Power Lunch - S&P 500 rebounds after 2 days of losses, Nvidia leads gain as it reaches $4 trillion market value 7/9/25

Episode Date: July 9, 2025

The S&P 500 rose Wednesday, led by tech, as Nvidia reached a major milestone and investors monitored the latest tariff updates from President Trump. We’ll cover all of the market angles for you. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to our lunch alongside Kelly Evans. I'm John Ford and stocks are modestly higher at this hour with the NASDAX, NASDAQ 100 and tech sector all hitting record highs today. One of the key stocks also hitting a record high is Nvidia as it crosses that $4 trillion market cap mark. First company ever, Kelly, to do it. Number two, Microsoft right now I believe 3.6 or so 3.4 maybe. Amen Javvers has the Fed Minutes. Amen. Over to you. Kelly, the Fed minutes from the meeting on June 17th show that all participants view it as appropriate to maintain the Fed funds rate at 4.5% to 4.5%. Now, the committee said it was well positioned to wait for more clarity on the outlook for inflation and economic activity. Also, a couple of participants, they say, noted that they would be open to considering rate cuts as soon as the next meeting. That is July, but obviously that's the minority position here. Participants note downside. risks to employment and economic activity due to tariffs have declined since April. Now remember, this is the meeting in June, so this took place before the most recent round of letters from President Trump regarding tariffs.

They also say that uncertainty about the outlook is elevated amid evolving policy developments referring to those tariffs. Some participants, they say, noted high uncertainty has the potential to restrain economic activity, but economic growth overall is solid. The labor market, they said, is solid. The unemployment rate is low. inflation has come down, although it remains somewhat elevated in the language of the Fed. They say several participants see business survey respondents reporting,

pausing on hiring decisions due to that elevated uncertainty. They say international trade flows continue to be volatile amid shifts in U.S. tariffs, and they say that increased tariffs are likely to put upward pressure on prices. Overall, here, though, Kelly, the message is waiting for more clarity from the Fed. Back to you. I'm just looking at the market reaction, Amon, maybe a slight lift in. stocks. Ten year was already well-behaved after that good auction last hour. So they didn't comment on who the next Fed chair would be, I imagine. That's not in there. No, we were looking.

We were in the lockup for about a half an hour scouring this document, and I didn't see that. All right. For now, Aman, we appreciate it, and we'll continue to watch for a further fallout from that discussion. Amen Jabbers in Washington. And we're going to stick with Washington, President Trump, releasing new tariff letters to seven countries that outline more so-called reciprocal tariffs if they don't make deal. by the 1st of August, our Megan Kisela has the latest on that. Megan? Hey, John, so about 21 countries have now received those letters.

And the president just said in the last few minutes that more countries, including Brazil, could get letters today and tomorrow. But here's today's round. We can pull it up. The Philippines, Iraq, Sri Lanka, all of these countries facing tariff rates between 20 and 30 percent, roughly on par with what the president first threatened to impose back on Liberation Day in April. So the news here really is the date for them to take effect. has just been moved now from July 9th to August 1st.

The other thing to flag, none of these countries export much of anything to the US. The Philippines is the largest trading partner of today's batch, but their exports make up less than half a percent of total US imports, according to the latest data that we have. Most of the others here make up less than one tenth of one percent of all US imports.

So tariffs could be impactful for any individual companies based in those countries, but on a macro level, this round alone is not going to mean a huge hit for U.S. importers. Now, these tariffs rates could move up or down depending on how negotiations go, but the upshot here is this is the administration's way of trying to gin up some momentum and to strike some deals between now and the end of the month. Guys? Yeah, Megan, any sense of how much these types of moves from the administration have gooseed those trading partners into deals? I mean, we saw what we saw out of the UK, you know, one or two others

since then, but not the amount of traffic that the administration perhaps suggested in the beginning. Not at all. This is a scenario where sort of the reality of how long trade negotiations can take is catching up with some of the optimism we saw from the administration. There is not much of an indication, I'll say, this week, from the countries that have been responding publicly so far, that they are willing to make any moves just because they've gotten a letter now. We saw Japan, for example, saying they're not going to agree to any simplistic compromises. South Korea, They got a letter on Monday saying that the national interest will always come first. So unlike in the first term when the president was able to sort of get countries to the negotiating table more easily

and maybe have concessions coming a little more quickly, we're seeing the larger trading partners at least hold firm here. Maybe some of the smaller ones will say they'll start buying more U.S. exports and doing things to appease the president. But it could still be a tough few weeks of negotiations between now and the end of the month. All right, Megan, thanks very much for now. We appreciate it. Megan Casella. As you can see, investors are largely shrugging off the president's latest tariff announcements, although these are small training partners for the time being. But even the larger ones, Japan, South Korea this week. Stocks are in the green all across the board today.

