Power Lunch - S&P 500 declines as market comeback pauses while traders wait for more trade deals 6/11/25

Episode Date: June 11, 2025

Stocks wavered on Wednesday, as the market’s recent run higher took a breather, as traders weigh a preliminary U.S.-China trade deal and new inflation data. We’ll tell you all you need to know. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

And welcome to Power Lunch, everybody, alongside Kelly Evans. I am Brian Sullivan. Lots of show ahead. The president saying a deal with China is done, but what does a deal actually look like? Plus, a new fiery Wall Street Journal piece highlighting how much money some in Congress made in the stock market during the tariff volatility. It's your outrage du jour. And finally, we're going to get some insights into the AI space from a certified disruptor. First, let's get a check on the markets, which it's hard.

hard to describe. Look at the action here. A few moments ago, we were higher across the board in its session highs. Now it's only the Dow. Dow's up 100 some points. The S&P's fractionally lower. The NASDAQ is down about two-tenths. We've got this possible trade deal, as mentioned. We've got better than expected inflation data this morning, way better than expected. All of that feeding through to lower bond yields. But again, stocks are tempering their enthusiasm at the moment. Quantum computing stocks, keeping an eye on those after CEO of NVIDIA Jensen Wong says that technology is at an inflection point. It's got Cuban on the move up 29%. Raghetti up 11. Ion Q, interestingly, is lower. Over in the traditional space, IBM is trading around all-time highs and on track for its ninth straight

day of gain. So it's not just bleeding edge technology, no offense to IBM. And finally, a high flyer worth flagging, nuclear firm Aklo soaring after they were chosen to supply power to a U.S. Air Force base, Brian, in Alaska. Shares are up 27%. That is a big, big gain. Good on all the ACHLO investors that are out there. All right, we've got a lot more to do, but we're going to begin with the headlines on the trade front. The U.S. and China have outlined a framework of a big trade deal. To be very clear, there is no set deal yet. Remember, any actual agreement would have to be approved by President Trump and President Xi Jinping of China.

But on the surface, this appears to be a positive development for the administration. Commerce Secretary Howard Lutnik weighed in earlier today on CNBC. We're in a great place with China. Really, really feels good. Now, President Trump's got to approve the final wording. President Xi's got to approve the final stuff. It's not really wording. It's really the deal.

But both sides are really positive. I mean, I feel great about it. All right, so positives there, but there's still much to be done. The U.S. wants to sell China more goods and help as Treasury Secretary Scott Bessett says, rebalance the global economies. Now, for its part, the Wall Street Journal. reporting that China will, for now, enforce a six-month limit on export licenses for any rare earth or critical minerals sold to the United States. It would do that to keep some flexibility

and power in its pocket just in case something goes wrong. So what would a trade deal actually look like? And what is the best outcome for you, the investor? Let's talk about all that. And bring back our friend Michelle Caruso-Cabre, CEO of MCC Global Enterprises, and a CBC contributor also here, Ed Mills, Washington Policy Analyst at Raymond. James, I love it now, Michelle, because I can ask you to editorialize. Are you surprised the market is not reacting more positively to, I thought, was supposed to be a positive development? Yeah, we got positive developments regarding trade today, and we also got very good inflation data as well. So you would expect perhaps we'd get an even bigger rally in the stock market.

That would suggest a lot of it was priced in that a lot of people were assuming, and a lot of investors were assuming that the worst was over in April when we saw that big, big decline. And like we talked about yesterday, the assumption was things will not get worse, they could get better. If they did get worse, the market was off sides. But I think the market's telling you today that a lot of this was priced in. And Howard Lottnick hammered that on the interview this morning on CNBC saying, you know, Chinese tariffs are not going up from here. This is it. That gives a lot of certainty to manufacturers, importers, et cetera.

Ed, how are you thinking about it? Yeah, so a lot of the questions we've gotten here at Raymond James is exactly what does the president mean when 55% remains. And what we've heard is that that's the 20% fentanyl plus the reciprocal plus the 232s. These are pretty high tariffs still. Going forward, are we ever going to get the details? Maybe, but not any time soon. What I'm really focused on is what can happen next. And we have a G7 meeting that's occurring in Canada. Can we get a lot more good news? Can the market react to that going into the week next week as that starts on Sunday, Kelly. Right. So that said, is the market basically just kind of buying the rumor selling the fact here, Ed?

