Power Lunch - S&P 500 falls as Big Tech and SpaceX struggle to start the trading week 6/22/26

Episode Date: June 22, 2026

Stocks are starting the week mostly lower on Wall Street as investors assess the latest developments in the Iran war and await the release of inflation data closely watched by the Federal Reserve. Brian Sullivan and Kelly Evans bring you an exclusive interview with the Chevron President of New Energies, Jeff Gustavson, following the news that Chevron will fuel Microsoft’s massive data center in Texas. The anchors are also joined on set by Simeon Hyman, ProShares Advisors Global Investment Strategist, to break down his firm’s double-leveraged SpaceX ETF given the stock’s recent slide. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stock stall as big tech falls. Welcome to Power Lunch, everybody with Kelly. I am Brian. The market and your money has been all about AI. And today a big deal between Chevron and Microsoft to build out power for 20 years. Chevron's president of new energies here to talk about it. And it's not just Microsoft driving today's AI headlines. SpaceX is entering the investment-grade bond market in what could be the opening move of a massive borrowing push to fund its AI ambitions.

Plus, a bold new way to bet on SpaceX shares, the strategist behind the double-level, Facebook, SpaceX, ETF is coming up. We start with the markets broadly, though. The SMP 500 and the NASDAQ under some pressure as those big tech stocks fall. Shares of Alphabet are down 6%. Amazon, Meta, Microsoft, similar hits. All of that has erased about $500 billion in market cap today. That's more than a Cisco, Caterpillar, or Bank of America.

Is it the start of a continued bigger pullback or just a brief pause? Let's welcome in David Bianco, the CIO of DWS America's. David, welcome. Hello, Kelly. I'm ready to declare. By the time I'm ready, it's either means I'm completely wrong or it's been true for six months already. So is the Mag 7 trade officially, officially over or not? What do you think?

It is not over. I think what the equity market and the tech sector speaking about today is the idea that this CAPEX is for real and it's going to stay strong for a while, but it's also going to be really expensive. Everything from the chips to the other tech hardware, it's going to cost more money than previously thought. So we see pressure on the hypers because they're the ones. with all of this CAP-X, yet many of the semiconductor names, and many of the other tech hardware names, are having a good day and have had an amazing year. So even in the backdrop of higher 10-year yields above 4.5% today,

maybe we've got a somewhat hawkish-fed. I know we've got lower oil prices, which might help a little bit on the cost of energy, not just the consumer, but even powering these data centers. But the point here is there's some concern about the CAP-X. I would say, be patient. These hyperscalers know what they're doing. And stick with the stronger ones, but I think this is going to be a good return on a business.

I bet our team in the back is quicker than I can be on the computer right now. I want them to pull up the Mag 7 going back to October of last year against, what should we do it against, the S&P, the small caps? Well, do it against semiconductors, and then you'll see the big divergence. Anything against the semiconductors. I mean, the spread between the semis and the software trade is 27 points this month. It's crazy. But I just want to know if the Mag 7 has underperformed the broader

market for going on six months now? Well, it has, but I would be using this as an opportunity to buy these hyperscalers. They're going to run the world, and they've got great services and products coming our way, both households and businesses will benefit. We're still bullish on this CAPX and the recipients of it, but I would use this as an opportunity to balance that exposure out and maybe move a little bit away or less to the semiconductors and tech hardware toward the hypersaccarers. And most of these large software companies, they're not going to die. And the largest is an essential business to American business. All right.

So the team put up Russell 2000 versus the MAG-7. I would challenge our team, since that's what we're doing today. Why not? We just made this up as we're going along, David, to put up the MAG-7 versus the 10-year yield over a year. How big of a problem, or is a problem, is a 4.5% 10-year? Well, as far as the Magnificent 7 goes, I think that's just a spurious correlation. We see this CAP-X coming and accelerating even as to.