The NASDAQ hitting a fresh new high. Key driver there is Nvidia, becoming the first company to ever cross $4 trillion in market cap. Just a hair below that level right now. Our next guest sees more upside from here and says there is a substantial underappreciated tailwind for stocks, the weaker dollar. Mike Wilson, a CIO-in-Chief U.S. Equity Strategist at Morgan Stanley. And Mike, actually, this was something Dan Niles brought up last hour two vis-a-vis Apple, which has been lagging. You would think, like, a 10-ish percent drop in the dollar during the quarter should help its results, but obviously AI is a bigger question mark. Yeah, I think for the multinational, there's no doubt that a weaker dollar, I think, is part of the story for why revision factors

have continued to move even faster recovery than we had expected. It's actually as a as powerful as we saw coming out of COVID, which is hard to believe. Wow. And part of that is the tailwind from that weaker dollar. So there's a lot of tailwinds, Kelly. I mean, obviously the tariff, while the tariff situation is not resolved, it's nothing like it was two, three months ago. And the numbers did come down in anticipation of those tariffs.

And so now it's almost a reflexive move from just, you know, the revisions having been so pessimistic. And now we have these other tailwinds, the dollar being one. I think less bad tariffs is the way I would kind of condition it. And then of course the other drivers that we're seeing now with AI picking up, the tax bill going through, etc. I mean, the strange thing about kind of the way the dollar plays into earnings and all that is that we can all see it. We all know the level on every given day. It shouldn't be much of a surprise.

You should be able to factor it into your models and all of that. And yet people seem surprised we had a similar period last year where there was, it must have been a period of dollar weakness or something where it all of a sudden came, or maybe it was the opposite dollar strength came up a lot in calls. And a lot of the stocks moved four or five percent on it. So obviously it's not fully priced in. That's right. And I mean, at some point it does get fully priced in. And oh, by the way, we can't rule out that the dollar will have some strength at some point. In fact, technically, it looks like it may be making a bottom in the very short term. So, yeah, it's an ever-evolving situation. I think the one that doesn't get talked about much here more recently is just the precipitous fall in oil prices. And we know that oil prices now are down about 16 to 20 percent on a year-of-year basis, but gasoline prices are only down about 8 to 10 percent. So that's a new tailwind, I think, they could often. some of the tariff, you know, risk for the consumer going into the third quarter. Because quite frankly, the tariff risk is larger for the third quarter from an earning standpoint.

Because this is where you'll see it start to hit the cost of goods sold, which they were able to avoid in Q1 and Q2 because they were selling cheaper inventory in those two quarters. So, but I think that weaker oil price is going to be a good offset for the consumer in that regard. Mike, I want to get your perspective on Nvidia, not the company itself necessarily so much as what it represents when he huge, well-known companies hit these milestones. I remember when Apple first hit $1 trillion in market cap. A lot of people were saying, oh, law of lodge numbers, what got them to $1 trillion, won't get them to $2 trillion. They're going to have to come up with something beyond the iPhone that's just as big. They didn't. And also, very often, the leverage that these companies get,

not in the debt sense, but in the operating power sense over platforms, the sorts of M&A that they can do, products that they can create might power them to the next level. Should investors be concerned about in video or companies like it hitting this kind of milestone and the idea that maybe they've peaked? Well, not in the short term. I mean, John, you're exactly right. I mean, a lot of large numbers would argue that you can't grow as fast when you're bigger. And that rule holds, okay?

But as we've seen in the last 10 years, these mega-cap companies have kind of defied that logic. But there's good reason for it. I mean, many of these businesses are monopolies. You know, they have great margin structures. And as they get bigger, to your point, they become even more power. So I think the biggest risk is not the law of large numbers, but can they kind of maintain these monopolistic type powers in their business models? And that remains to be seen.

Some of them will, some of them won't. One thing we do know from cycle to cycle is not all of them make it to the next cycle, and I think that's the job of it as an investor, is figuring out which ones can continue to grow at a pace that justify it, and which ones will inevitably not grow fast enough to justify these big market caps. Mike, outside of lower rates, which I know a lot of of people are wishing for, hoping for maybe for Christmas. What's it going to take to get the smaller caps, smid caps, also unstuck here? Yeah, no, I mean, rates is the primary driver in our

view. I mean, that has been our view. It's why we've remained underweight small caps for for multiple years here as the Fed was raising rates and they haven't really cut as much as people were hoping. But it's not just that. It's also, think about this, right? So the president came in this year, they sort of kitchen sink the first quarter, kind of like a new CEO would. You know, they're trying to liberate the private economy, shrink the government. Some of those things have worked. Some of those things are still a work in process. But I think that's the true story now for, I would say, the small caps and also the S&P

