Power Lunch - S&P 500 rises after Nvidia’s strong results, but gains are muted because of trade policy confusion 5/29/25

Episode Date: May 29, 2025

The S&P 500 is up modestly as Nvidia shares rally post-earnings. But the gains are somewhat muted, with investors cautious following a salvo of judicial developments surrounding President Trump’s trade tariffs. 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.

The tariffs may be doomed and Jay Powell and Donald Trump hug it out at the White House. Welcome to Power Lunch, everybody. Well, maybe there were no hugs, but news in the last hour that the Fed chair and the president did have a meeting today is a big deal, along with an obscure American court ruling that Trump's tariffs may be invalid, all topping your money news today. Oh, an invidious stock. Well, the Trump administration is already firing back on that trade court ruling, saying moments ago they planned to take the tariff case to the Supreme Court on Friday.

There is a lot going on. InVidia certainly could have been your top market story today, but we've got two big pieces of political and money news for you. First off, in really just the last hour or so, we learned that Fed Chair J. Powell and President Donald Trump did meet at the White House. That could be a sign that the well-known, shall we say, frostiness between the two men could be starting to thaw just a bit. Also, a rather obscure trade court saying that many or most of the planned tariffs may be invalid or illegal. Now, the next move may be in the hands of the Supreme Court. There's certainly a lot of D.C. news to digest that could impact the markets and your money. Megan Kisela is at the White House with more on both. Megan.

Hey, guys, a lot of moving pieces here today, as always, but just in the last hour, learning that Federal Reserve Chairman Jerome Powell, as you said, was here at the White House for a meeting with the president at the president's invitation. Now, the Fed saying in its readout that the two men discussed economic developments, including for growth, employment, and inflation, and that Chair Powell did not discuss his expectations for the path forward for monetary policy. Just in the last few minutes now,

we also heard from White House Press Secretary Caroline Levitt giving the White House's readout of this meeting. Take a listen. The president did say that he believes the Fed chair is making a mistake by not lowering interest rates, which is putting us at an economic disadvantage to China in other countries.

And the president's been very vocal about that, both publicly and now I can reveal privately as well. So the president saying to the Fed chairman that it was a mistake not to cut rates, even as in the Fed's readout guys, the Fed chairman was clearly very much sticking to Fed independence, saying that they were going to be dated dependent essentially and that they would be following their dual mandate as always. So Powell's sticking to his line, President Trump making his voice heard now directly to the Fed chairman after we've, of course, heard him saying these sorts of things

over the past few months on social media. Oh, to be a fly on the wall in that meeting. I would have loved to have seen just even the body movements, the facial expressions, et cetera. But we have to move on because what would have been, or maybe still is, this sort of semi-top story, is that this rather obscure court, this trade court, did they invalidate the tariffs, Megan? Or where do we stand right now? Absolutely. The court ruling unanimously, three judges here saying that the president does not have the authority

to impose the tariffs as broadly as he has. the reciprocal tariffs, the 10% baseline tariffs, as well as those fentanyl tariffs against Canada, Mexico and China. But a lot of moving developments on this today, the latest one being that the administration has requested an emergency stay that would leave all of the tariffs in place if it is granted. They said just in the last couple of hours in a filing that if they don't get interim relief, they will go to the Supreme Court tomorrow to avoid the irreparable national security and economic harms at stake. The administration lawyers have been arguing that without a stay that would allow the tariffs to remain in place,

that would essentially undercut the administration's negotiating position and weaken these geopolitical ongoing talks. So we will have to see if that comes in the next 24 hours. In the meantime, if they don't get that stay, the court gave the administration just 10 calendar days to stop collecting these tariffs. So many more pieces to come between now and then, but that's sort of what we're looking at next. And then somebody asked me, do you think that people would claw the tariffs back? That would be an interesting take, but we'll save that for another day. Megan Kassela, thank you.

All right, your next guest calls the trade court ruling a, quote, judicial smackdown. He also talked about the possibility of this happening all the way back in April. Watch this. I don't think any statute, including AEPA, the one the president has invoked, that gives the president unlimited authority, just complete carte blanche to impose tariffs, any way he wants. I'm not sure, you know, when that might be overturned, but I think the Supreme Court eventually is going to overturn what Trump has done. So while the anti-tariff troops are taking a bit of a victory lap right now, let's also realize this is not over. The Supreme Court,

as Megan said, may get involved and could overrule this trade court ruling. Or maybe the White House finds another way around some of these tariff issues. Either way, one thing is clear, as goes tariffs, so may go the market and your money. So what happens really matters to you? Let's talk about all the man you just heard from. That is Andrew LaPereeree. He is the head of U.S. policy at Piper Sandler. We gave you a little plug there for that call back at April.

