Power Lunch - S&P 500 turns positive for 2025 5/13/25

Episode Date: May 13, 2025

The S&P 500 rose Tuesday, clawing back into positive territory for the year, as investors extended the gains seen in the previous session due to easing U.S.-China trade tensions. We’ll cover all of the 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.

Don't tell anybody, but the stock market is now higher for the year. Welcome to Power Lunch. I'm Brian, along with Kelly Evans. Stocks rising again as President Trump says we will get much closer with Saudi Arabia. And InVita will sell its newest and best chips to that nation. That news plus a better than expected headline inflation rating, sending the NASDAQ and the S&P, like Brian just said, higher on the year. You can see the gains today, the NASDAQ, up 1.6%. All right. We've got a lot to do.

Let's start with your money. some new data on how much your money might be worth right now, because the latest inflation data is out, and it doesn't look that bad. Yes, consumer prices, what you pay continue to rise, but actually coming in slightly below expectations. And with the tariffs starting to fade into the back burner, at least for now, should the Federal Reserve actually start cutting rates or is holding steady the right move? Joining us now on set, bleakly, financial group CIO Peter Bookbar, also a CNBC contributor. Is Jay Powell behind the curve?

No, because he's as clueless as we are about how all this plays out. That's comforting. Well, just as Trump gave China 90 days, he essentially gave Powell 90 days. Because Powell will then wait to see how those discussions go. He'll wait to see how the reciprocal discussions go. And then he'll see, okay, what's the end game tariff rate? And then he can figure out how to move from here. So, but it's interesting what you said in a way every time the president does this thing with the 90-day reprieve, that makes the Fed less likely to cut rates because they're going to say, well, we have to wait and see what happens after 90 days.

I think that's the case. And just as the first 100 basis points of cuts, I felt was more of a rate-tweeking cycle rather than, okay, let's rate cut in response to some external problem. I think this time around, even if he cuts a few times, it's going to be more of the same, more further tweaking of rate cuts. By the way, the president himself, while he's in Saudi Arabia, just gave that speech we all saw this morning, has now posted on truth social about this very thing. He says no inflation in the prices of gasoline, energy, and groceries and practically everything else are down. The Fed must lower the rate like Europe and China have done. What is wrong with too late Powell? Not fair to America, which is ready to blossom. Just let it all happen.

Peter, it will be a beautiful thing. Well, the one thing we saw from the first 100 basis points of cuts was higher long-term interest rates. And how we have the 10-year yield kissing, and a half. And okay, let's just say Jay does cut a couple more times. Who's to say the 10 year doesn't go to five? And what do you want? Do you want a three and a half two year and a five percent 10 year or you want a four percent two year and a four and a half percent tenure? Sounds like you're saying that the bond market is going to do what it wants. Because you just said that if we cut again, that rates may not come down, they may go up.

because here's the dirty little secret. And the three of us can just talk about it. Nobody else has to hear this, wink, wink, which is, if somebody wants to buy a home, that mortgage is probably based on the 10 or 30-year government bond. Those are the rates they care about. They don't care what the Fed does if those interest rates go up. Yeah. If I had a dollar for every person in commercial real estate and those looking to buy a home

last summer saying the Fed rate cuts are going to save me and low, lower rates across the curve and everything's going to be fine, I'd be rich. You could buy a house. A lot of commercial real estate people actually get their loans priced off the five-year. Some SOFA plus where maybe they got some help. To your point, Brian, the residential buyers off the 10-year, but a lot of commercial real estate people are in the five-year where a Fed rate cut may not be enough to help. And that all goes back.

Do you think, Peter, the deficit is a big part of the story? because some of us have been pounding the table on this ad nauseum. And others suggest, no, it's all about real rates. This is all because we're going to experience an investment boom in the U.S. or there's many other factors that could be pushing long-term rates higher for perhaps better reason. So why is it that we're at four and a half percent on the 10-year? Why are we at almost five on the long end? I think one of the factors could be those, but it can be a bunch of them.