493 or the S&P equal weight. Can we get the private economy growing faster now and shrink the size of the government and remove this crowding out feature? I think that's the story for 2026. And AI, and AI productivity is going to be a big part of that. Can we get AI diffused into the broad? broader economy, that, that to me, is going to be probably the most important thing to get right, timing-wise, and also does it actually work? Because that will, that will actually electrify,

you know, this smaller part of the S&P and also the average company that has really been underperforming now for several years. Is that the gamble of the president and the Republican Congress's bill that they have passed into law tax and spending, that this ignites a level of growth that makes all these concerns about the deficits and the impact on the bond market and all of that that makes it go away? That's part of it. It has to be, growth has to be part of the story for us to get out of this, you know, debt burden that we've created over really 30 years, okay? It can't just be about reflating. It can't be about printing money. We have to get the private economy growing faster. We have to get productivity higher. There are solutions on the table. We see them kind of

coming together. And look, nobody can forecast a future. But, you know, the fact that the market it trades as well as it does. I think the stock market is telling us something about this. Stock market is kind of believing that the probability of that occurring is maybe greater than a lot of the skeptics have been saying. Okay. Well, nobody can, but everybody tries. Mike Wilson from Morgan Stanley. Thank you. Well, the future of oil production is at a critical crossroads. As of now, trade tensions are adding another layer of uncertainty. OPEC's biannual seminar is underway in Vienna, Austria, and this comes a few days after a group of OPEC,

nations decided to raise production. Our Brian Sullivan is in Vienna for that meeting. Brian? Yeah, I love the fact that Mike Wilson was just talking about how oil prices are down year over year. It's such an inflationary aspect. People say, well, why do you talk about it so much? Because it goes into nearly everything, right? Oil is not just transportation. We think about gasoline, guys, but obviously oil, petroleum products, natural gas go into cosmetics, pharmaceuticals, packaging, et cetera. Oil is what they talked about all day at the OPEC seminar, basically a conference. dinner, it is, of course, about 815 here at night. The dinner right over our shoulder is about ready to begin. And there's a heavy security presence. Obviously, with everything that's been going

on, Iran, Israel, everything else. I don't know if you could see it. The yellow banners there say Wilkaman, welcome. And there's about 50 police officers with riot helmets just in case. So far, everything has worked out. Now, we were one of the few media outlets that went inside the seminar today. Maddie seen some of our coverage. And while most of OPEC remained fairly, tight-lipped because again, there's so much geopolitical tension going on, particularly around Iran. We were able to get a few minutes with the Minister of Energy for the United Arab Emirates, Suhail al-Mazrui. And I began by asking him basically, if we were to see some kind of supply disruption, meaning Iran, would OPEC and the UAE be ready to fill any gap?

We are partners with the U.S., especially the shell producer. and all of the producers in the US, we are all supplying the same market. And I think we need that production to stay, and we need to see more investments coming, more healthy production coming. Market-wise, no one can manipulate the market, and what is the price or what is the price. We are not targeting a price, we're not targeting a certain volume, we're targeting this stability.

And I think U.S. is a major market, is a major supplier at the same time, and the refining capacity in the U.S. also helps many other countries. So what we are needing is more investment. Shale oil producer, they need to maintain the investments. We need also as a group of 20 to maintain the level of investment that would satisfy. the requirements that the world and the economies would require in the future. The UAE has been investing in the United States. AdNAC has been in the Abu Dhabi national oil company has been investing in the United States. Can we expect more investments from our UAE partners into the United States? Well, definitely.

XRG is one of our companies that are keen and looking at investment. Currently, they are looking at so many investments in the gas, especially in the gas in the US and renewable energy as well. We are a major investor. We've been investing in the US will continue. Any good investment, we will look at, we will evaluate and we will be happy to invest. US is a market that we are comfortable with. We've been investing in the past and we will invest in the future.

There's a real world example, guys. Adnock, the Abu Dhabi National Oil Company and the Carlis Group co-bid recently on a company called Santos. You probably never heard of them. They're based in Australia, but they have a huge presence in Alaska, where we wore a few weeks ago. They made an $18.8 billion bid for Santos. You can see that's an example of investments in the United States. And obviously, the U.S. right now is the world's largest oil producer, but rig counts, Baker Hughes rig counts. They are going down, not up. So we'll see if these lower oil prices guys result in lower output. We'll talk to the CEO of Baker Hughes about it tomorrow morning on Worldwide Exchange.