I think that the market wants more information. I think that there was a bit of a concern that the first reaction was we agreed to go back to what we agreed to previously, that if all we're getting out of this is what happened in Geneva, is that enough for the market, Kelly? Or do we need more? We have a lot of questions at Raymond James about the new restrictions on chemicals, on jet engines, on the Huawei Ascend chip. What have those come off? I think that the Ascad ship is probably the question that I get the most from clients. And that's really important to the semiconductor space. Do we see that restriction stay on? Back in Trump 1.0, they always made sure there was a distinction between the national security lane and the economic lane. Right now, if you put a lot of these export control, into these negotiations, that is bringing those two together. That could be a huge problem for this administration on Capitol Hill, because, again, going back to that first administration, when there were a couple times, when they veered into the national security lane for these negotiations, Congress came back and told Trump no, and they passed new legislation. Congress right now is considering legislation to go much harsher on tech export controls, especially on semiconductors. The more he includes this, the greater the risk from Washington on that sector actually occurs.

And I find that fast. You just said that the question you get the most from people is whether they can have access to Huawei's ascend chip. I mean, that's extraordinary. I just talk a little bit more about that. Well, it really goes into the question as to how far we are going to restrict U.S. technology that is going into China and how much Chinese technology can be the base technology for a lot of the rest of. of the world. What we've seen from U.S. companies and those who use U.S. technology is a question on whether or not if we restrict it too much, are we cutting off our nose to spite the face? Are we giving an unintended consequence where China can start to rise? And so having the Huawei Ascend chip restricted globally was one of those ways to kind of cut off some of those restrictions. and is really a question on how aggressive this administration is going to get coming from here

on semiconductor, on semi-cap equipment, on different EDA software that goes into China. The more we restrict that, the more this market is really concerned about what Trump does next. By the way, speaking of technology, Microsoft stock hired today and at a new all-time high, just a little nugget there. I think, though, the administration, Michelle's goals are bigger than just slapping attacks on Huawei. You heard Kana Scott Bessett, and you flagged this to Kelly and I earlier today. Treasury Secretary used the rebalancing term. That's a big word.

Rebalancing the Chinese economy is something that economists around the world have been trying to get the Chinese to do for two decades at least. They are heavily reliant on investment. They have very little reliance on consumption. More than 60% of the U.S. economy is reliant on consumption. only 39% of theirs. For years, we have people come on CNBC with this very moral tone and say, the reason the U.S. has a trade deficit

is because Americans don't save enough. Once you understand balance of payments, and nobody should explain it here because it's quite wonky and boring, but once you understand it, you could turn that question around and say, well, maybe the U.S. has a trade deficit because the Chinese do not spend enough.

And that would go a long way to solving a lot of the issues that many people in the world complain about it. But you know this. I've been, I've been to China three or four times, but you've been deep, deep into China. China is a very poor nation. That's kind of the dirty secret here.

It's like if you go to Shanghai and Hong Kong, it's rich, it's beautiful Gucci stores, there's a lot of money there. I get it. But the vast majority of the Chinese people, the working class, are poor. So they can't be the same consumption economy that we are. Oh, they could be, absolutely.

Are you kidding? That's pent up demand. Do you think all those people don't want refrigerators? Oh, they do, but they don't have the money to buy the U.S. product, is my point. They rolled back all the reforms and returned to being a much more statist and top-down. Agrarian bait, yeah, feed the people. So if they continued on the path of reforms that they had started to do in the late 90s and early 2000s, we would be a long way of the way there.

But they started turning their backs on those about 10, 15 years ago. And that's why we are where we are today. why they changed it to that path? You can debate that a lot. But if them rebalancing would go a long way to solving the issues we have with them and the rest of the world has with them. And it got worse after COVID because then you have

a population who's convinced they have to have their savings and kind of, you know, they're not in the mood to then trust the okay, let's go out and consume. Let's go out and leverage up, right? No, they don't have a strong social security system despite being a social, theoretically

communist country, right? They don't have a strong social security system. So people save quite a lot because they're worried about paying for their health care. They're worried about all kinds of things and paying for their old age. And is there anything the U.S. can do about it? And that's what's so ironic. So we sit here and say our goal is to help rebalance that economy. Well, I guess the only tool that we have is the blunt one of tariffs, which could at the margin nudge them in that direction, but it won't solve any of those other problems. I mean, it could. It could. We have heard multiple times that the Chinese intend to rebalance their economy towards consumption. They may finally get around to it if they