And one of them, to me, is foreigners are rethinking their position in U.S. assets. Are they, though? Did the data show that? I think it's happening on the margin. What I'm looking forward to, at least on the stock side, or the 13Ds and Fs that are coming out soon, because as of December 31st, before all this happened, and MAG 7 was, we're at the highs, I personally think the MAG 7 trade is over in terms of its dominance. Foreigners are going to show less holdings of these stocks. And that, after certainly April 2nd, caused, I think, a further rethink of, wait, I got. got way over my skis in U.S. assets, whether it was treasuries, stocks, corporate bonds, and it's time to lighten up. I want to back it up a little bit. What happened? Because April 2nd, Trump comes

out, the tariffs are bigger than people thought. The market gets destroyed. The next few days, we fell 2,000 points, 3,000 points in general. General news, not even financial news, but like other channels, they're leading with market segments. We're all people are, Kelly's on the today's show, were being talked to, and then two weeks ago, the market rockets higher and we're now higher for the year. There's a Ray Bradbury book called All Summer in a Day. It's a short story about living on Mars and it rains every day, but one in five years. It feels like that's the market. We just had a year's worth of stock market in 30 days. Basically, never mind to what all the tariff announcements took place. But I think we have to understand at the end of the day, let's just say

the bottom line tariff rate is 10%. On top of what it was two and a half going in, so we're talking about a 12 and a half to 13% tariff rate. Adding a 10% tariff rate on $3.3 trillion of imports is the equivalent of $330 billion tax increase on companies. Considering that U.S. corporations pay about a $525 billion corporate tax rate bill, I've done the back in the envelope unsophisticated math that we're essentially raising the corporate income tax rate. from 21% to 34%, basically taking away the 2017 Trump tax cut. So the market is believing that, okay, we're just going back to the way it was going into the year and everything is fine, but the math and the numbers say, you know what, the world is different. The tax rates are different.

The view of foreign holdings, as I said earlier, that's different. I think the Mag 7 trade is over, again, in terms of its dominance. That's not to say the market doesn't do okay. It's just there are other things that are going to work. But the world has changed, but the market right now, at least is acting like, no, it hasn't. And you're going international. I mean, you've often had that kind of, you know, that bias looking for things that have good value maybe in other areas. But plenty would say, but this is where the capital, you know, you can compound and get the best returns over time.

That has worked for a while. And maybe it continues to. But if you look at the U.S. market cap as a percent of global market cap, it got. almost 65% at the peak. That's at least a 50-year high. So my belief is that the U.S. will still be a great place to invest in a dominant economy of the world, but if it's just a bit less so, that provides a lot of opportunities in international markets. The Dax is at a record high. It's up 18% year-to-date. The Hank Sang Index is even up double digits this year. So I think what we're seeing is the world has figured out that there must be a lot of

more stocks to buy other than the top 10 in the S&P. Have they? Because guess what's been rocketing higher the last two weeks? Right. But if you look at year-to-date numbers. Indyna, Apple, Amazon. It's like, to your point, never mind. I'm sort of semi-agreeing with you, Peter, where it's like, well, we sell off all these

stocks for two years. All we did was talk about the same seven or ten stocks. Then we forgot about them for two weeks because the tariffs. Now they're back. No AI capital spending has been cut. None. Not any. Zero.

It's zero. We haven't heard one company come out and say, oh, I'm dramatically pulling back on my capital spending, right? Okay, so the- Feels like we're back to mid-March or something. I don't know. The MAG's ETF is still down 7% year-to-date and about 11% from its peak. As I mentioned, the DAX is up 18%. And so there is a shift in what is outperforming, what is not. And I really believe in people I speak to and everything that I read about, foreigners are rethinking. their very over-the-skis allocations to U.S. equities, corporate bonds, CLOs, treasuries, everything,

because they got way too extended. Now, I'm not saying that that's necessarily going to be the only factor here in driving U.S. stocks, but on the margin it's going to be. That's interesting. Peter Bookbar, Bleakley Financial Group. Peter, we appreciate you coming on. Thank you, as always. Thank you, Kelly. Good to see you. Let's get a check on those bond yields now. as we mentioned, yields are rising after that cooler than expected inflation reading, wait, does that make any sense? The U.S. 10-year yield touching 4.5% its highest level in a month. The CPI headline was 2.3% from a year ago.