And in a few minutes, we're going to get one of our favorite guests in person here in Vienna, view Holima Croft of RBC. We'll get her thoughts on a very, very busy day at the OPEC seminar. So, Brian, was that the answer that a lot of the oil watchers in the U.S. are going to want to hear is that others in the Middle East are looking for stability and therefore would step into the gap, should there be some supply shock over there? Well, I think so, John, and I'll tell you what.

It's obviously not just what happened between Israel and Iran and the United States. It hasn't gotten a lot of attention. I don't know why, but two cargo ships have been attacked by Houthi rebels in the last two days in the Red Sea. We talked a lot about the Persian Gulf and the Strait of Formuz.

The Red Sea a little more off the radar. Two ships were attacked one sank and people died. These were not oil tankers, but clearly a message was being sent. You could see the heavy security presence over our shoulder here. So I think there is a very real thought that there could be some supply shock. The market has not reacted to it yet. We're at, what, 68 bucks in change or whatever it is for oil. We're not at 80. We're not at 90. But it goes to show the market's sort of sanguine view on this, but again, not immune to some supply shock. Should it happen because the world is a pretty tenuous place right now. Yeah, that's for sure. Brian, we look forward to seeing you again with Halima. That'll be fun for now. Appreciate it.

Brian Sullivan in Vienna. Lots more show to come. But first, Apple turnover. The company's COO stepping away just a few months after the CFO, plus meta poaching one of its AI execs. What's going on? That's a second Apple pun. It's going on in Apple's core. John, we'll discuss that next.

Welcome back. Google shares dipping a bit as headlines. cross that OpenAI's browser launch may now be just weeks away. Steve Kovac is here with more. Steve. Hey there. Yeah, this is Reuters saying that browser that we heard about last year, the information was the first one to report about this saying that it is going on launch in a couple weeks.

By the way, I don't think this timing is coincidental because perplexity, this other AI startup we talk about so often. Right. They released their own AI browser today. But we actually kind of have a hint of what this open AI browser would be. That's because they released this beta program called Operator, which is Open AI agent can use the web and the web browser for you. So kind of like we were talking about last hour, Kelly,

where you tell your phone, tell Gemini on these Android phones what you want to do. Well, imagine doing that on your PC. You do a lot of work in the web browser. And so it's a similar concept there. By the way, you can try this now if you're a paid user of Open AI. Yeah, you can give this a shot now. I'm curious if you could say something like. So it's likely going to be based on this.

Right, like book me a ticket on Amtrak. That is exactly exactly what it does. Now how well it works and so forth. It's early testing right now. will see when they release it to the public. If it can live up to that promise, that would be nice. But it's kind of a step between this whole idea that eventually a browser might go away, right? And these windows would go away.

And we'd just be talking to the computer and telling it instead of having it fill out the form for you or what have you. But yeah, the reason why you see Alphabet taking a little bit of dip, Chrome, biggest browser by market share in the world by a mile, right? And it's also at risk a big spun off because of the DOJ case. A couple issues I see here. One is the ecosystem. Google, part of Alphabet, spent years building out, not just browser, but Gmail, maps. Like all these services that people use the idea, keep them in the mix, keep their data in the mix, keep them searching, fueling the business model.

OpenAI would have to do arguably more than just have a browser in order to compete with that. Are they prepared with their deeply unprofitable model right now to build all that out? And then there's the privacy question. Sure, they're not selling advertising, but if you're letting you, AI run through all of your personal information, including your credit card to book you those tickets, do you want AI agents accessing that information and doing whatever way that's sure in service of you, but then if there's a glitch of some sort and it has its hands on all of that, I don't know. That's a huge question. I was talking to a CEO of an AI startup yesterday about this too,

and he kind of predicted that eventually, yes, you're just going to give these AI agents your credit card number, your information, and go off and tell it what to do. And instead of apps, we're just going to have these API calls, where just these services are talking to each other in the background. This is kind of a step towards that, what this operator browser is going to be like. So I think that's kind of what they're moving towards. By the way, you talk about building an ecosystem of products and services.

There's a Johnny I product coming from Open Eye in a couple years. So we'll see with that, how that kind of fits into this puzzle too. Yeah, indeed. What will it be? Well, Steve, we also want to talk to you about the executive leadership shakeup At Apple, yesterday the company said the chief operating officer Jeff Williams will be succeeded by Sabi Khan. Effective later this month, Williams was considered a candidate to be Apple's next CEO, now retiring from the company at the end of the year.

And we've got another operations guy, logistics guy. I know a log guy. I kind of cut from the cloth of Tim Cook, who's now in that Tim Cook-air apparent position. Yeah, and this starts the whole conversation over again of who would succeed Tim Cook as CEO. Oh, everyone thought it would be Jeff Williams. If, you know, before this announcement, if Tim Cook announced, hey, I'm going to retire tomorrow. Almost everybody in the world thought it was going to be Jeff Williams. Well, now that's off the table.