think it's in their own self-interest. And maybe that is finally this time when you hear Scott Besson say, we're not going to let them export their way out of their issues. And if that's true, they might have to make other choices. Right. And maybe it'll force them in that direction. Thank you both. Appreciate it today. Michelle Crusoe Cabrera and Ed Mills. All right, speaking of trade and tariffs, new treasury data just released offering some insights into tariff revenues. Megan Casella has that. Hey, guys, so one big number for you today, and it's $23 billion. That is the amount the U.S. took in in customs duties for the month of May alone,

and it set a record as the single largest amount ever taken in in a single month, according to Treasury officials. Overall, this fiscal year, revenue from customs duties stands at about $86 billion. That's almost 60% higher than the same time period a year ago. I will say here a little reality check. We often hear the president say, the U.S. is taking in. $2 billion a day from tariffs. It's clearly not that high, $23 billion for the month, but you can definitely see the increase in this category as this year's tariffs have taken effect. Now,

broadening out just a little bit, government spending hit a record high for the month of May last month. That comes in spite of Doge's efforts to cut down on federal spending. It was driven mostly by higher spending on Medicare and Medicaid, as well as at Homeland Security and at the VA. Now for the fiscal year so far, spending in revenues, both at record highs again here, up about 6% from this time last year. The deficit for the fiscal year to date stands at about $1.3 trillion. Guys. Megan, thank you. We appreciate it. Of course, looking for any action in the bond market as a result. Yields were lower on the back of CPI and the Treasury auction last hour. Rick Santelli is here with me. Rick. An interesting day and I know that the topic seems to be, why didn't the market

rally more? Well, we'll get to that in a minute. Let's look at what is going on with regard to CPI. I've been concentrating on the year-over-year core. And as you look at it for the third consecutive month of 2.8, it's going sideways and it isn't at 2%. But, as you can see, we are at the lowest levels, three months in a row. We haven't seen these levels of inflation going back to the first quarter of 2021.

So even though it is good news, the amount of progress for making year-over-year has been rather limited. I think that's why there was so much excitement early because the monthly numbers really did look better than expected up 110. So many are thinking the three-and-six-month numbers ahead are going to be much more cooperative. Now, as you look at a chart of twos and tens,

you can clearly see that they dropped rather aggressively at 8.30 Eastern. And if you blur your eyes a little bit, you can see at 1 o'clock Eastern the orange, the 10-year also dropped because, as Kelly said, we had a really good 10-year auction. Finally, the one thing that isn't so good is the dollar index. It is starting to look like it may challenge some of its lowest closes that we've had this year, and that goes back a ways. We want to pay very close attention to this 98.5 area.

And finally, back to the original question. I think that we're going to get a lot of sessions, Kelly, where we say, why don't we get more horsepower out of good news on trade? And I think the answer really is simple. If you look at where the Dow, the S&P, and NASDAQ were on Liberation Day on the 7th of April, the Dow is at 37,06. The S&P was, what, 49-892, and the NASDAQ was about 15,000 260. That's why we've come a long way, and why have we come a long way with very little, real hard data? Because of the outcomes we're seeing now.

Much of this is priced in, and I really suspect as we get it, potentially more news down the road. If it's good news, you might see many more sessions exactly like today. Back to you. All right, good news, maybe is the new flat. Rick Santelli, thank you very much. All right, folks, we've got a lot to do. And all the markets are not moving big league right now.

We are creeping back toward a new record high. With every gain, we inch closer to that level. If you're keeping score at home, here's the number. The S&P 500 topped out at 6,117 back on February, It's closing high, 6,147 that same day. If we top that, you've got a new high. We are back in two minutes. We've now turned right across the board this afternoon, as you saw there.

As Nvidia, CEO Jensen Wong, is out making a wave in the quantum computing space today, saying the technology has hit an inflection point after some previous skepticism. But do the companies themselves agree? Christina Partsenevilis has more. And to that point, we noticed some of the quantum stocks not moving uniformly on this, Some are popping. IonQ was lower today. I don't know what that tells us. There was some additional news with quantum.