10-year yields have climbed. We've seen the hypers go to debt capital markets and successfully raise many times at somewhat higher underlying risk-free rates. But the point is the 10-year yield is not a challenge to the hyperscalers. It's a challenge to other parts of the equity market, defensive bond substitutes, reed, staples. Let me ask the same question a different way then, David. If the 10-year was able to fall, I mean, we've been talking about for two years, it hasn't gone anywhere except for up or at least steady. If it were to go below four, is that another rocket ship move up for equities? If yields were to fall, and there was not any signs of a deteriorating economy with that,

yields were to fall, inflation's heading downward and maybe other pressures on interest rates like the deficit ease, then that would be welcome particularly to the normal equities. But the tech market, whether it be hardware, software, hyper-scalers, is in a different universe from 10-year yields. The 10-year yield will affect the economy, it will affect the deficit, it will affect many things. Housing, I think, is very important,

but I don't believe the 10-year yield is going to influence this CAPEX or the valuation of tech company. The CNBC Mag 7 Index, the ticker mags for our friends in the back, was it $65 in September, and it's $64 today. And it's June, I mean,

we're almost going to anniversary it. Right. So there's a lot of investors who went to the bank on the thing that worked so much Well, what do we say last hour? It's outperform the S&P every year since 2015. Right. We suggest diversifying from the Magnificent 7, even Magnificent 10 late last year. And that, you know, the equity market has broadened, but it's actually been largely a broadening within tech.

You know, when you talk about value doing better year to date, it's value tech stocks that have done so well. So it's really just a rotation within tech. And yes, from what to what? From the spenders to the receivers of that cap. By the way, just so I'm aligned with the chart. I was talking about the roundhill, mag-7 ETF at 65. Their CNBC's 414, similar story, different sort of gauged compare it. But I would argue now is the time to lean back into the spenders.

There are encouraging signs that there's a shortage of compute. They're building data centers. These data centers are in demand. We're going to have more IPOs, and that's going to give those companies deeper pockets to spend more money on compute. Don't want to get ahead of next segment, but after the break, we've got actually Chevron's New Energy's president because we're talking about a 20-year deal they made with Microsoft.

To your point about the spenders, there is one. Outside of that, I mean, if everybody's just investing in the same thing, David, is there still alpha to be had? And do you believe this is a strong stock market because some people will make a smart case

that it's not a strong stock market because a lot of stocks are down and it's just the same 10 or 20 stocks that keep going up and that's skewing the average. The tech sector has been leading the way for a long time, just different parts of the tech sector. But if you care, because people care?

We're big believers in getting the sectors right, and tech has been great, and we like it. But financials have done well. Financials are doing well to being part of these capital raises, both debt and equity, that are helping to fuel this AI CAP-X. The wealth effect is really powerful, so we like big banks and capital markets.

Financials, electric utilities, another play on powering the data centers. And I think healthcare is a space that's been just neglected from an investor standpoint. It's still good growth at very reasonable valuations and plenty of innovation that we see coming at the medicine makers, both biopharma. And so that's one area maybe if you're looking, but no one gets that excited. I mean, we talk about health care. It's great in a tough market. It's been neglected.

Yeah, this isn't really a tough market. But you're saying to get excited. Yes. A lot of people say to get excited about it. And I respect that. But most the everyday person, you know, is looking at SpaceX and they're down 10%. Or they're looking at the semis and they're looking at the memory names. And so it's weird because in some ways this still feels like a frothy market.

It's just, I think that's what I'm trying to say is the Mag 7 seem to be sort of wandering off in their own place. But this is not that tough of a tape otherwise. I mean, you have plenty of areas. Look at Caterpillar again today to the point we're making all-time high. Well, they're in that Microsoft deal. In the Microsoft deal. Right. Caterpillar is an interesting one.

But I don't find the market frothy. The earnings have come in. The P.E., about 21 forward times earnings. Keeping an eye on 10-year yields, if they go higher, that'd be concerned. But I'd rather have a hawkish fed and feel better about 10-year yields, not going higher, hopefully find their way downward. I think the bubble actually popped. There was a bubble in 2021 amongst a lot of software and other even retailers,

a lot of things that went to the moon in a somewhat inexplicable way shortly after COVID. And actually, that bubble popped. Just nobody noticed because we have a booming equity market out of semiconductors and most tax dollars. That whole year of 2022 is terrible. We opened lower. I think we traded down all the way until Chad GPT launched, really, in October and November. We found AI. That's good point.