So who does it become? We have a couple hints and details from the senior leadership team who already report. We're showing you them right now. There's Sabi Khan who we were just talking about, the new C-O-O. I would also point out John Ternis. He's the executive, the youngest of these men that were showing up here. He is only 50 years old, just a young man. And he's in charge of hardware.

He is considered a leading candidate. Greg Joswick, head of marketing, Craig Federigi. He's in his mid-50s, head of software. So there are a number of different ediqueu could be thrown in there if you want, but also he's kind of aging out. I don't view this, though. We were talking earlier this week about that AI executive who departed from meta. I view this differently.

I view this as, you know, Jeff Williams didn't really have much to do with AI. Again, the operations guy, logistics, supply chains, et cetera. This is less to do, I think. with artificial intelligence and more to do with this board kind of growing up and aging out and having a good succession plan. By the way, it's the second major executive on that team to leave within the last eight or nine months, and that was CFO Lucano Myestry, who was just replaced. But you just wonder if it's either serendipitous or potentially some kind of opportunity or opening, and maybe there's still some months and years that they need to figure this out. But to put someone

in who's going to take this company in a very different direction, of course, still need to sell the iPhone and do all of that and deal with China and everything. something that really signals to everybody, you know, we are now an AI-first kind of company. And they haven't been able to do that yet. That doesn't mean they will never be able to do it. And, you know, again, like we talked about last hour, this idea that they might partner with Anthropic and AI in the way they've partnered with Google and search in order to kind of fill in these gaps. That gives you some more credibility and confidence that they can do it. I don't think they should do it. I don't think they should do it.

You think they should just go ahead and build it themselves? Well, I'm not saying they should go ahead and build it themselves. This whole AI first thing. And it's funny that list. I know Jaws best of those. I've met him 25 years ago. Yeah. Yeah.

But Apple was not internet first. It was user experience first. And there was a time when they were going to. Oh, they need to do something social. They need to do something web. No, really they needed to do, yes. They needed to mobile me. They needed to do Apple's thing within the context of the tools available.

And I think that's what Apple's trying to figure out. That's what the Siri was supposed to be. Yeah. People keep saying that they're late, that they're messing it out. I'm not convinced of that yet. They're definitely late, but are they messing it up? I think this helps them get it out the door in a way that they might not be able to do themselves, though, because these technologies have been proven to work in a way that they clearly haven't been able to get it at work.

And if that Bloomberg report is correct, they found out the anthropic model, it works. And not only does it work, we can transfer it over to your point about privacy to our private servers and run it on those instead of these clouds and exposing all that data. But to your point, the irony is I probably use my phone most now for chat GPT. You know, the usage of those apps, their existence has made the phone itself stick here. And the memory, it's so great. The memory feature is just amazing. Remember everything about you, it's like literally like having personal assistance. Yeah, it's awesome.

Siri, meanwhile, can't even tell you the weather sometimes. But you need it to. You have these other apps available, right? It's really good at setting alarms, though. And timers. And timers, yeah. Plenty of story left for you to cover. Steve.

Thank you. Thanks, guys. As we had to break, let's get a quick check on what's leading and dragging on the S&P today. On the plus side, it's AES, searching on reports that the renewal. Power Company is exploring a possible sale. On the negative side is Fair Isaac, the mortgage lender. Lower again on news that the Federal Housing Finance Agency made me start using Vantage

Score, which is one of their rivals. Stock was down sharply yesterday and down nearly 5% again today. One of the best performers of the past decade as well. We'll take a quick break and peek at the bond market after this. Welcome back to Power Lunch. Global bond yields have certainly been on the move this week. It's settling down a little bit today, but trade tensions are back to the four. from Washington to Asia, rising rhetoric over tariffs,

adding a fresh layer of risk pushing investors to reprice everything from sovereign debt to corporate bonds. The 10-year yield today is finally kind of, you know, coming down a little bit. You can see it there on the chart. It was trading above 4.4% for the second day in a row. But then we had better bond auction, even the Fed Minutes, kind of helping that calm down around 434 is the current this afternoon. Abroad, the German 10-year yield hitting multi-month highs, highest level since April this week.

Plus, the huge move in 30-year Japanese yields, which some would argue is underpinning all of this. We've seen it surge to above 3% over the past week. It was at zero, just probably a couple of years ago. Investors are weighing all the trade negotiations. I actually trying to figure out if this is part of it, a lot of concern that Japan's economy could be damaged as it now faces those higher tariffs in the president's trade war, John, and that's also contributing to some of the concern that's flaring up there and then pushing yields up globally. And all of that, of course, affects stocks as well. All coming up, why tensions at this OPEC meeting are higher than normal. We're going to get back to Brian Sullivan in Vienna, Austria, right after this break.