That was the slowest annual rate since early 2021. And yet you can see we're drifting higher on the 10-year, drifting higher on the 30-year, whether that's deficit, better growth prospects. You tell me. But that's the landscape this afternoon. All right, on deck why President Trump is making a big push across the Middle East, and what it may mean to you and your money. Welcome back. President Trump securing a $600 billion Saudi investment pledge during his tour of the Gulf,

lots of big companies and money at play. Sarah Eisen was at the Saudi U.S. Investment Forum and she has more. Sarah, we've been looking forward to hearing from you. What a wild day, so many different headlines and things to talk about. Well, because much of the S&P 500 was at this event here in Riyadh, and I'm talking about CEOs. Look, President Trump, Kelly's first official visit of this presidency, just like the last presidency, it was here in Saudi Arabia. And today it was all about deals and business. So the kingdom hosted a Saudi U.S. Investment Forum, which was basically dialogues from government, ministers,

and cabinet secretaries, both countries and CEOs talking about economic collaboration. I moderated a panel on AI. That was a huge discussion point because Saudi Arabia has pretty big ambitions of becoming a global AI hub, and many of the U.S. tech companies are very much on board. Alex Karp was there, the CEO of Palantir, Qualcomm CEO, Google's Ruth Porat, IBM's Arvin Krishna, all announcing deals today, also present at the event. Sam Altman of OpenAI, Elon Musk, Andy Jassy of Amazon, and of course it went beyond tech. We saw as finance chiefs like Larry Fink from BlackRock and Jane Fulck. Frazier from Citigroup, Uber CEO, Boeing CEO. They were all there to support the president on this business trip, but also to invest in

the kingdom. So much bullishness there. At the end of the day, it was announced on the Saudi side that 45 different companies signed deals or memorandum of understandings to invest in Saudi Arabia totaling $300 billion. Examples on the way out of the conference. Just now, I ran into Lisa Sue, the CEO of AMD. She was telling me about a $10 billion deal. She just signed with Humane, which is a brand new, just announced this week, Saudi National AI Company.

NVIDIA signed a similar deal, 18,000 chips that's going to provide. And its most advanced new Blackwell chips to Saudi's new AI company. Jensen Wong on the stage with props, full of excitement. Take a look. It weighs too much to pick up. But this is too blackwell. and it's 2,500 watts, 2,500 out of the 500 gigawatts of computing infrastructure that's going to be built. The highlight of the day was an address by President Trump, a long address, after meeting and the state lunch with Muhammad bin Salman, the Crown Prince.

He also touted the two-way deals, investments going into the U.S. and investments going into Saudi. Listen. In addition to purchases of $142 billion of American made military equipment by our great Saudi partners, the largest ever. This week, there are multi-billion dollar commercial deals with Amazon, Oracle, AMD. They're all here. Uber, Qualcomm, Johnson, and Johnson, and many, many more. That defense deal, the arms deal that he announced, $142 billion, that's part of the overall. $600 billion that you mentioned, Kelly, that had been pledged by the kingdom upon President Trump's first election, but now was really formalized here. Both he and the Crown Prince signed an economic agreement on that. Right now, I'm told that the President is dining again

with the Crown Prince, but tonight a much smaller group of CEOs than the state lunch, where they had so many American CEOs. It really was amazing to see them here. Lots of bullishness. of tariffs, no talk, Brian, of oil and sort of the strain that that puts Saudi under on the weaker price of oil. It was all about the economic opportunities today. What else should we expect, Sarah? As you mentioned, there's kind of a smaller event now, and do you think we've gotten the big headlines from here, or do you think things will still trickle out in the weeks, maybe even months to come? Well, as far as Saudi, so the president is going from here to Qatar and then the UAE.

So the idea of deal-making and investment is going to continue to be a theme because all of these countries have a lot of money and they invest it in the United States. And vice versa. There's been a lot of corporate enthusiasm from American companies into these markets. I've already heard that some of the CEOs will go on to some of these other places. They've been invited to things like state dinners. As far as Riyadh, though, the news on business was today. Tomorrow, there's continuing discussions, but it's more diplomatic talks where events on the, or issues on the agenda will be more on potential Iran nuclear discussions, for instance, which the president did talk about in the speech today. There was definitely a national security sort of preview ahead of tomorrow's talks where he called on Saudi Arabia to join the Abraham Accords, touted the Abraham Accords, and made a number of other sort of strategic priorities. but no question, theme of the day was deals for the dealmaker in chief.

Yeah, Sarah, and by the way, all the stocks that you just mentioned, Palantir, Amazon, Nvidia, AMD, everything you just referenced, all the CEOs you just talked about, all those stocks are higher up today, and they're up more than the market. Sarah Eisen in Riyadh, Saudi Arabia, know it's late, it's been a long day, Sarah. Thank you very much. All right, so let's kind of stay in the region and tie all that together. with us, Halima Croft, Global Head of Commodity Strategy at RBC Capital Markets, who I believe probably just got back from Riyadh.