The deal? Yeah, the D-Wave one. So that was a little bit separate, which we won't really get into. But to your point about Jensen Wong, he spoke this morning, and he really gave these stocks. A much-needed boost earlier today at Vivitech Paris this morning. It's like the GTC over there. Listen to how he describes the technology's practical use. It is clear now we are within reach of being able to apply quantum computing, quantum classical computing,

in areas that can solve some interesting problems in the coming years. This is a really exciting time. Keywords there coming years. And this marks a dramatic reversal from January when Johnson Wong essentially torpedoed the sector by saying useful quantum computers were at least 15 years away. The quote on your screen even goes up to 30 years away,

and this was during a CES analyst Q&A comments that really sent quantum stocks into free fall just in January. And then by March, GTC conference, NVIDIA CEO was in, I would call it, damage control mode hosting panels with quantum executives. But those sessions revealed the industry's uncomfortable truth, to your point, Kelly. Raghetti's CEO admitted their technology on AWS and Azure, quote, isn't good enough yet for any practical use. I was listening to this. Jensen Wong immediately cut him off on stage when he said that.

Then IonQ CEO doubled down, maybe about 20 minutes later, saying it would take, quote, another 10 to 15 years to get to where Nvidia and all the other giants are. While the NVIDIA CEO was publicly skeptical about quantum timelines, he definitely believes in the technology. Invidia and Google did invest $150 million in quantum software startup sandbox AQ in April after he made those first negative comments. And the sector getting a boost also just this week from IBM after it announced it was building the world's first large-scale quantum computer capable of operating without errors just by 2029. How does it? For quantum investors, today's rally. and some of it's come down, obviously, with the markets, maybe more about Jensen Wong's credibility

rather than quantum's reality. And that disconnect can create, of course, opportunity, but a lot of risk. Yeah, I still am trying to kind of, like, read between the lines of everything you've said where it's like, Wong is skeptical, then all of a sudden he's embracing it, and he doesn't want them to sound too skeptical,

and, like, what does all that tell us? That tells us that no one agrees on the actual timeline about the practical use in real-life applications for this type of technology. And the reason for that is because it needs to, to be at sub-zero, almost near zero temperatures, any type of environmental, if you knock it by accident, then you completely destroyed the computational use of these computers. Why?

Why? Why? Because it's a little bit different. They wouldn't work at that desk then, which seems to be getting in the way of things. Oh, see, for the audience, is because I was complaining that it's a lot lower and uncomfortable and I'm so far away. This is all happening before we got. What's that?

I can't hear you over there. Back to quantum computing, it's different than traditional computers because it's solving problems simultaneously, you know, A and B, sides, versus a traditional computer that will look traditionally at option A and then move on to option B. And so if you knock it, something like that, would completely destroy all of the... Just that. Yeah, I'm just generalizing here, but I'm sure the tech quantum guys are going to... Also, I think, to Kelly's point, it's a little bit of Sopranos here, right, which is if you're at that level, keep your bleep and mouth shut, because when you utter words, stocks move.

But Jensen Wong probably didn't realize that that C.O. has Q&A for analysts that even one particular sentence would cause an entire sector. I think Jensen Long realizes everything. Well, now he does. I guess he realizes the power he has. He sells out or not sells out. He fills out these stadiums, has all these fancy leather jackets, has fans asking to sign their chests.

Like, he knows now. Now he's pushing quantum. So interesting. He's invested in it. Right, right. More, their money's at stake now. He can sign my chest any day. I'll never shower.

He's rushing to do that. I won't shower again. Without a shirt. Sticking with the. booming world of artificial intelligence, data bricks, the data and AI analytics firm hosting its annual summit in San Francisco. Company also appearing on the number three spot of CNBC's Disruptor 50 list. Wow. Deirdreboza is live at the conference and she just happens to have the CEO of data. It's amazing how TV works out. I'm sitting right next to him. Amazing. Deirda, take it away. I'm sitting right next to him.

Ali Gottzi, always a place. to sit down and talk with you. Before we dive into some of the announcements today, Disruptor 50, we just announced the list. You're number three. You were number five last year. Tell us a little bit about the journey because Databricks is a company that's, what,

a decade or more old, yet you are a darling in the AI world, seen as AI native. What did you get right early on? Well, I mean, we always knew that AI is going to be big. Actually, the field was called this esoteric name, machine learning. So one of the things we got right is, let's not call it machine learning, let's call it AI.

There was a lot of, you know, drama around that. But, you know, we thought it was going to happen faster, and it was just kind of slow for a decade. And then the 2020-Chap-GPT moment has just exploded. So, I mean, we were kind of right and wrong about the timing simultaneously. And you guys were basically perfectly positioned because of data is the new oil. That's exactly what Databricks does. Let's talk a little bit about today.