Energy leaders from all over the world are gathering in Vienna for a key OPEC seminar as the threat of tariffs remains front and center. That's where Brian Sullivan is. And he's now joined by Helima Croft, the global head of commodity strategy at RBC. Brian, take it away. Yeah, Kelly, thank you. Yeah, listen, obviously well known to our viewers, CBC contributor and somebody that knows OPEC as well or better than anybody in the world. Halima Croft with us here in Vienna, Austria, Halima. This was an interesting seminar.

It was not an OPEC media where they would make the decision on output. They did that on Saturday. They advanced the pace, 548,000 more barrels a day in August. But it was an interesting meeting nonetheless marked by who was here and marked by who wasn't here. What are sort of the two or three key. themes that you're going to be writing about to your clients? Well, first of all, this is the first time the ministers have gathered in Vienna in two years. So we have not been having OPEC meetings in person.

This is an important event. And you're right. Who is not here? The president of OPEC this year, the Iranian oil minister, not here. He comes in via video conference. Supposed to be here. Supposed to be here. It's a little unsafe to be here, probably, you know, security issues, but comes in hot on the United States,

hot on Israel, basically says these two countries, countries are threatening global energy security, the precarious security situation that you have been talking about earlier in the show. We also had Russia a no show this year. And interesting, Venezuela was here. Venezuela came in hot as well, denouncing United States, denouncing Israel, and criticizing the United States for its coercive sanctions measures. Yeah, there was a lot of things that were unexpected. One of the reasons we were here is that there is so much more geopolitical tension. I think the security issues, as we could see from behind you where the dinner is, there's a lot, heavy, very heavy. I was joking earlier.

Heavy security presence. Yeah, every police officer in Vienna, Austria is sort of in a one-block radius of where we stand. You heard earlier, we interviewed Suheila Mazruhe of the UAE, that OPEC would stand ready to fill any gaps. Are they able to do that? Well, I think that has been the message that UAE, we had a big UAE delegation in Washington a couple weeks ago. I think that has been the message from UAE. I think it has been a message from countries like Saudi Arabia as well. But they're saying we have to see a supply disruption before we put barrels on the market. And we did have one question about OPEC policy today. So Hal Masri took the question. He basically said, look, we made the decision to go forward with, you know, a bigger than increase

than expected because we think the market can take the barrels. We think demand is stronger than many market participants believe it to be. That's really interesting because oil did rise. when they announced the larger than expected production increase. Yet the stock market rose today. We've got this overarching theme of these tariffs, which may occur in the United States. Oil collapsed 20%. The last time we had the tariff announcement in April,

it feels like the market is either blowing it off or doesn't believe it. What's interesting, Brian, is we had the market sell off when the missiles were targeting Doha, and then we rise more barrels than expected are coming on the market from OPEC. So very, very interesting. I do think for some market participants, they look at the decision to bring forward more production, they say, we are actually drawing down this sort of spare capacity.

It's really only Saudi barrels, but there's this big headline number of OPEC barrels on the sidelines. The more you bring forward production, the more you basically debit those expected barrels. So we've got Baker Hughes's CEO on Worldwide Exchange tomorrow morning, Lorenzo Seminelli. We look at the Baker Hughes rig counts. They're falling.

in the United States, falling in the United States. And I wonder, is it possible that OPEC believes U.S. production will drop off more than expected so they can add more barrels to make up for less U.S. production? They believe that it is essentially going to be room in the market for their barrels to come on. And if you think about these countries with spare capacity, they are actually getting significant revenue by bringing on more volume. Yes, prices have come down, but for a country like Saudi Arabia, it is not yet a disastrous revenue situation because they have more volume. Do you think it will be? I mean, is there a worry that it could be? This is the question. This is the question. The million

dollar question is trillion dollar question is trillion dollar question is what happens in Q4? You have a lot of analysts out there saying we're going to be massively oversupplied and then you have the view in the room today of the IOC CEOs, the OPEC minister saying we've got this. Now what is different than when I was here 10 years ago is OPEC says now, look, look, If there is a problem in the market, we can course correct. We are not locked in if we get some material oversupply situation. So there is a break that they can pull in the event that things turn south and Q4. And there are CEOs here.

Last night I ran into the CEO of Shell while salon, not on camera. We were just ran into each other literally out at night. BP is here, which is interesting because there's rumors. Those two may end up together. What do you make of the fact that there is a CEO presence here? Is this kind of a newer OPEC that like my light broke and then came back, that OPEC has tried to come into the light? Well, we have had.