But hey, that was then. This is now, Andy. What do you think is going to happen now? Well, I think that the administration has a really bad argument. I mean, they basically are arguing that the president can declare a phony emergency and then just do whatever he wants on tariffs. And I don't think IEPA or any other statute, as I said back then, and I think it's still the case. And as the court said yesterday, you know, if you look at that IEPA statute, it says, you know, there has to be a bona fide emergency.

The remedy that you're going to put in place under IEPA, under the law, has to track what the actual emergency is. So you say, hey, we've got fentanyl, so we're doing tariffs. The court said that doesn't, that doesn't job. Congress didn't write the statute to give the president that kind of authority. So, you know, you've already heard what, what this strikes down. I think there are different statutes that are out there in the court decision yesterday referenced them. So there's Section 122. If we have a balance of payment issue, the president can impose 50, up to 15% tariffs for up to 150 days. So there's lots of other tools in the toolbox for the administration. They can bring back a lot of tariffs. But I think what they can't do with this IEPA ruling is they

can't do just across the board tariffs. They're going to have to justify their tariffs, either on a country-by-country basis or product-by-product basis. And so I think ultimately the Supreme Court is going to side with this unanimous panel because the argument, I think, is a, I mean, it's almost a slam dunk. I just don't understand how you could make the argument the president can just do whatever he wants on tariffs. Andy, we're showing three other options he could pursue, actually six of them. And it's that sixth one on the screen now.

I wanted to bring up Section 338. This is the Smoot-Hawley rule, really, that goes back to 1930. We were talking to Dan Clifton last hour. He said, you know, why bother going the 122 route? That's the 15% you know, for 150 days. He said, 338 is much more broad. As far as I understand it, you can impose tariffs up to 50% on a trading partner. And if they retaliate, then you can do even more.

The country could be embargoed. So would you expect that to be a route they pursue? And would there be any legal problems in doing that? I think there would be a legal problem in doing that. I wasn't able to see much of what you had. on your screen but I think what 338 the problem for the administration if they want to invoke 338 is it 338 requires that the administration show that the unfair trade practices that that other nation is engaging in discriminate against the U.S. and are unfair to the U.S.

so that basically it's unequal treatment for the U.S. compared to other nations so you know that you couldn't possibly just do a 10 percent across the board tariff in site 338 Section 338. So I don't think that works. I mean, you know, one of the things that there's actually another ruling that went against the administration that came out a few minutes ago. And what on the same. Yeah.

Yeah. And what that ruling said, you know, which is a very important point is, you know, what's the use of all those statutes that you just listed there? What is the use of them if by passing AEPA, Congress just said, Mr. President, do whatever you want? And so they didn't do that. Congress didn't do that. And that's why you have all these distinct tar and trade rules and regulations. I mean, I should say trade laws and sections of them that allow the president to do this. So I think that 338 is not a blank check. None of these

are a blank check. They all can apply in various circumstances. So president's got a lot of tools. He can he can do a lot of tariffs. He just can't do anything. Andy, the 122, I mean, the court itself basically kind of seemed to say you could go the 122 route and impose up to a 15% tariff, I guess for up to 150 days. Maybe that can be extended. A lot of people are building that into their base case at this point. Do you think that that would also be inappropriate? No, I think the president could do that. And I think the court decision yesterday, a green lighted it. You know, it just said, look, this is, you know, in making the case of why IEPA can't, doesn't allow the president just do whatever he wants because it's a trade

deficit. The court said, look, there's this other statute that Congress passed that says, if there's a trade deficit, you can do this. So by obvious implication, and this is how the, you know, court looks at things. If Congress already had this other statute, then what's the point of it? And so it means that by implication, they didn't just give you a blank check in IEPA. So I think the president could use it. And I think that what you're hearing from the administration, I think given where the president's head is at, I think he's going to most likely bring back tariffs using these other statutes.