Lake Base was sort of, I thought it was really interesting. That makes data more useful for the AI era. But it also brings you onto the home turf of really big tech companies like Oracle and Microsoft and Amazon. What gives you the confidence that you can compete with these guys in their own backyard? Yeah, I mean, so basically this technology hasn't changed for 40 years. It's been basically the same. And you know, it's so locked in. Once you have your data there, you can't move it out.

The really interesting thing that has happened is that now agents are creating databases. And this company, Neon, showed that 80% of their databases are actually created by agents, not by humans anymore. So, and last year, that number was 30%. So in one year, there'll be probably 99% of the databases are created by agents. So we think this sort of agentic era is going to disrupt the whole database industry. Right, and this allows sort of the back end to utilize it better, the data for agents. And neon, which you mentioned is a recent acquisition.

You guys have been quite acquisitive. But let's talk about AI adoption because we have actually seen at RampUp, particularly over the last year, no longer just experimental but entrenched within companies. You were just on stage with Jamie Diamond, the CEO of J.P. Morgan. Where you sit, though, what is a bottleneck perhaps that CEOs, CIOs, executives, aren't talking enough about. Yeah, I would say this thing that we call evaluations or benchmarks. Like, it doesn't matter if the agent can crush it at programming contests or, you know,

do Math Olympiad really well and it's smarter than us in Math. We wanted to do a specific job at the company. How do we know how it's doing? That's called evaluations or benchmarks. So that's why we focused on when we launched Agent Bricks. And it's a way to do agent learning to teach these agents to actually evaluate themselves. We can't evaluate them. How do we even know?

We're not going to unleash them in the workforce and not know how they're doing. It could wreak havoc. So that's the main thing, I would say, is the biggest bottom. People don't know. They're flying blind. I don't know what my agents are doing.

Right. And so that's how you basically get more growth, right? And more efficiency. You know, I want to talk a little bit about the workforce because we've talked about that today. You've got tech giants like Google and meta. They're realigning all around AI. What's the data bricks and startup advantage

when you're competing in these kinds of talent wars, which I think seems to have heated up this year, but you tell me. Yeah, I mean, it's very dynamic, you know, and it happens quickly. We'll see, like, you know, a really popular company. There's, like, drama within it, and then everybody's like exodus of all the AI researchers just leaving. And we just try to, in those times, pick the best that we can. There's been multiple of these now happening. I mean, I'm not going to name any particular ones, but we'll see that, you know,

company that has everything, and then suddenly, like, you know, there's lots of people leaving. And then they go to another one, and then back and fork. So, like, it's just this movement is crazy. I have not seen it in the last 15 years. that you know suddenly like okay everybody wants to leave this company now suddenly everyone wants to join that one and back and forth and so on so it's happening quickly and it's fierce one really quick question I'm gonna sneak in I've asked two million times before about an IPO but it feels like the window is opening

and everyone is chasing AI how are you thinking about data bricks timing yeah I'll say like Andrew it's we're definitely going public the question is just when it's not an if and no clues there no I mean Jamie Diamond would just on stage and said we need more American companies to go public so he's probably right it will happen but I don't have a specific date for you right now. Over under a year? That's a good one. All right. Not willing to answer, but appreciate you.

Entertaining the question. Allie, thank you so much, guys. I'm going to toss it back over to you at headquarters. Deirdre, thanks for your efforts, because especially after Voyager today in Circle. Come on, the water's warm, if not hot, for data breaks. It's warm. Thank you, Deirdrejo. Dear Joe, Deerbosa. Before the break, check out another player in the AI space. Microsoft hitting a new 52-week high today.

It's only up fractionally today, but it's up 7% in a month and 12%. now year to date. Still ahead, the local economy in Los Angeles reeling from massive wildfires earlier this year. Added more unrest around those protests sparked by the ice raids and suddenly the economic picture looks a little more dire. We'll get a live report on what's going on next. Welcome back. The unrest out in Los Angeles continues with those protests sparked by the ice raids, eventually leading to the deployment of not only the National Guard but the Marines as well as heightened tensions. L.A.'s mayor issuing a curfew. state's governor, budding heads with President Trump, and it all comes at a pretty tough time for L.A.