I know you were in Dubai. You were in Riyadh. This is not an, it wasn't, today, wasn't about energy necessarily. I get it maybe AI energy, not oil and gas. But there is no mistake, I think, Halima, that the ties are clear. And the president promised lower oil and gas prices to the electorate, can the Saudis help us execute on that lower prices, but also not spark some any kind of a price or market share war. Well, you know, Brian, you bring this up and OPEC officials have said that the decision to

bring forward more barrels had nothing to do with pressure from Washington, but at a minimum, those decisions have created a beneficial enabling environment for the deals that were announced today. And there were some energy deals announced. Aramco will be investing in U.S. refinery, They are investing in U.S. LNG facilities in the United States. So there is a Saudi energy investment angle. And I do think for President Trump, he did speak about the benefits of lower gasoline prices. But the Saudis are getting so much of what they wanted from the United States commercially with the announcements today, particularly around defense, $142 billion deal.

Also, the AI buildout is such a huge priority for Crown Prince Mohammed bin Salman. They really wanted those Navidia chips. So that announcement today, the rolling back of the AI diffusion rules, like all of that is giving Saudi Arabia a lot of what they want when they think about future-proofing their country. Yeah, it's not getting much attention, but the ending of these sanctions on Syria, I think might give Germany the ability to do something with Syria, which you'll see that's not for this segment. Let's go back to energy because the one thing the president did do is he slammed Iran. And he basically said, you're building all his beautiful new buildings in Saudi Arabia.

And the UAE and look at Iran. I think he called them 1979 buildings referring to the revolution. You know, they're collapsing. What's Trump's view going to be on Iran? Because if we take a million and a half barrels a day off the market, somebody's going to have to fill that gap. 100%. And what's interesting about this Trump administration versus the Trump first administration

is he is in dealmaker mode when it comes to Iran as well. He's basically saying to the Iranians, like, forego ever having a nuclear weapon, and we will make you rich as well. And the Iranians have signaled a willingness to essentially go back to at least JCPOA 2.0, essentially restrict the levels that they enrich uranium at, something compatible with a civilian program, submit to more intrusive inspections. The real question is, what is President Trump going to look for? Is he going to ask them to dismantle the entire program,

something that's being pushed by the Israeli government, people in Congress like Ted Cruz, Tom Cotton, or is they willing to say, you know what, if you go back to the basics of the 2015 deal, submit to some more enhanced monitoring, okay, good enough, sanctions removed. So we really have to wait and see what happens. President Trump today, though, did not talk about bombing Iran if they don't come to the table. He did talk about taking their exports to zero. Halima, just to go back to the Saudis for a second, you know, as much as we welcome 600 billion

or maybe even a trillion dollars, we'll see. And they've benefited our sports leagues and all sorts of tech. investments and so on and so forth, where is the money going to keep coming from, right? Like if they need $90 oil to balance the budget and the debt is already growing, maybe there's an issue there, maybe not, I'm just not that familiar with their finances. So, Kelly, this is such a great question because when I spoke to you last, I was in Dubai, and I was at the IMF Regional Economic Outlook Summit. And what was so interesting was they really bifurcated the Middle East, that you have these

countries in the Gulf. You have Saudi Arabia, U.A.E., Qatar, that have really pushed forward with economic reforms, especially Saudi Arabia, in terms of prioritizing non-oil growth. They've also shown a willingness to borrow in ways that they were not previously comfortable with. So, you know, the Saudis, certainly, this is not the best oil price environment for all of these new deals, but they have the capacity to weather this environment for now. And so, again, I don't think they're under the same type of fiscal pressure that they would have been under a previous government because they have done more when it comes economic reform.

they have been more willing to borrow. Yeah, and we'll let you go, Halima, but I want to, Helima Croft, RBC Capital Markets, thank you very much. Before we go to the T's guys, can we throw up GEV, this is GEVernoba, and all this stuff kind of happening, Kelly, real time, this thing just wrapped in Saudi Arabia.

Gevernova also is going to be selling billions to Saudi Arabia. So you got a stock that's up 6% today. That is a new record high for GEV. Which has already been such a judgment. Really, yeah, this Trump thing, this U.S.-S.-Saudi investment form in Riyadh, the companies that are there are all up today more than the market. It's the point I made with Sarah, Palantir, GE, Vernova, AMD, they're all spiking. If you would have kind of recognized they were on the speaker list, which, by the way, is public. Right.