The one thing that's really great about this seminar is you do have representation from like a wide variety of people in the energy industry. So you do have the OPEC ministers. You have non-OPEC officials here from governments. You have CEOs. You have think tank officials. You have, you know, a lot of different people who focus on the energy environment. So it is a bigger party than the typical OPEC meeting. And where we used to stand in a stairwell and then sort of trample each other to get upstairs,

Halima Croft will let you get back in there. Thank you very much. Kelly and John, I mean, that's the thing. It's kind of an OPEC that's trying to unveil itself a little bit to the world. Tomorrow, one of our sort of focuses is going to be on what is OPEC now? What is the organization? A lot of Americans, this shadowy organization behind closed doors, chopping on cigars, buying and selling.

We're going to try to shed a little light on what exactly the organization is and what it is not. But I'm going to say goodbye. I'll see you in the morning with the CEO of Baker Hughes. Lima Croft. Thank you so much. Back to you guys. Long day for you guys out there. Brian, thanks.

Halima. Really appreciate it as well. Well, let's get over to Courtney Reagan now for our CNBC News Update. Courtney. Hi, John. Well, President Trump said today there's a very good chance Israel and Hamas could strike a ceasefire deal this week or next. The comments came after he met with Israeli by minister Benjamin Netanyahu, both Monday and and Tuesday at the White House.

Netanyahu said the meetings focused on freeing Israeli hostages in Gaza. More than 2,000 senior ranking NASA employees will reportedly leave the space agency under a push to decrease staffing levels, according to Politico. Nearly 900 of the losses are among the high-level GS-15 positions, which are considered top-level technical and supervisory roles. The departures make up the bulk of the nearly 2,700 civil staff that agreed to leave the space agency under the Trump administration's efforts to trim the federal workforce. And Apple is reportedly in talks to secure the U.S. broadcast rights for Formula One

when the contract with ESPN comes up next year. That's according to the Financial Times. It follows the success of the F-1 movie starring Brad Pitt. The report comes at the same time. Red Bull Racing announced the firing of Christian Horner, who had been the team principal for 20 years. John, back over to you. Court, thanks. While still ahead, the summer camp for billionaire, so-called Tech and media heavyweights gathering in Sun Valley, Idaho for an exclusive week of dealmaking and announcements. Our Julia Borsden is there. She's going to join us along with one of the key players next. Welcome back to Power Lunch. Tech Titans, media moguls, and high-profile investors all gathering in Sun Valley with the growing uncertainty around tariffs and their impact on the global economy. Our Julia Borsden is there as well and joins us now with a special guest, Julia.

Thank you. Thanks, John. I'm joined now by Casey Wasserman, who runs Wasserman, which is a sports, media, and music agency. And also, you run LA 2028, the Olympics Committee for Los Angeles. I understand you have some big news to announce on our air today. What is it? Well, we're excited to announce that Uber has become the official transportation and on-demand delivery partner of LA28 and Team USA. We're lucky to be able to partner with such a global leader, in both those categories to make the experience for athletes, fans, officials, and the city of LA, much better by our partnership with Uber. So in some markets, Uber is partnered with Waymo, but there's no mention of Waymo or self-driving cars in this release. What role will self-driving play in this Olympics? Well, thankfully, we got about 1,100 days from today to opening ceremony, so I imagine it will

evolve a lot. But with Uber as our partner, if they think that's an important part and an executable part of the plan, I'm sure it will be part of the do. delivery and we'll take their time to get to that point. So early Olympic plans pledged to have everyone arrive via public transport to ticketed events. Here you are doing a deal with Uber, not public transportation. What does it say about the complication of operating in my hometown of Los Angeles, which is a

car city? It is. And I think because it's a car city, we have to be appropriate for what our city allows for and embraces. And so let's start with the entire Olympic movement. volunteers, athletes, officials, volunteers will move by transportation that we provide, which means we will double the size of L.A. Metro. There's lots more public transportation in L.A. than there ever has been,

and that will be a primary source. But in some use cases, Uber is now a new version of public transportation, not from a cost perspective, but from a shared use perspective. And that's an important part of our delivery. And in the end, some people will still want to drive their cars. We can't obviously control that, but the environment won't. be entirely conducive to that given security parameters and the unique delivery role of the Olympics is in that. Kelly? Thanks. Casey, if I could just pivot you briefly while we have you just to kind of

the bread and butter business sports management and all the rest of it that you do, there's going to be a whole overhaul of the NIL system next year. I think you guys worked with Nike maybe to secure some of their early deals. I'm really curious what this new clearinghouse is going to mean in terms of, you know, is there going to be more money going into these deals or less? Is it just going to shift around in terms of the kinds of teams that will benefit or be hurt by it. What are you hearing? What can you tell us? Well, unfortunately, I think this solution and the announcement is a little premature because to have a clearinghouse that people don't know what it is, don't know how it works, and don't know how things are valued, it's just going to make a