Kate Rogers brings us that story. Hi, Kate. Welcome back. Hi, Kelly. Great to see you. So immigrants are a driving force in California's economy, now the fourth largest in the world, with foreign-born workers representing half of all prime working age individuals in the state compared to just a third across the nation. Protest in raids in California and in Los Angeles in particular coming at a fragile time for the city as it looks to rebuild from devastating wildfires earlier in the year and, of course, also grapples with the impact of tariffs on its ports. While the impacts of the current raids and protests are limited, the impact can spill over beyond just individuals showing up for work. For example, in mixed status families where people might be fearful of going

out to shop or send their children to school, that's been called a chilling effect. Take a listen. This is a huge liability if, honestly, a lot of the workers either want to know longer participate in the workforce in California. If fear really does start to ripple beyond undocumented individuals, which it certainly will grip undocumented individuals, and there's a big part of the workforce agriculture, for example, that depends on them. But it will ripple beyond that, I believe, to make status families.

Now, immigrants play key roles in the state's industries from agriculture to health care, food service, hospitality, and, of course, technology. Back over to you, Kelly. That's a great point about what's a great point about what's stake here. And, you know, do you think that makes them unique for what we've seen? Or are there other areas, Kate, where, I mean, of San Francisco we've heard, there's a protest there as well. Yeah, certainly. And our mayor here in San Francisco, Daniel Lurie talked about there being a lot of fear in communities, too. So I was talking to Stan Vueger of the American Enterprise Institute

yesterday, and he talked about how psychological this all is and how that can kind of feel really localized and impact specific families, specific communities, specific businesses. But it remains be seen how large of a hold that winds up taking on people and how much that spreads across the country. So it's certainly something we're going to be keeping an eye on here. All right. Kate Rogers, we appreciate it this afternoon. Well, let's get now to Leslie Picker for a CNBC news update. Hey, Brian, a New York jury found Hollywood movie producer Harvey Weinstein guilty moments ago on a sex crimes charge in his high profile retrial. He was acquitted on a lower charge

and the jury is still deliberating on a third related to an alleged race. in 2013. Jurors reached their verdict on the fifth day of deliberations. Weinstein's 2020 conviction was a flashpoint of the Me Too movement, but New York's highest court threw it out last year over issues with the trial. An army official said today, troops in Los Angeles are allowed to detain people until police can arrest them. The comments come after President Trump's controversially deployed 700 Marines and 4,000 National Guard troops to the city where protests so over federal immigration rates are taking place. And the U.S. is reportedly preparing to order the departure of non-essential staff

from the embassy in Baghdad in response to potential unrest in the region. That's according to Reuters and the Associated Press. The move comes after Iran's defense minister said that Tehran would strike U.S. bases if nuclear talks with Washington do not progress. Brian, I'll send it back to you. All right, Leslie, thank you very much. All right, on deck. just how much money some members of Congress made while trading stocks as the tariffs rolled out.

The outrage you got to hear about, and you will, if you stick around. CryptoWatch is sponsored by crypto.com. com is America's premier crypto platform. All right, welcome back. Did you know that some members of Congress are apparently really, really good at trading stocks? The Wall Street Journal uncovering which members of Congress made some very, very, profitable stock trades as the tariffs rolled out and rocked the markets. According to the journal's exclusive piece, more than a dozen members of Congress mean more than 700 stock trades from

April 2nd to April 8th. In other words, some members of Congress timed the market better than pretty much every hedge fund. Here now to talk about the findings is Gungeon Banerjee. One of the authors also lead writer for the markets live at the Wall Street Journal and a C-N-Mars. NBC contributor, Gungent. I guess this could just be really good timing, but the numbers seem to align pretty well with the markets. What was sort of the core aspect of you and your team's findings? Thanks, Brian.

So my colleagues and I at the Wall Street Journal analyzed more than 6,000 disclosures among House lawmakers over that timeframe and found that, you know, more than a dozen of them placed more than 700 transactions. A lot of them were trading in incredibly risky things. Think single stocks, options. There were index funds as well. And what we found was that some of the lawmakers who have called for stock trading bands were actually doing some of the most trading.

I think Rokaneh. And Rob Bresnahan. They placed some of the most trades out of anyone else in those disclosures. What were they trading? You said risky things. Are these risky stocks? You mentioned index funds. Are they doing options?

What specifically were in these 700 trades? You know, it was really varied. I was shocked by the amount of options trading going on, Brian, as you and I have discussed, that does tend to be riskier. We saw one lawmaker, you know, pretty much call the bottom in terms of Microsoft's price. While the shares were falling around 4% in early April, he jumped in to buy Microsoft call options. which, for example, would have roughly doubled by the end of May. He dished out thousands of dollars for Microsoft call options.