Stock market stunk. Yeah, it was horrible. I mean, we probably would have been in a recession if Chad GPT had not come on the scene in that very moment. So many things to thank AI about. As everyone hates it, trying to block it from passage. Well, it's helped the healthy economy. certainly a healthy equity market. Certainly so. David Bianco at DWS Americas. David, really appreciate you coming out here. Thanks for being on set. Thank you. All right.

Coming up, we are just getting started. And up next, kind of what we just talked about, why Chevron made a massive 20-year deal today to supply power to Microsoft. SpaceX stock looking very terrestrial right now. And China, hitting back at two big American rare earth companies, will hit all those stories and more. Next. A major deal at the intersection of AI and energy. Chevron, signing a 20-year deal to power a new Microsoft Data Center in Texas. It's called Project Kilbeet. And when it's completed, we'll produce up the 2.67 gigawatts of electricity. That is enough to supply roughly 2 million homes. Chevron will provide the natural gas to power the turbines, and the turbines themselves will be supplied by both GE-Vernova and the aforementioned Caterpillar. It is a first of its kind 20-year deal. for Chevron, so let's talk about it with Jeff Gustafson. He is the president of New Energy's at Chevron, and he joins us now. Jeff, pleasure to have you on. A big deal. I think it's new, kind of new-ish for Chevron. How did this deal come about? Good to be here, Brian. Thank you.

We've been working on this for a number of years. Very excited about the announcement this morning with Microsoft, a new partnership with us. We're already a customer of Microsoft's. This is a two-point 7 gigawatt facility, sighted in West Texas, the Permian Basin, home to some of the most abundant natural gas reserves anywhere in the country, maybe the world. It's a dedicated behind the meter power plant, so not grid connected to start, so no competition with consumers in the area. We signed a long-term agreement, as you noted, a 20-year power purchase agreement with first power expected in 2028. So a really big day for us, a win-win for both. Chevron and Microsoft, couldn't be more excited about it. So, yeah, and behind the meter, the fancy

term basically for, you're not taking electricity that other people may compete for. This will be dedicated power just for that data center. How important is three buck and change natural gas? Could this deal have gotten done if that gas was at five or six bucks? Well, actually, natural gas in the Permian has traded significantly below $3 for most. most of this year, in fact, it trades at negative values. You have to pay midstream companies to take the gas from you. You have to shut in oil and gas wells, or you're forced with a difficult decision to flare, something that Chevron doesn't do in its day-to-day operations. So this was something that was very attractive to Microsoft from the get-go. It's one of the regions we

selected this region to build a project, which is really one of the few places in the country that can handle the type of power demand and the type of natural gas that will be providing the plant over a 20-year period. So a very, very, very appropriate place to cite this new plant. Jeff, it's Kelly here. How many data centers are in this area, or maybe in the state of Texas now, just to give us an idea? And is it affecting bills or power availability for the people who live there? There have been a lot of power plants that have been announced, and a lot of power plants that have been announced. of prospective data centers that have been announced. I think it's maybe a dozen or so last time

I counted. Look, this is a community that we have worked in for over a century. This is a community in West Texas that really understands the importance of energy. We have a very long history there. We've engaged with community leaders in the town of Pacas and elsewhere from the start. They see the benefits. There's a lot of benefits here with new jobs, not just for the power plant construction, but for the data center, and not just during construction, but over time. This increases the tax revenue base significantly for this community and this region. It also provides a diversified economic outlet for this region. This is an oil and gas region. This is something that is even more durable than oil and gas. We get a lot of questions about water on this, and there we're not

competing with the community on water. We're going to use brackish water. No, freshwater here and possibly we'll use produce water in the future. And as I said, not being connected to the grid, we're building this dedicated to Microsoft's data center. So there's really no competition with local electricity consumers. In fact, over time, as we have excess power, we plan to push that into the grid to help stabilize it. I ask because we also know about Stargate down in Texas.