So it's a setback, and I think a big one, but it doesn't mean he doesn't have a lot of other tools. We've made a good chunk of our audience sort of mini experts in trade tariff law, which is fantastic. But can now connect the dots to the other side of Piper, Sandler, which is the market and investing side, do our viewers and listeners care about how this ultimately plays out? Is what we set at the top? As go the tariffs, so may go the market. Is that accurate? Well, obviously, there's a lot of factors for the market, but I do think that

this is a, what the president did put in place is a historic policy shift, something, you know, the likes of which I don't think we've really ever seen. I mean, in terms of, you know, people taking down their GDP forecasts by percentage points overnight. And all the time I've been in Washington, you've never seen a policy that immediately, negatively, would have had that kind of impact. So I think that this tariff issue is very important to the markets. It's a really momentous policy shift. So if he uses aggressively all the other tools available to him, he can get that effective

tariff rate back up to where it was, well, you know, where it was yesterday. before that court ruling. All right. Andy, appreciate it for now. Thanks for your time today. Thank you. Thanks for having me. Andy LaPereere. Let's turn into the market impact. Our next guest says the S&P can go up more than 10% between now and year end.

And the latest ruling on tariffs gets us closer to a trade resolution. Joining us to explain is Tom Lee, the CIO and head of research at Fundstract Global Advisors and a CNBC contributor. Tom, are you thinking through this in the sense of kind of what path tariffs are ultimately going to take? or can kind of look beyond that now at some point and just say it's just not going to amount to enough that it derails the market from rallying? It's a little bit of both. I mean, I think in the near term, of course, the visibility on tariffs has gotten messier because now we have the judicial system weighing in on what can be done and the response from the White House. But because I think the scope of what can be accomplished with tariffs is actually shrunk, it means when we think outside the next couple of months, I think that ultimately it's pushing us closer to a resolution.

Because now the bid ask between like what other countries might accept versus what the White House is trying to achieve is actually shrinking. And that gets us closer to the end game. So I think this is actually a net positive for stocks. And I can understand why markets are confused. But to me, I think the equity risk reward is still better today than it was in February, 2025, when the S&P was at its old highs. Right. So, I mean, in particular, do you look at the chip rally? Do you look at Nvidia, which is, for what it's worth, kind of coming back down to Earth after that big rally on the heels of its earnings last night? I mean, is that where you would look to kind of press into? Or how do you think about what the rally might look like between now and your end? Well, I think that when markets really believe the tariff sort of story and saga is behind us,

I think it's going to be a very big cyclical rally. So I'd be expecting industrials and financials and tech, especially the washed out tech, which includes the Meg 7 to really lead. But I also think that would include small caps because small caps have really been hammered by all this economic uncertainty. And so once that visibility returns, and then we think about 2026, and that's probably when the Fed is, you know, more doveish than they are now. That's a tailwind for risk asset. So I actually think, you know, weakness here should be bought, and I'd still be buying dips.

We got a combination. We know all of Wall Street's really just reading Fund Stratt, Tom. We get that. But they also sometimes publish their own stuff. So we got kind of a collection of a lot of comments this morning. Barkley said this, and I thought this was an interesting take. and then you can respond or not. It is not clear this is a catalyst for a sustained new risk on,

given the complications it could pose for tariff revenues, the tax bill and the bond market. And the point I think they're trying to make is the tariffs are supposed to bring in all this money that could influence how the tax bill ends up, and of course that could influence the stock market. So if the tariff money goes away, even temporarily, does that impact overall DC tax policy?

And thus, the equity market. Well, I mean, I would chalk that up to another piece of a wall of worry. You know, over the last couple of weeks, as markets rallied, our macro clients have actually been really fighting this tape. They've been very skeptical of stocks rising, and we can see it in the prime brokerage data where gross is actually high, but net is low, meaning hedge funds are shorting this rally, and we know there's still a lot of cash on the sidelines. So investors are looking for excuses for the market to fall.

I mean, I'd say even that interpretation from Barclays is just another good example. I mean, previously, we didn't want high tariffs. Now someone's arguing that if tariffs are lower, it's bad for the fiscal situation. I almost think someone's trying to say heads I lose, tails I lose. But at the end of the day, if we get a tariff resolution, that's good for stocks. And I think companies survive this gauntlet of, like, terror. That's why multiple should be higher next year. What would be your kind of part in comment then, Tom, on the whole, you know, the kind of events that we're going to have to climb to get through that, which include whatever further announcements may be coming from the White House on tariffs, which include, however the bill kind of eventually gets passed in the House, which include the debt ceiling that we're likely to breach as all of this is happening.

