, and they all surpassed a very key area of resistance, which is fantastic from a price perspective. And the third is actually potential partnerships. So Apple's is rumored with perplexity, which is really outside of Tim Cook's and Apple's normal strategy. They like to have things in-house, but they are becoming

behind an AI. And I do argue if the tariffs was great. That is a very more certainty. The market It does not like uncertainty. If we can get clarity within tariffs, we can plan accordingly. That would be good. But I'm thinking about iPhone cycles, even though I see this pull forward in demand, my concern is what is the next catalyst? And then I believe that the best thing for them is this acquisition or this partnership, rather, with perplexity.

That would be very good for Apple. Yeah, it seems like the market's giving them a lot of credit or giving Cook a lot of credit for playing this perfectly with the president this week. I agree. He's playing nice, and that's what we need to see. Play this next deal. perfectly too. Okay, so let's talk about Vistra, because the AI infrastructure play has been a big one for the past call it one or two years. Where does it go from here? Yeah, so they did miss on earnings,

but they also gave us reaffirming of forward cash flow. They also did of EBITA, which is fantastic. And they also have a pipeline or a deal within Texas. And if that goes through, we're going to see more data center demand. So that is good. It's all within the AI narrative. And again, I think that's the theme because the market is getting rather, rather narrow, and AI will hold up, and this is a beneficiary of that. Disaggregated, share everything, architecture. You said it. I did. I did. I didn't even stumble. This is what we need to spend time on and talk about. So this is a rumor with NVIDIA, but NVIDIA is software. They sell their chips. They sell software and they self-networking. They do have a moat because of these layers, but this disaggregation.

Shared and share everything, which is from a company called Vast AI, will actually widen that mode, if you will. So what that simply means, when you purchase the GPU, you also have to purchase compute together, but you may not use both of them. So it's actually thought of a great analogy with this. It's like using your data center, but you have your own house. We're building condos with data centers now. So now we can share. So if you're buying these GPUs, you can get more bang for your buck because you're, you can your buck, because you're building. you do not need to utilize or buy additional compute.

So that is another layer that could just really intertwine and send Nvidia higher, as if they didn't need another catalyst being this mega cap that it is. But Nvidia's up so much already, right? I mean, is there that much running room left, even with these innovations that you're talking about? I absolutely believe so. It's, one, we saw what happened with fiscal policy. We got clarity with that. That was an influx of cash instantly into the hyperscalers,

and we see that they're spending it. And that also happened with the bill. There's some tax implications. That's also an influx of cash. They're spending it on V-Di-A. And VDia now is creating this ecosystem where it's not only are you buying my GPUs, you're buying the software.

You need this to make the model. You need this to train the model. You need this to service the model. And if this expansion happens with VAST AI, this will absolutely be huge for them, because now it's another layer that you are required to have, including even reoccurring services licenses.

That's big. I learned a lot here. Jessica and Skip of stockbrokers.com. She's the director of investor research there. Thank you very much. Thank you. Well, as we had to break, be sure to follow and download the Power Lunch podcast. Catch audio-only versions of the show anytime you want. We'll be right back. Well, before we go, we want to highlight Firefly Aerospace. Take a look at the chart on your screen. It's down about 16.5% right now. It's trading about 50 bucks a share. The company debuted on the NASDAQ yesterday. It opened at $70. a share when it started trading. And it really continues to be a test for the IPO market. So this was the latest one to come in 25 times over subscribed yesterday. IPO priced above the already upwardly revised range. They actually upsized the offer. That's been happening in a lot of the IPOs we've seen to date.

Renaissance Capital, Amen, saying that 126 IPOs have priced so far this year. That's up more than 50% from the same period in 2024. So we're certainly starting to see more companies. come public. On tap next week, you're going to have two crypto names, very buzzy fintech names. You've got bullish and you've got Miami International. And we know looking at Michael Novagrats' Galaxy Digital and E. Toro and some of these and obviously circle that crypto's done really well. And there have been these reports that the president wants to IPO Freddie and Fannie at some point. Yes. That would be a big test for markets. You've got to think. Yeah. Yeah. And certain, speaking of crypto. But yeah. But yeah. But, but. But,

Yeah, that's obviously that one's been rumored, and we're getting more reports today, so maybe sooner rather than later. Yeah. Other things sooner rather than later to watch for, keep an eye out over the weekend for this gold executive order from the White House. It feels like that's coming. It feels like they might be signaling to the market. We're not going to put those tariffs in place, at least the way the market interpreted, they were going to do it today. Yeah. And, of course, we've seen gold has just had this record run, and we've come off a little bit with your reporting earlier in this hour that this executive order was coming.

But in general, as you've seen an exodus out of the dollar, out of treasuries, as you've seen tariffs and trade policy evolve here, gold has continued to shine. Yeah. And so if you don't like gold, where do you go? Do you go back to crypto? Do you go back to treasuries? I don't know at this point. This has been fun. This has been fun.

It's been great. All right. Well, I will see you all on overtime. But in the meantime, thanks for watching Power Lunch. Closing bell starts right now.