We know about who we speaking with the other day? Who used to be a Bitcoin miner that's now doing? Cypher. Seifer, thank you, doing a big data center project there. So maybe to put the question differently, Jeff, because Texas is a big state. How many data centers could it have? Many. It could have many data centers. One of the reasons we picked Texas is it's a pro-business state. It's got an unregulated electricity market. It's a place where we think we can really get something like this done. But really our history in the state, the large natural gas resource base, particularly, in West Texas are the real, real drivers for this. But look, I think there have been 60 projects like this announced over the entire country. Very few of these have been able to reach the milestone that we reached this morning. Yeah, and you were talking about natural gas and how it might have periodically a negative price. And you said flaring, which is burning, and you don't want to do

that. You're literally burning money. It's bad for the environment. It's just bad all around. So kind of to follow up on Kelly's point, Jeff, does Chevron have enough gas capacity either in that region or anywhere to do more deals like this? We do, and there certainly is enough gas in this region. We have decades worth of not just gas, but oil reserves left in this basin. That's just speaking for Chevron. When you look across the industry, again, this is the most prolific oil and gas basin. probably anywhere in the world. It's certainly in the top handful. So there is room. You know, there are very few places across the United States, perhaps around Henry Hub in Louisiana,

up in the northeast in the Appalachia Basin, where you have enough gas to do this at the scale that we're talking about today. And we see this as a platform for future growth for us. That could be in the Permian, in West Texas, or it could be elsewhere. This is something that we think's very attractive, not just for Microsoft, but also attractive for our investors. It's like you should have a group inside Chevron called new energies or maybe new models for new energies because it's like that. So final question, Jeff, and I know you're not the developer of the physical data center itself, but you're pumping the gas in to power it. What's the timeline on this? When will this thing be theoretically up and running and using

Chevron gas to make that power? So we hope to, today we announced the agreement on a power purchase agreement. This is the commercial foundational agreement that underpins everything in regards to future development. We'll continue to refine our cost estimates, finalize the design. We have some permitting work to do. We're mobilizing contractors literally as we speak and hope to reach an FID decision later this year, late this year. That will start construction and we plan to provide first power to Microsoft in 2008. Well, keep us informed to the third. timeframe, Jeff Gustafson. Congratulations on the deal, 20 years, long time. And we appreciate you coming on Power Lunch, Jeff. Thank you very much. Thanks for having me. All right, folks.

Speaking of Energy, sign up now for my new weekly energy intelligence piece called Power Insider. It's got my weekly hot take on energy. It's got some stock picks, exclusive interviews, and more to sign up at the CNBC.com slash Power Dash Insider. It's a dash between the power and the insider. If you don't want to do that, just hit the QR code, Kelly, that's on your screen. That link says at CNBC.com slash power newsletter, no dash. I know. You know what? Maybe that works.

Maybe it doesn't work. Let's try it. Coming up, the back and forth between the U.S. and China on rare export controls is heating up again. How will the U.S. respond to China's tightening? We'll have more on that next. The whole fight for rare earth materials is heating up China, now imposing trade restrictions on dozens of American companies, which Beijing claims is payback for the White House, adding some Chinese tech companies.

to a Pentagon blacklist of companies accused of aiding Beijing's military. The Chinese Ministry of Commerce placing 10 American industrial suppliers on its export control list. The two names you probably care about folks, MP Materials and USA Rare Earth. Under the new rule, Chinese companies cannot ship certain products to either MP or USAR. MP materials years ahead in actual mining and processing of rare earths for magnets, while USA Rare Earth still building up its business, we will see if this latest move by China means Trump and the White House will react with its own

new policies against China. All right, now let's head over Contessa Brewer. With a CNBC who's update. Brian, a federal judge this afternoon, blocked a Trump administration attempt to subpoena Minnesota Governor Tim Walts and other state officials, calling it an effort to harass and retaliate against them. Those subpoenas were served as part of a probe

into whether Walts and others in state government obstructed or impeded law enforcement during the federal immigration operation there earlier this year. Former New York Governor Andrew Cuomo is getting into the crypto business. He will co-chair a venture between the owners of the New York Stock Exchange and Crypto Exchange OKX. They say the project will focus on taking NYSE listed assets and tokenizing them, which converts ownership rights of assets into digital tokens, recorded on the blockchain. And Leonel Messi is now the all-time leading scorer in Meds World Cup History. The Argentinian superstar scored, rather, the first goal in today's match against Austria,

breaking the all-time record of Germany legend Miroslav Koza. Messi now has scored 17 goals in his sixth consecutive World Cup. He scored his first World Cup goal at the age of 18 in 2000. You know, Messi's not messing around, Kelly. He's fantastic. What an achievement. People who can not just be excellent, but do so for decades. Come on. I mean, he's still young to some of us, but.