I mean, is it just noise? I mean, it's not noise. Kelly, but I think if someone takes a look at everything that happened between February now, so the last three months, we were told that we'd have a calamity because of Doge. And Doge, while it's been effective, you know, has not derailed the economy. And we were told that the Fed pausing was going to be a calamity for markets because the Fed was worried about inflation. But as you know, the bond market hasn't necessarily had that big a spasm.

And we were told the tariffs were going to send us into an economic Armageddon. And as you know, earnings have shown that things are fine. So I think at the end of the day, I'm just going to take the other side of all the arguments for calamity and say that I think American businesses are pretty resilient. I mean, literally, general news shows were leading with how we're doomed and retirees are being wiped out. And it was bizarre. I would say leave it to us. But that's for a different segment. Tom Lee, Fundsrack, Global Advisors, always a pretty segment.

appreciate your bullish take because guess what? It's been right. Tom, thank you. Thanks. All right. On deck from oil to OPEC and maybe even Alaska. No one knows energy policy better than Halima Kroft and she is here. Plus, we continue our real world look at what is happening at the ports. Gene Soroka runs the port of Los Angeles and he will join us live with what is actually happening right there on the water. Here's a big question. Is $50 oil just around the corner yesterday. OPEC Plus deciding to keep crude oil production on change, at least for now. And even as oil prices move a little bit higher the last couple of days, the direction this year certainly has been lower. Gasoline prices, the good news,

falling across America, probably where you are. But there's a real question about what happens with the oil supply over the next few months, especially with a massive OPEC meeting on Monday or Sunday, and then an OPEC convention coming up at the beginning of July, with us to kind of tie it all together, our friend, Leymokroft, head of global commodity strategy, at RBC Capital Markets and, of course, a CNBC contributor. So OPEC's been kind of just doing its own thing very, very quietly, adding more barrels, and yet, oil is it $61 here? Where does this end up?

Well, this is such a barrel. Just the voluntary producers, the countries making the voluntary cut have been phasing back in barrels. And so the real question is they had a meeting earlier this week, and they basically decided the collective cut would stay in place through the end of 26. With the voluntary cut, we will see on Saturday. And we expect them to add in another potentially three-month increase. So a 411,000 barrels of additional supply coming in in July. So the question is, do we get more?

Is it potentially one month? And so this is what the market is really waiting to see, is how much are we getting from OPEC for July? Nobody could answer that question and have their microphones to attach. I know. Let's just let's just let everybody know. We were having a microphone issue. If people just saw what, I remember years ago a guy's mic fell, and he didn't know it, had to, like, reach over to his lap and basically, I'm like, excuse my hand.

I have become very good friends with your tech person. No, that was your blushing. It's fantastic. The microphone's on now. So that's hopefully everybody, that was just live TV. I'm watching your face, Brian, like, okay, what's happening now? I'm like doing this. I'm like, just keep talking.

They're going to touch you. Things are going to be awkward. It's going to be fine. All right. Just power lunch. And it is. And it's live television. And it's beautiful.

Okay. Does the world need more barrels? So right now does the world need more barrels? We are not in an undersupply situation. The question is going to be, and we heard UAE's old minister out this week, saying demand is coming in stronger than people anticipate. And why I think we need to watch this trade war story is if we do get an off ramp to the trade war, that has been like the big thing hanging over market sentiment.

Yes, there's not OPEC supply we're watching, but we've had. this sort of wall of worry about demand, principally because of tariffs, the impact on countries like China. So if we are potentially parking the trade war dispute, that is one factor that will no longer be weighing down oil prices. Yeah, I'm just trying to sort of think through the, you know, a little bit of what you were talking about with the Russia issue and all of that. I mean, the president's rhetoric on it is dialed up. Just walk us through the possible outcomes. We have two major negotiations we should be watching. What happens on Iran and President Trump has signaled he wants a deal on Iran?

Then we have the situation on Russia. And remember, President Trump came in being like, we're going to get a deal down with Russia. On Iran, he was like maximum pressure. We kind of have flipped places right now. True. Iran looks like closer to a deal. Russia looks like we're maximum pressure back on Russia. We have Congress talking about additional sanctions on Russia.