crazy environment, probably a little bit crazier. Yes, there's direct pay from universities to students now, but beyond that, I think you're still going to see a fair amount of Wild West behavior like you have seen since collectives and NIL started. And I still think we got a long way to go before we get to a solution that is both appropriate and practical for student athletes and universities. What? And I'm glad you. Go ahead, Julia. I'm sorry. I was just, I was just going to say, Kelly, sorry. Quickly as a follow-up, Casey, what might that look like? Because a lot of people are extremely confused by the new system. But is there anything that for you would be more sensible? Yeah, look, they should be confused because it's confusing.

The answer has to be federal legislation. You cannot have every state deciding what their rules are for compensation for student athletes, how the NIL system works, what are collectives allowed to do? Are they allowed to exist? What does it mean to have a salary cap, if you will? What does this clearinghouse have the authority to do? And so there has to be, at some point, federal legislation, to resolve this across the country for all student athletes and all universities.

Casey, you want to make sure to get your perspective on sports streaming. hearing increasing reports that Apple is going to be getting those F1 rights. We have YouTube exclusively streaming one of the first NFL games of this season coming up. We're seeing so much fragmentation of sports and media. What does this all mean for your clients and the media business as a whole where it's more complicated to figure out where you can watch the sport that you want to watch? Well, I think one of the unintended consequences of the dismantling of the bundle is we've lost the guide. When there is a bundle, you have a universal way to find out what and where things are on.

And so that needs to be solved for because it's not fan-friendly. The technology companies leaning into sports is a very simple thing, which is sports is unique and predictable in terms of its audience. And that is very rare in the media world. And so YouTube having a football game, F1 going to Apple, if that's in fact what happens, they know what their audience is. They know no one else can have those live rights. and there's a lot of value to be created in that. In the end, the more value that accretes in the system, athletes are gross revenue participants.

So in the end, growing the pie is good for everybody, and athletes directly participate in that. Well, we'll have to leave it there. But growing the pie is certainly the story, as a lot of folks here in Sun Valley, look at the value of those sports rights. Casey Wasserman, CEO of Wasserman, as well as head of LA 2020.

Thanks so much for joining us here in Sun Valley. John, back over to you. All right, Julia, and thanks to you. Well. More Power Lunch right after this. Before we go here at Power Lunch, Nvidia has searched into literally uncharted territory as the first ever public company to cross the $4 trillion market cap mark. Shares also rallying to a record intraday high.

That meteoric rise reflects explosive demand for Nvidia's AI processors with data center clients and tech giants, snapping up GPUs for applications from generative AI to high performance computing. Kelly? Yeah, we, I mean, listen, as mentioned, it's fun to just run through. It's not hardly in VINI. There's tons of these companies now trading at multi-trillion dollar levels. And Apple was close to being the first four trillion dollar company back in December. Now it's all the way back down to 3.1. Yeah. So just a reminder, it can go both ways. But still, congrats to them,

huge run here and an epic run off the lows especially. And if you're wondering, well, it can't get any better than this. Why, you can't buy stocks here. We're at all-time highs. We want to highlight an interesting Twitter or ex post from Creative Planning CEO Peter Malook. He's been on the show a number of times. And he reminds us, since 1989, money invested when the market is at all-time highs, John, has actually outperformed money invested on any given day. He's talking about the S&P Total Return Index, September 89 to July 25, which shows over a one, three, and five-year period. You buy at the record highs, you outperform all other time periods. So, I don't know.

That just means stay invested, right? Yes. Like, don't just invest on any given day. Right. Invest on every given week or month or whatever. And don't have Fogie, which is the fun acronym Jason's why I wrote about in the journal the other day. Fear of getting in. A lot of people have that after good stretches, right?

You know, I think people are sometimes happy to jump out at all-time highs. They're really tough to know when to get back in or if to stay in at these levels. Yeah, it's like a party, right? Like a good party. It's never too late to go. But if you don't go, right, you ought to have FOMO when it comes to the market. Not, not, don't be a fogey. Right, exactly.

So don't worry, everybody, whatever's happening with NVIDIA and all the rest of it. And speaking of which, the Dow is actually heading back towards session highs right now. We're up about 189 points. Yeah, party's not always fun, though. So you've got to have a strong stomach, just like with some parties. And we'll see how we close today. We're going to be some headlines, InVIDIA, and otherwise. And we'll see you on overtime for that.

Yeah, thanks for watching PowerLum.