Yeah, exactly. Keep going. No, contestant, thanks very much. Another down day for SpaceX. It's down 10% today. That's three straight red days in a row. Just as a new crop of levered ETFs is giving traders a way to make even bigger bets in either direction up or down.

It's now time to buy the dip or really. or double the risk, we'll explore that next. While SpaceX shares are falling back to Earth today down about 10%. The company is blasting into the bond market, announcing its first ever offering of senior unsecured notes, saying it holds about $100 billion in cash as well. Final terms of the offering have not yet been said, but reports suggest it could raise about $20 billion. SpaceX is deemed investment grade, getting B-tier ratings from all the major ratings firms.

Its debut bond sale comes as big tech also continues to tap the credit markets to help fund their AI buildouts, including Alphabet, Amazon, and the others raising more than $300 billion in debt since November. That's according to J.P. Morgan. Sticking with SpaceX, the stock has been trading for just over a week, and Wall Street is looking for new ways to make bigger bets on it. 25 SpaceX-related ETFs were filed with the SEC by IPO Day. About half are leveraged or inverse products designed to magnify the stock's moves, up or U.S. down already there are 11 leveraged single stock SpaceX ETFs on the market, including one from our next guest firm. Joining us now is Simeon Hyman. He's the global investment strategist at pro shares. Simi, it's great to see you. Thanks for having me. A lot of people just want to make sure

they understand how these products work. And also because there were some discrepancies for the first few days a day that I think the equity was up, but the leveraged long was down or vice versa. So talk through a little bit of the mechanics of this and what have you experienced so far? That didn't happen with us. It's pretty straightforward. We started trading last Monday. SPCF is our pro-share's Ultra SpaceX ETF. And how it works is it targets two times the daily performance of SpaceX so you can get magnified exposure, less cash of risk. You don't have to worry about a margin account or any margin calls. And you trade in your brokerage account.

As you can see on daylight today, it's down 20%. So where do you tend to see the most volume, big up and big down days? Or there tend to be retail on one side institutional on the other. Are there any characteristics about these products you can share? We think the constituencies are pretty balanced out there. But you see the volumes on both days. There are absolutely people who will look to see a bargain opportunity. The news flow today is interesting to make.

A bond issuance, I'm trained old school. That's supposed to be a good thing. Net debt to EBITDA for the S&P 500 is one and a half times. Companies, you still get to write off interest expense. There's a little cap, but still pretty effective. So you're supposed to issue debt if you can totally handle it. So that's a good thing. And they've got another AI customer.

So folks may see this very much as an opportunity. Right. The shares are still, you know, they're resetting, I think, a little bit from my PO day, because when it goes that well and when they go up, you know, for a few days after, understandably, there's this kind of effect. Just looking at, you said, what is the point of kind of the leverage long or the leverage shorts? You said, do you think it competes with things like, I mean, there's so many different products out there now, waste that you can kind of take a bet that is capital. Like who, how would you differentiate this between prediction markets, options, you know, a suite of other products that people could also use? This is still SpaceX. So this is absolutely equity. This is 100% equity. This is not, you know, prediction markets. So when you think about the ecosystem that's developing, we've got the fast track entrance to the indices pending. Now, remember, this is market, this is float-based, and you've got this triple thing that NASDAQ is doing, but you're still talking about maybe 1% of the NASDAQ 100. So that's going to be a nice balance source of demand. You have the equity itself, and you have the leverage single stock, which we think is a pretty

ecosystem for price discovery and liquidity and a real nice way for for folks to meet in the marketplace. What level of leverage is appropriate versus risky? Well, I think you've got to look at it, number one, with regards to the risk tolerance, the risk posture of your entire investment portfolio. In all likelihood, no one's owning this as their only asset. So in a portfolio construct, it's pretty important to think about where your risk lie. And this is equity. This is a riskier piece of the equity market, but what else you may have in there? And I go back to, even when it's included in the index, it's going to be relatively small. So as an example, you know, if you want it to have a position that's closer to Mag 7 like in your