500% sanctions. 100%. Wouldn't that affect that? Germany and all these countries? Oh, it would Japan, Germany, a number of countries that continue to import Russian molecules. That would be really, really challenging for them. President Trump, though, has signaled, like, if I don't get progress with Russia, we're headed down the path of more sanctions. And so I do think market participants have to weigh up. Am I getting more Iran barrels? Am I getting more Russian barrels? I think we're likely to get more Russian sanctions

if we don't get progress on those talks. And the question on Iran is, what does a deal look like? If President Trump does get a deal, can he sell it to Congress? Because most of the sanctions on Iran that impact energy were put in place by Congress. But wouldn't it be convenient if those barrels came back on the market at the very time that some of the Russian barrels made? 100%. You'd have to sell Lindsey Graham, Tom Cotton, Ted Cruz on that trade. But that is something we'd be watching very carefully. Russia sells a lot of oil, but they sell a lot more gas. And I know the Nord Stream got blown up by somebody. I don't know. Something happened to it.

But as we've shown our viewers, Russia still sells a lot of oil. of natural gas around the world via LNG. Here's the thing. The White House wants to build a $40 billion pipeline in Alaska that would go from the north slope, Prudeau Bay, all the way down near Anchorage to Nkiske, and then export it and sell it to Taiwan, China, Japan, etc. It's about 3.5 billion cubic feet a day, which is about one LNG shipload. I will, by the way, we'll be in Alaska.

I'm going to Alaska this weekend. I will be there live on Monday. It's more than exposure. I'm going literally to the top of Alaska to tell this story. We've got some amazing guests, including the Energy Secretary, the Interior Secretary, the governor of Alaska, a couple senators, probably some foreign dignitaries as well. That'll be live on Monday. Let me ask you, it's ahead of that trip.

This is 3.5 billion cubic feet. It's not huge, but it's not small. Does the world need it? Well, this is the question for President Trump. President Trump has really said, I am the President of American energy dominance. And he's making U.S. energy access a part of the trade negotiations. And Europe, this is an important part of our conversations with Europe, is we will give you lower tariffs if you provide more access for U.S. energy, particularly gas, into European

markets. This is why we bring it all back to Russia, though. The Russians are unlikely to accept any deal that doesn't entail them getting back their market for oil and gas. So the question is, do you need Russian pipeline gas, Russian LNG, and U.S. LNG? Probably not. So the question is, how does this all work with efforts to craft an end of the war in Ukraine, as well as more market access for the United States? Now, European officials are out there saying, we're not taking more Russian gas. Germans have said we're not repairing Nord Stream. But a lot of European corporates are starting to put their hand up saying, you know what, we would just like the cheapest form of energy and Russian pipeline gas happens to be the cheaper molecules. Well, it's a big story,

3.5 billion cubic feet, about one big ship a day, about 50,000 average-sized homes powered per year for the North Slope, Alaska. It's pipeline. It's been around for about 20 years, the dream. This is not new. But cabinet members are going this weekend. I will be going with them. We will all be watching. Your 50th state? It's my 50th state. It's my last state where I've spent the night. Mexican restaurant. Mexican restaurant. But we still want... The highest restaurant in America, the most northern restaurant in the United States, is a Mexican restaurant. Cruises Mexican Grill. getting. Are you going to be shunning pictures from cruising? I hope so. I just got to get there first. I would say you dropped the mic, but littlely you dropped the mic. You didn't, but it was an amazing

live TV moment. Haleemakroft, thank you. Thank you for having me. Thank you. Still ahead, we'll go from oil to copper with prices on the rise and demand expected to double over the next decade. Market Navigator has an under-the-radar way to play the copper market for you. Welcome back to Power Lunch. Copper prices have been climbing this year. It's often a good macro sign. you'd think, along with demand. Global copper usage is also expected to double over the next decade in part because of the clean energy transition. Our next guest is here to tell us what's fueling the demand and rally, and if you should get in on the action, Phil Strebel is chief market strategist at Blue Line Futures. Phil, we have not talked copper in a while. So what's going on

and what's the trade you see? Yeah, copper, it's one of our favorite commodities in the metals complex. It often acts as a leading indicator for inflation and the economy. You've got three main factors that are driving prices. It's the tight above ground inventories, the growing demand, and then the mining disruptions we've seen. Everything from China, the LME and the Shanghai, they are all suffering drawdowns with the LME at their lowest level for inventories in about two years. And then the flows of the above ground inventories seem to be just making their way straight to China with those imports. So it's a domestic grid spending that's going on in China remains strong. Their power consumption levels reached record highs in 2024 because of heat waves. They're having a huge.

heat wave. They're battling that right now. And electricity demand, it surges to battle the, you know, combat those high temperatures through air conditioners and things like that. So, and then all you're also seeing a lot of the mining supply continues to tighten. You've got unplanned disruptions. And global copper demand is seeing growing at 2.3% versus world supply, only 1.3. Yeah. I mean, and you note that this hasn't even been caught up in tariff issues like we've seen with steel and aluminum. So basically, you're just bullish on it, period. We're trading where are we around $460 or so? You see this going over $5?