We saw Marjorie Taylor Green shortly after Trump announced those tariffs. She jumped in to buy everything from Lou Lemon Stock, FedEx stock, Ballanteer, spending thousands of dollars on those trades. Rokhuna placed hundreds of trades in option stocks and index funds. So it really varied. And we saw a lot of lawmakers jump in. during one of the wildest stretches for global financial markets of the past decade. Gungent, hi, it's good to see you. And count me in for those who don't like the fact that this can all continue.

But honestly, it's more because of the appearance of conflict because we can never know, right? I mean, you go back to early April, and what are we surmising here, that they had inside information about what was going on? I mean, it sounds like they did what a lot of the, and when we say they, a lot of this is their financial advice. right? So I struggle to connect the dots to something nefarious, but at the same time, I don't think this should be allowed to continue because of the way that it looks is as bad as whatever actually happened. It's one reason here at CBC we don't trade individual stocks, right? So I'm just curious if you can draw a line from inside information to profiting off of that inside information. Right, Kelly. So as a Wall Street Journal reporter,

I'm also not allowed to trade in stocks or options or move in and out of positions. And yes, a lot of these lawmakers did tell us that this was either their family members, their wives, their daughter's accounts, maybe their financial advisors were doing it. What shocked me, though, was the quality of the disclosure here, where, again, my colleagues and I analyzed more than 6,000 filings. And just what lawmakers are required to disclose is incredibly murky. For example, a lot of these positions, don't even state this was the exact dollar amount of what they bought or sold. In fact, it's a really

wide range. For example, this Microsoft position was between $10,000 and $30,000. Some of the disclosures that we were looking at seemed like they had been printed out and scanned, and it was even tough to make out what was on there. Some of the numbers were blurry. It was tough to make out whether it was a buy or a sell. And it is tough to draw that line. Was it insider trading? Was it not, but what lawmakers and analysts told us was that this certainly sheds a spotlight on the conflicts of interest that can arise if lawmakers are allowed to trade. Yeah, and what they will say, and they are correct, is that a lot of this, to Kelly's point, was third parties making decisions that are sort of in blind trusts or on behalf of other family

members still. It's not a great look. And also, I'm always amazed, Gungent, how rich, and you don't need to comment, we'll say goodbye, but how rich, some of these members of Congress are, they make a couple hundred grand a year, worth like $20 million. It's fascinating. Gungeon Banerjee, the Wall Street Journal. Thank you.

And we'll see if we get any more comment from those who are called out on these trades. CNBC's annual search for America's top state for business is kicking off. It's that time of year. I love this time of year. And Washington policies from tariffs to federal job cuts are changing the game. We will explain how next. Is that a clue? It's that time of year.

We are getting ready to reveal the top. top state for business here on CNBC. One thing is clear already that the Trump administration has transformed the competitive landscape. And Scott Cohn is here with more. Good to see you, Scott. Good to see you guys, too. Isn't it a great time of year? We love it. It is a different world this year, Kelly. You said it. But fortunately, we built our top state study 19 years ago to adapt to change. Here's a reminder of how it works. We start with the same 10 categories of competitiveness each year, but we weight them based on what matters most in a given year. And we adjust the metrics as well. And yes, in 2025, we've got changes.

Economic anxiety may be high. This is a transition period. But so is opportunity. This has been one of the busiest periods that we've had in near 30-year career, which is exciting. So in 2025, like never before, states are touting their economic strengths. Virginia's economy is strong, stronger than it has been in a very long time. We've paid down more than $12 billion in debt. grown a rainy day fund of more than $2 billion. For the past two years, Florida's economy has ranked number one in these United States.

This year, for the first time, economy is our heaviest weighted category. Which states are growing, creating jobs, have the strongest finances, but also which state economies are most exposed in a trade war and most vulnerable to federal budget cuts. Next, infrastructure, roads and bridges, computing power and electric power, and shovel-ready sites, workforce, where the best workers are and where they're moving to. We look at the cost of doing business, business-friendlyness, the quality of life, technology and innovation as federal research money dries up. We measure education, access to capital, and the cost of living.

You can read more about our study and follow our journey at topstates.c.com. Guys, the top states revealed July 10th, so we are less than that. a month away. Remind us who won last year? Virginia, come out. Yes, that's right. Should win every year. Did it win the year before as well? It did not win the year before. But it's always like a top contender. It's been a top contender since we started this. Virginia was the first top state for business back in 2007. Wow. Have you ever been to Winchester? Have I been to? I don't think so. Or Lexington?