portfolio, you can't just take the index off the shelf because they only IPO, you know, 4% of the company. plans to do that, I assume plans to do this with the other, and I say hot IPOs. I don't mean they're going to do well. I have no idea, but I mean they're widely anticipated the Anthropics, the Open AIs. I would imagine that ProShares has plans to do, to do this with those. Yeah, I don't have anything to announce. I'll tell you just a couple of it was trying to get you to break some news right here. I mean, we'll give you against a couple of things.

You forgive me, it's 30 years. We're the old school guys. We're the largest provider of leverage university. ETFs, T-T-T-T-T-T-T-Cu-T-F, three times daily, the performance of the NASDAQ 100 is us, and we do have a suite of single-stock ETFs. The largest is on circle. So we're players, we're happy to be here. We think it's an important solution for investors.

And actually, the majority of ETF launches in the last year has actually been single-stock. So folks are finding this to be an efficacious solution. Indeed. You know, there's so many different options now than they're used to be. There is, and I guess what I would get, I would ask you to me is, who, who, for our viewers and listeners that maybe are also your clients, are thinking about being your clients, what's the difference between the person that might buy a share of a stock

versus use one of your single stock ETFs? Is there a difference in who they are or their risk profile or how they invest? You're magnifying the bullish view. So to that extent, you might imagine that somebody who's using SPCF probably has a fair amount of conviction. But still, when you think about it in that portfolio context, it may just be that you like the way it fits. It may be that you just want to even it up with the MAG 7.

Or it may be that your equity holdings are something more conservative. As an example, we have an ETF ticker N-O-BL, the S&P 500 dividend aristocrats, old-school underway technology. Well, if you combine that with something like SPCF, then that would be a very balanced risk perspective. So it all depends on what else. You're using it almost a hedge in some case. I wouldn't call it a hedge necessarily, but you have to understand how it's fitting in the portfolio and then how that's reflecting your total portfolio with respect to what the market looks like. But I think it's really important to remember that only a tiny slice of this guy was IPOed.

So we talked about this the last time I was on. That's a trial balloon. So presumably everybody who's invested from a corporate perspective is in for the long haul. But again, the way you would get exposure to this at the index level doesn't look anything like the massive almost $2 trillion valuation. And this may be one way that you might want to express something directional towards that view as well. All right. Well said. Simeon and ProShare.

Simmon, we appreciate you coming in. Thanks for having you. Stay dry. Thank you. Let's get a quick check now on the worst sector in the S&P, which is communication services. It's getting hit hard with Netflix, Alphabet, Fox, all. And Trade Desk, by the way, all falling today. is down 4%.

It's been an especially rough year for a couple of these names. If you look back year to date, we'll have more for you after the break. As our country celebrates its 250th anniversary, CNBC spotlights the leaders driving business and the nation forward. My family and I came to the US in 1991 as the very last batch of political and religious refugees from the former Soviet Union. Certainly extremely grateful for the fact that America opened its doors to us. I think being an American by choice is one of the most amazing experiences you can have because you're not sort of borne into it and take no part of it for granted.

And so when we came to the U.S., there was five of us with less than $500 to go for the entire family. My mom became a babysitter and my dad did odd jobs. And I went to a public high school in Chicago and no part of it was gifted. Obviously, fast forward 30 plus years and I did all right. Over the NASDAQ, it is a firm. A firm is a company that builds honest financial products. We provide financing or ability to pay for things over time. You sometimes hear us called Buy Now Pay Later.

And we've now served on the order of 50 million Americans. A firm is my startup number nine, I think. The first one that did well was PayPal and that was startup number five. The ones before failed. And throughout the time, no one told me, hey, maybe you should just go get a job or quit trying. I was like, this is amazing. Like, you keep on trying this stuff, go for it.