I think so. I mean, we like the micro copper because of its size and scalability. We like to buy it around $4.65 with a stop loss at $450. So you're risking about $375. The target's going to be $5.10, which would have a gain of $1,125. Now, on the equity side, we like Freeport Matt Moran as well. All right. You've got a stop loss in this, too, if it goes down below $450.

Phil, appreciate you joining us to draw our attention to it. Thanks so much today. Thank you. Phil Strebel with Blue Line. Brian, over to you. All right, Kelly, thank you. Coming up, how has all the tariff back and forth really impacted trade into America? You're going to find out with Gene Soroka, the port of Los Angeles, but only stick around. Oh, welcome back.

If you remember, a few weeks ago, we took you live on the ground and on the water to California to check on how ships and trade were really doing. We weren't looking at just data. We were there to show you ships in the real state of cargo. So let's kind of stay on this unique reporting. Gene Soroka is the executive director of the port of Los Angeles. They are the busiest port in America every year and home to some of the most impressive import and export businesses in the United States. Gene, it's the perfect day to have you on. Many tariffs obviously have been walked back to the last couple of weeks.

And now, of course, today, this trade court ruling that may or may not invalidate some or all the tariffs, we don't know exactly what's going to happen, but you do know what's happening now and will happen with ships on the water. How's it looking? Good afternoon, Brian. It's a relatively slow day here at America's Port. We've got eight container ships in and working. Normally, this time of year, we'd see about 10 to 12. And what it also means is an impact to our dock workers. Job orders for today's dayside shift down 40% compared to where we should be. I thought we're supposed to see this bounce back rebound. Gene, I understand it takes a few weeks. We've been there in. enough to understand that from Shanghai or Korea or wherever, takes about three weeks, maybe give or take, to get to you at the port of Los Angeles. Is there a rebound in the next few weeks?

Not really, Brian. There's a little bit of an uptick in reservations or cargo bookings, and I'll explain why. 90 days of this reprieve is a short time in our business. That's typically the amount of time that it takes to put an order in, get the goods manufactured, and ready to ship here to L.A. So what importers are telling me is that they're scooping up products that were already completed, but not shipped out because of the sky high 145% tariffs. Then the second section is those products that were in process based on orders that had already been tendered. They're going to wait for completion and honor those contracts and ship over.

What I'm not hearing are a lot of new orders going into factories because still these tariffs are very high, adding to the price and purchase of those goods. So with the whipsaw effect of information that continues to come out on trade policy and tariffs, many continue to take a wait and see approach. I'm curious about that whipsaw effect, Gene, it's Kelly here, because we've also heard that when demand kind of comes back very quickly, you're getting all these surcharges. You know, you're facing now kind of cost issues, even to move the product that you're relieved to be able to move without as high tariffs as you thought you might have. It's super complex, Kelly. the liner shipping companies have to reposition their vessels to strategic ports from Qingdao down to Yantia. Making sure that these orders are filled and then getting the transport going is a second consideration. And still, these tariffs have been additive if we go back to Q1 of 2018, making products expensive.

So importers, large and small, are being much more selective in what they plan to order. But as you both know, we're cutting it really close. May is traditionally the month where orders go in for the all important holiday and Christmas seasons, and now we're on the doorstep of June. This is going to get quite interesting to see how we could play catch-up at prices that would be decent enough to consider what the consumer is willing to pay. Yeah, we've got not the graphics on screen. We've got a sort of a bigger graphic showing an increase in 20-foot containers.

Gene, it goes from 69,000 the week of May 25th to 96,000 to 106,000. So the numbers are going up. They're going, they appear to be trending in the correct direction, but yet, as I understand it, these are also lower than one year ago. Is that accurate? So while they're going up, we're still down from a year ago. That's right, Brian. Nowhere near where we should be heading into the first two weeks of June. We still have 10 canceled sailings of scheduled Bessel arrivals for June. half of those are in the first week starting next. So we're not seeing an uptick like some observers had called for a big surge, just a moderate uptick to kind of catch up from where we were.