I don't think so. This could be the year. You're welcome. My mom and dad will take you to dinner. Well, that in Winchester, Virginia. Quick. Maybe we'll, yeah, okay. You like Bob Evans or Denny's. Well, who doesn't? There you go. You're in, Scott Co. We're not kidding, by the way. All right, still ahead.

We told you earlier how NVIDIA CEO Jensen Wong said quantum computing is reaching a, quote, inflection point is the hype for real. We're going to ask our three-stock lunch trader. Next. Welcome back. Let's do a little three-stock lunch where we hit three different stories, why they matter to you, what you should. do with the stock trades. Farmerler and Washington CEO, Michael Farr, is our guest for this today.

Michael, it's great to see you. He is also a CNBC contributor, of course, and a Washington, D.C. guy, but we won't belabor, the Virginia thing. Let's start with Dave and Busters, Michael, which is report, which did report earnings last night. It's up 15% today after comps were less bad than feared. It had a horrible quarter of the one before, so expectations are relative here. Positive commentary about the current one, too. Would you pick up the stock? No, no. Hi, Kelly. Hi. But look, this was kind of a relief rally because things weren't awful.

The company, now look, there might be money to be made here, but as a long-term fundamental investor, they don't have a lot of cash. They do have a lot of debt. You don't have cash and you have a lot of debt. As a company, you don't have flexibility. They had a horrible quarter last quarter. That was a bad quarter, this quarter missed on top and bottom lines. If today you owned it, you feel good. Tomorrow would be a great day not to own it. I would get out and put my money somewhere more predictable and a bit safer with a balance sheet. Ooh, sounds like Amazon, which is our next stock. They just expanded a nuclear deal with talent to power data centers. Would that be your choice? You know, this is good.

I mean, that's a segue in this. That's good. I like that. So, yeah, I mean, Amazon, I've owned it for years. And while the retailer is what everybody knows, of course, the AWS and cloud that is benefiting from still these early stages, early stages of artificial intelligence computing. I think that over the next five years, you're going to be very happy owning this one. They have, one, they have a lot of cash. They've got a great deal of opportunity. Bezos is always looking

when I've talked to him three to five years out of what he's working on right now. He's not focused on today. He's still growing this company. He's dynamic. I think he's brilliant. All right, so let's then jump to something kind of way further. Well, not from Amazon, but maybe for what the style of trading you like. The quantum names, Michael. InVity's CEO saying quantum is reaching an inflection point that's got quantum and regetti up today. Do you like anything in the space? Yes and no, but I would own the ETF because you can't know which one of these is going to be successful.

It's early stages. So I like this defendant quantum ETF, QT, U.S. M. ETF. You own a whole bunch of them with some established companies in there, too. I would not make an individual bet. I'd make a broader cast. And yeah, I'd probably nibble away and know it was a speculative position. That's an interesting point, especially us trying to understand Christina's point. I mean, look, you touch these machines and they stop working. There's a lot to learn about quantum. Michael, thanks very much. We appreciate it today. Michael Farr of Farr Miller and Washington. We'll be right back.

Mr. Secretary, how are you doing? So far, so good. Okay, I was just curious because I know Elon Musk body checked you at the White House. I just know animosity to Elon Musk, right? You know that? That's why I heard. So you believe what you read on Breitbart is what you're telling this Congressman? I didn't know if it's too sensitive for you.

I won't ask that question, but let me move on. I will take South Carolina over South Africa any day. Was that a tacit admission? Some palace intrigue. Treasury Secretary responding to questions about that reported body check between him and CEO Elon Musk, who apologized last night to President Trump for his Twitter tirade that landed the stock in some hot water. He said, I regret some of my posts about the president last week. They went too far, Brian. Yeah, and before we go, by the way, I want to flag some

reports that are moving oil. Iraq, the U.S. Embassy in Baghdad is being evacuated due to what they call heightened security risks. Folks, Iraq is the fourth biggest oil producer in the world. is moving up almost 5% on this news. When you evacuate a U.S. Embassy, it's a big deal. And we saw the market take a spike lower around the time this news passed about 45 minutes ago. This is probably, great point. This is probably what moved the stock market down and oil up. Halima Croft will be on set here tomorrow. Talk more about this. Yeah. So people reading into it, some escalation perhaps with Iran, which ironically is the very deal we're trying to strike right now, which makes all the timing very interesting. Yeah, Iraq is a huge, huge oil producer. Watch that space in those

headlines. All right. And thanks for watching. Power Lunch, everybody. And closing bell will start right now.