Most places in the world will maybe take a chance on you, but if you fail, it's seen as a confirmation of, well, you never had it anyway. While in the U.S. we're saying, well, you know, he's still trying. That's great. You know, go, you know, more power to you. Unlike the rest of the world, in the U.S., there's

a distinct notion of try, try again is a good thing. Like this idea, like, you failed. Yeah, that wasn't very nice. But you know what? You got this you can do it again, you have the energy, you can, you can strive. And so we reward people, at least emotionally, who are not willing to accept failure as a final outcome of their attempts. And so I think that that story is not unique, and that's what makes America so great. All right, welcome back. Huge tournament this weekend in the world of golf. But there's not just

that going on. Joining us, our in-house golf expert and aficionado, the day. dapper. Dom Chu is here. Also with us, KPMG's U.S. Chair and CEO, Tim Walsh, LPGA tour commissioner Craig Kessler and PGA of America CEO, Terry Clark. So we think, Dom, based on this extraordinary lineup of people, this is not just about the tournament that happened this week. No, that was a big deal. It was a golf major for the men, but now the attention turns to the golf major for women coming up this week, which is the KPMG women's PGA Championship. So let's toss it right over. We have news coming on that front. Let's go right to Tim Walsh of KPMG because they are the title sponsors of this golf major event. So Tim, what can you

tell us about what's happening with this particular bit of news and the KPMG LPGA? Again, PGA championship. Tim. We are incredibly excited to be here today to announce that the purse at KPMM. GM's Women's PGA Championship this week is being set at $13 million. And that is the largest purse ever in the history of women's golf. And I got to tell you, when I think back on our sponsorship of this event, which has happened over the last 12 years, the purse when we started sponsoring was about 2 million. It is now 13 million, which is almost a 500% increase. just so proud to be in partnership in this event with the PGA of America and the LPGA tour.

It's pretty amazing. Terry, I'm going to go to you with this one next because Terry, the PGA of America is the group or governing body putting on this women's PGA championship event. It is the second oldest women's major. It's full of history. What does it mean to have the biggest purse in the history of women's professional golf tied to this? particular major. Terry's having audio problems. Terry, the question was, what does it mean to have the highest purse in women's professional golf history? Well, I think it's really just a testament to the momentum of the game right now. We're really excited and proud to have KPMG as a partner in the LPGA. You think about that purse and it's just, it speaks to what's going on in the game right now.

We're creating an incredible environment that the purse is one indication of what's happening in a sport that we're going to be here today and we're kicking off. championship this week that we're at an elevated venue. Hazeltine, we're following up a few elevated venues from here. That's like the new standard for golf. We've got a congressional next year in Bethpage Black, but we're really putting on something that he really showcases the women's golf and the enthusiasm there. You're finding it in our broadcast and our broadcast partners. That's translating into just a product that people are really excited about. And I think the purse is just one indication of that. You know, Craig, because I know that your audio is actually working,

and Terry are both relatively newly installed in your roles as governing body chairs or leaders of your organizations. What does it mean for the LPGA tour to have the kind of elevation in terms of profile and payouts and purses that you guys are putting together? And what exactly is the next step to kind of capitalize while the iron is hot for the LPGA and the women's game in general? Dom, it's a great question. There are quite a few measures of success and purse increases is certainly one of them. I'll tell you, as Tim mentioned, to have KPMG raise the purse fivefold over a 12-year period is remarkable.

I'll also tell you that we've had five different sponsors this year actually raised the purse mid-season, and they tell us they're doing it for two reasons. Number one, they believe in our athletes and see tremendous opportunity, and two, they believe in the future of the tour, and they want to be a part of it for years to come. There are a handful of other ways we measure success as well. on-site viewership, engagement in our social content, the quality of our viewership and how many fans tune in to watch us week in and week out. And the good news is on virtually all of those fronts, we've seen progress over the last year.

Tim, I know that back of the day, when I spoke with Lynn Dowdy about just how important the KPMG Women's PGA Championship was to the overall brand image and portfolio at KPMG, She had nothing but immensely positive comments to add here. What exactly is your plan for KPMG in its sponsorship of the women's PGA championship going forward? Is this a long-term commitment from you guys? Well, Dom, it is, and I think that's been proven by the last 12 years of sponsorship. And I could not agree with Lynn Moore in the fact that this has been just an incredible partnership and sponsorship for our firm. really align to what we do, and certainly a long-term commitment for KPMG.