And just, if you were a hedge fund, just bought that. And yet, I don't think. Go to Sizzler tonight because you just printed money. It's a great point. But the question is, is that because they're. getting, they're able to kind of sit there on those front row, make deals, you know, do get better, get more business and all this done? I mean, is this a one-off or do you think this is the way things could happen now over the next four years? It's unknown. I can't answer

that. But I'm sure many of our viewers and listeners have saw or listened to the musical Hamilton, right? And there's a part where they say the room where it happened. I was in the room where it happened. There is a part to this. We're at the Milken Conference last week. You've got the Saudi form. You've got all these things like Davos. These are people that are going for a reason. Not us going to watch the president speak. They're in Riyadh. If you've flown on your G650 from the, I had one, from the U.S. to Riyadh, like Alex Karp, whatever,

you're going for a reason. You're going to sell products or make the connections to people that would buy those products. And all those stocks, and I think this is probably the biggest story for CNBC, all those stocks are soaring today. And going back, I'm just impressed that they have the capability, the wear with all the Saudis and others do to continue to make these major investments across all of corporate America, let alone across the U.S. They've got a little money. Yeah, evidently, no matter what the oil price is.

And we think of Saudi Arabia as an oil nation, and it is obviously the world's second biggest producer of oil, but they're getting huge into wind. They're getting huge into solar. They're getting huge, as Sarah said, into AI. They're building Neum, this futuristic city, building this new F-F Formula One track in Riat. in the long run. We shall see. Indeed. All right, coming up with Invidia, the aforementioned back into the $3 trillion society, he said, is that the all-clear for big tech or have valuations gotten out of a hand, maybe again? Market Navigator.

CryptoWatch is sponsored by Crypto.com. Crypto.com is America's premier crypto platform. Welcome back to Power Lunch as we watch the NASDAQ up 1.7. percent today. The S&P positive on the year, but the Dow down 185 points weighed down sharply by a big decline in United Health Care today. That brings us to market navigator. Dom, welcome. How about some of that NASDAQ outperformance and why it's up one and three quarters percent? So tech stocks are rebounding, of course, from the recent lows. And while a reprieve from tariffs may be helping in that whole entire arena, our next guest says that we're not out of the woods just yet

and that the volatility is not going away anytime soon. But he has a lot of his eye on one stock in particular, which he says is a defensive play in technology, and he's here to tell us all about it. So joining us now for our market navigator is Matt Powers, managing partner over at Powers Advisory Group. So Matt, this tech trade, everyone wants to know about it, because it has been the best performing trade for the past 15 years post-great financial crisis. It was easy to buy and just set it and forget it. But you have to be more nuanced now. Why? And what stocks are you looking at? Yeah, thanks for having me on. And incorrect. You know, it's a tech jumped yesterday with the China trade deal, along with the communications and discretionary sectors.

I mean, that clearly happened. Obviously, all three sectors are top heavy with mag seven names at the top. You know, you get Microsoft Apple and Vida tech and Amazon Tesla discretionary. And then meta-google and communications, but, you know, these were also the worst performing sectors coming into yesterday year to date. So it just shows the true sensitivity to tariff related headlines. I mean, tariffs will settle. And like you mentioned, we're not out of the woods yet. And this type of volatility isn't going away anytime soon. But, you know, there's still a lot of uncertainty surrounding the effect of tariffs. And clearly, the market doesn't handle uncertainty well. We don't react to every headline. But investors need to continue to take some proactive

steps to strengthen their portfolio. Right now, we're looking to position defensively without excluding certain sectors. And what exactly is the defensive play when it comes to being exposed to that technology, media and telecom trade, but being more defensive about it. Yeah, you have to look at cybersecurity. I mean, it's a defensive play within the tech sector. There's a lot of players in the space. You've got Fortnite. You've got CrowdStrike.

But we think Palo Alto is the best of breed. It's the largest market cap in the subsector, and it's almost a consensus analyst buy. You know, earnings are out next week. They're not necessarily inexpensive, so valuation's not great. They trade it 60 times forward, which is just. quite a bit above their five-year average, but we see the reason the valuations high is clearly because of the expected growth. But what we like here, so software spending should keep growing, even with all the uncertainty about the economy. So software companies that can handle a slowdown

or what we like in this environment, and there's definitely a strong theme here. Regardless of what the economy is doing, companies can't afford to not spend money on cybersecurity. I mean, there's strong tailwinds now and should continue from increased cyber attacks and ransomware and the hybrid cloud work environment we're in. So, you know, Palo Alto is in a great spot to earn market share. They offer a free trial of their suite of products and they're converting those to paid subscriptions at a pretty nice rate, which doubled from a year ago. And more importantly, they sell on a subscription basis, not a consumption basis. Consumption means you're paying more is you use more and less when demand is down. So the subscription basis provides just a higher quality