Please remember that in May we had 17 vessel arrivals canceled. Most of those were the nonstop services out of China, the workhorse vessels that come direct here to L.A. Do you see it getting better? Like, do we have a window into like July and August, Gene? Because if the volumes don't pick up, then, And it appears the trade war is kind of still on, even if the tariffs are not still on. Yeah, I don't see any evidence right now. And again, for retailers and parts suppliers alike to start putting these orders in at more normalized levels, there's going to have to be some permanency

to the policy moving forward. And through an appellate process or using other tools on the tariff angle, as well as where we're going to go with these negotiated bilateral framework deals, A lot remains to be answered. Well, we're glad you're here to answer it and give us real world data on where things are going. Gene Saroka, executive director of the Port of Los Angeles, Gene. You're welcome back anytime. Thank you very much. And let's get to Kate Rooney in the meantime for a CNBC news update. Hi, Kate.

Hi, Kelly. A judge denied bail today for a crypto investor charged in the kidnapping and torture of an Italian tourist in New York City. Police say John Walts and another man lowered the victim into a townhouse in Manhattan in a bid to get his Bitcoin wallet password and then tortured him for 17 days when he refused to hand that over. Wolts has been indicted and is scheduled to be arraigned on June 11th. Meanwhile, British police charged a 53-year-old man for driving a minivan into a crowd of people in England, celebrating Liverpool FC's Premier League Championship on Monday. Nearly 80 people were reported injured. is now charged with dangerous driving and causing grievous bodily harm with intent, among other offenses, but he is due to appear in court tomorrow.

And finally, the star-studded Broadway season is now the highest grossing season on record, bringing in nearly $1.9 billion. That's slightly above the previous record-holding season back in 2018 to 2019, which grossed 1.83 billion stars, including George Clooney, Denzel Washington, Jake Gyllenhaal, and Sadie Sank have all scored big. roles in various productions this season. Kelly, back over to you. So glad to hear. Glad it hasn't gone the way of the movies, which I know we're having a bigger struggle to make a comeback. Kate, Kate Rooney. United Airlines is returning to New York's JFK Airport for the first time in years.

With a little assist from arrival, we'll get the full details next. CryptoWatch is sponsored by Crypto.com. Crypto.com is America's premier crypto platform. Welcome back. We have a news alert on Silicon maker synopsis. The company suspending its guidance just a day after providing it. The stock is off the session lows. Christina Parts and Avelas is back

with more. Christina. That's right, Kelly. So synopsis, you mentioned it just suspended quarterly and full year guidance after receiving this letter from the Commerce Department about new export restrictions to China. But the timing is telling. Just yesterday on their earnings call, executives said they expected lower China revenues

but claimed they hadn't received any official notice about export controls. Today, that changed. And that's why you're seeing the stock dip about almost 2% right now. But this really hits close to home for synopsis, since China represents about 14% of their revenue. And the company told me that just yesterday. The company, much like Cadence, makes the essential software that designs advanced chips, basically the blueprint tools that chipmakers can't do without. The U.S. government is clearly escalating its efforts to kneecap China's AI ambitions. We've already seen licensing

required slam NVIDIA, what, $10.5 billion in law sales just in the first. half of the year, and AMD's advanced AI chip exports all to China. But today's move targeting design software shows Washington realizes that just blocking Finnish chips isn't enough. The real concern is that China's homegrown players like Huawei keep making progress with their own advanced chips despite the restrictions. And so that's why you're having the chip and hardware world caught in the middle of this geopolitical dialogue between both countries.

Can we talk very quickly about it's a heck of a story? Let's talk very quickly about Invidia. I mean, Nvidia is not soaring, but the stock is higher. The numbers last night. I know Jensen Wong has expressed some concerns. He talked about it with Jim last night on Mad. But overall, Nvidia is having a pretty good day. I think on most days, Christina, this would have been our top story.

Yes, and that's because Nvidia's having a good day because they were able to show that even with the China export restrictions, which really did, they wrote off about $4.5 billion in Q1 for inventory losses. They lost $2.5 billion in sales in Q1. They were going to lose $8 billion in sales in Q2. Despite all of that, the company still said that they're selling Blackwell and ramping up at a record pace. It's about 70% of their data center sales. Blackwell is their latest iteration. So things are doing really good outside of China.