If you think about what we do every single day for our clients, right, it's helping them meet decisions and solution around technology and AI. This event gives us the opportunity to take all of that work that we're doing for our clients and then power it behind the golfers with AI-powered the most tech-forward event on the LPGA tour. We are super proud. It's very cool. Hey, Craig, it's Brian Sullivan. How are you?

Terry, I know you can't hear me, which nobody's ever said that, ever, that they can't hear me. So maybe you actually can hear me. Listen, I love the fact that it's coming back to Minnesota. By the way, right near Prince's house, you can just go to the tournament of Hazeltine, go check out Paisley Park. If they're doing tours, who knows, it'll come back. Craig, I'll ask you this. Women's Golf seems to be on fire.

We've asked kind of the same question of the men's tour as well. what will be another step that golf can take to just get more people involved, more people playing? Is it time? Is it money? Is it D? All the above? Well, let's start with the good news. Women and girls make up the largest segment of growth in the amateur game, the recreational game over the last five years. It's grown by more than 50%. And by the way, that's not an accident. It happens because leaders like Tim and Terry and their organizations have invested so substantially in the game. So it's working. In terms of the next step, look, more exposure is critical for us. You know, we had a Fortune 100 CEO recently say at one of our partner summits that he thinks the

LPGA is arguably the most undervalued sports property left. And he sees an enormous amount of opportunity. And that's why he and his company have continued to sponsor our organization. We believe when we continue to show up, we get more distribution from folks like CNBC, the Golf Channel, USA Network. When we continue to build stars, we've invested very heavily in our social content engine, and fans start to fall in love with our athletes in many ways like they have on the men's side. We expect more and more people not just to watch, but to pick up a club and go play. All right. The biggest purse in women's professional golf, $13 million. The ante has been upped by KPMG. Thank you very much to Tim Walsh of KPMG, Craig Kessler of the LPGA Tour,

and Terry Clark of the PGA of America for bringing us that news. It's an interesting development here, guys. I'll send things back over to you. Don, thank you. We really appreciate everyone's time on that. It's a big development. Let's get a check now on the small caps that have continued to surge this year. Look at the Russell 2000 of 21% year-to-date.

If you're wondering why, names like Rackspace, Agilon Health, air test systems, and ICOR? I-Corps holdings have all more than quintupled this year. incredible to see, and it's not just about big tech anymore. Power lunch continues after the break. Bad news out of the country of Qatar. Dozens are hurt, 18 are missing after a huge natural gas plant blew up last night. There is a video, the only one we have, of that explosion. It's important to note this was not due to an Iran attack. Qatarian officials say this was an accident. The plant was racing to restart operations that had been affected by an Iranian attack. but back in March. They're trying to repair it. They went quick. Something went wrong.

Massive explosion. Dozens are believed dead or missing. A sad situation all around, one that could also have implications for global energy markets, including U.S. LNG exporters like Schneer Energy and Venture Global, because demand for their gas, American gas, might go up if Qatari supply problems persist. that would keep demand for their exports as well, at least Sheenir and Venture Global elevated. In the meantime, water, not the only thing flowing through the Strait of Hormuz. Ship traffic is beginning to pick up. According to marine traffic by Kipler, there were 17 crossings yesterday.

These are ships, of course, with their transponders on. 35 crossings Saturday, 19 on Friday. Still well below the pre-Iran war average of 100 crossings a day. But again, we don't know how many of those maybe ships turning off their transponders. All of this comes as Treasury Secretary Scott Besson today announcing a temporary 60-day license authorizing the direct sale of Iranian crude oil. Folks, trust me, we know this is a relatively confusing situation.

Literally, this weekend, you could read one thing that says the American Navy is saying the strait is open, and at the same time, minutes later, some people in Iran saying they've reclosed the strait. It is a reminder to be careful about what it is. Iran says, as there are various parties who may be saying different things. Maybe there is no, quote, Iran speaking as one voice. Keep an eye on the map. Listen to the insurers. Listen to the ship owners. And of course, can always tune in to CNBC. More power lunch after the short break.