And so that's the positive that they're de-risking China right now. And that's why you're seeing the stock move a little bit higher, about 3%. Interesting stories, twofold, Nvidia, and synopsis, which did a heck of a U-turn. Christina, thank you very much. Thanks. All right, still ahead. A battle between tech billionaires why the AI race is reportedly now getting a little personal. Is there a battle royale already brewing in artificial intelligence?

We know the companies have been competing with each other, but now there's some new reporting that it might be getting even more personal. Okay. I'm doing. Brian, based on what I'm hearing, things do appear to be getting even more tense between Elon Musk and Sam Altman. A source familiar with matter tells me Elon Musk did try to derail OpenAI and Sam Allman's recent AI infrastructure deal in the Middle East. This was, if you remember last week, the UAE Stargate deal, which included SoftBank as well, Cisco, Nvidia, Oracle, and the Emirati firm G42. It did not include Elon Musk's OpenAI competitor XAI. I am told that was a problem for Musk.

Also, he's, of course, an advisor to the president or has been. I'm told by this person who was there in the region at the time that Musk intervened in an effort to get his company involved. Musk erred some frustration, I'm told, that his rival, Sam Altman and OpenAI were the ones being tapped for this. The person I talked to said the deal was ready to be announced. They had to postpone that as G42 and the Emirates, as well as the White House, did deal with some blowback from Musk. The Wall Street Journal was first to report some of these details. It does underline the growing animosity between these former co-founders of Open Eye.

Altman has said in interviews that they were friends at one point, but now it is one of the biggest rivalries in business and in tech. Musk has sued Open AI for its conversion to a full for-profit. He's tried to buy the startup, criticized Altman repeatedly on social media in the end. Musk did not get a slice of this deal in Abu Dhabi. It does come as Musk steps back from his role at the White House, no comment from Musk or Open AI in this guys. It also comes, Kate, as he's apparently ending his time at the White House.

Musk is. Yep. Absolutely, Kelly. And so it's hard to draw conclusions if those are related. So I think potentially a coincidence that his time of Doge ran out. But it also calls into question, you know, if he was lobbying for influence here, if he had that in this case, you know, this is obviously a win for Sam Alman that he was on the global stage as going back to even January when they first announced Stargate. Right. I'm told this really does come down to personal grievances. It's, you know, there's competition on the business. I, of course, you want your company to be involved. This particular case, the source I spoke to, who said this was much more about Elon Musk not wanting to be Sam Holtman.

It was a little bit of a zero-sum situation. No, it's amazing for all of Musk's influence on the president that Trump seems to have no problem kind of handing these wins to his personal rival. Kate, thanks very much. We appreciate it, Kate Rooney. And if you've missed any episodes of Power Lunch, remember you can always catch our podcast on any platform you listen to. Just look for Power Lunch. Follow us, and you'll never miss a thing. We're back right after this. Welcome back.

You know, I think Alta reported today, but rival elf has stolen the spotlight because the shares are up 25% after they spent a billion dollars to acquire Haley Bieber's company. It's called Road. And this, of course, now here's Brian, let's back up for a second, why this is so interesting. And you know about this, how these acquisitions of influencers, you know, the Kardashians and so forth, big money is being made. The market reaction tells you, and the analyst notes are like wildly positive. about this move. So what happened? Was founded in 2022. Okay, guys. Like two years ago?

Literally like two years ago. And it's profitable. It generated over $200 million in net sales for the year ended March 31. It's got sort of like a fresh kind of blush thing. I was just looking at the website. They have the phone case you mentioned with the lip gloss. I mean, it's not, we're not reinventing the wheel here. The price point is actually a little higher than the elf price point.

People like that too. Elf Beauty CEO, Tehran. Amen will be on Mad Money with Jim tonight at 6. $212 million in net sales is not profit. So they're believers. They're big believers. Incredible, though. Can you imagine now, and she's not the CEO, the CEO has to scale this company in a matter of a couple of years to a $200 million sales run rate?

Do you know how many enterprise SaaS companies are trying to do that in Silicon Valley? What's the profit, though? Well, if we'll find out. I'll see you on Wednesday. I'll be in Alaska. I cannot wait for all of that. It's going to be great. Thanks for watching.

Closing the bell starts now.