revenue stream and puts them in a great position to stay fairly insulated. Sales growth should create some profit growth, which should lift the shares. But most importantly, they really can't truly be tariffed. And we just, I mean, we look at it as a long-term core holding to any portfolio in a growing subsector that's beaten down. And we just think that high valuation reflects investors' confidence in its growth trajectory and in positioning at the center of the cybersecurity industry. All right. The defensive play in technology, Kelly. 60 times forward. I know. I'm just saying it could be they're playing defense, though. Just look at AI, though, completely different.

Matt Powers, a Powers advisory. Thanks very much, sir. We'll see you soon. Appreciate it. Brian, over to you. All right, guys. Thank you very much. Coming up, one of the weirdest stories ever in corporate America.

What is really going on at Dow Component and Mathive Health Company, United Health? We'll dig in next. We've got a news alert from Washington, D.C. Ways and Means Chair Jason Smith speaking with reporters moments ago about the proposed tax bill. Emily Wilkins on Capitol Hill with more, Emily. Hey, Brian, well, we are right outside the room now where lawmakers are going to be taking the first steps to start moving one of the biggest tax packages

in almost a decade. It's going to be a signature piece of legislation of Donald Trump's if, of course, they can get it across the line. And this bill that was released in full just yesterday is already facing problems, namely that salt cap, the state and local deduction. It is increased in this bill up to 30. $20,000 for those making either $200,000 if you're single or $400,000 if you're married.

But a number of Republicans from these high-tax states, New York, New Jersey, California, saying that does not go far enough. And I asked Chairman Smith just moments ago what his response would be to that. He says that it is now in Speaker Mike Johnson's court, that he is the one who is going to be negotiating with these lawmakers to try to find a way to get to yes. But he reminded us what was on the line here, that if Congress, cannot pass a tax bill re-upping what they passed in 2017. Many Americans are going to be seeing a hike in their taxes,

a tax increase, and Republicans want to prevent that. Smith also said that he sat down with Trump on Friday, went through the bill line with line and said that Trump is very happy with it, even though it doesn't include things like that new higher tax bracket, top tax bracket on highest earners and a few other things that Trump was looking for. Most things Trump asked for, though, are in this package Of course, we're expecting this markup behind me to go long into tonight, into tomorrow morning, with the committee having a final vote, perhaps early Wednesday. And then we're going to see what happens with this bill once it hits the House floor.

And then, of course, the Senate will want to have their say. So still a very long way to go. But this is kind of truly the first kickoff moment for this bill to go through the process and to really begin that push to try and get to the president's desk. A lot of strong emotions and spicy language about assault from those members who are opposed to. that cap being solo. Emily, thanks, Emily Wilkins. You say it's salty language? I went with spicy. I thought salty might be too obvious. You missed the dad joke opportunity because you made a mom joke, which is better. It's more subtle. More subtle. Yeah. 90 minutes, not quite 90 minutes left in the trading day. Let's get you caught up on some of the key movers, starting with the Dow

overall, which is lower by 196 points, but 400 of that is from UNH. The better than expected CPI not enough to bring it positive, and is the outlier with the S&P. and the NASDAQ in the green today. And that brings us, Brian, to that big drop in shares of United Health. Yeah, despite the Dow being down, because you'll see the Dow is down, I want to be clear. It's one company impacted the index. The Dow would be up, I think, Kelly, 200 points if it wasn't for United Health. United Health investors are crushed again.

The stock is down 17 percent today. I want to put this in context. I know you guys talked about it in the 1 o'clock show. one of America's largest healthcare companies has now lost basically half its value in a month. The company pulled its guidance, the CEO shocking everybody saying he's quitting today, by the way, after making $23 million last year. And of course, this all comes six months after one of its divisional CEOs was murdered on the streets of Manhattan. This is a Dow component.

I'm not sure, Kelly, in doing this for almost 30 years, I've ever seen a story as maybe bizarre as this one. No, because bizarre is the right word. Also, this is somewhat reminiscent for me of Boeing, but those events were much more clear. You had a couple of plane crashes in the late 2010s. In this case, obviously, you had the tragic killing of the CEO. Subsequent to that, you've had a lot of company-specific issues.

For instance, what was going on in the first quarter vis-a-vis competition. It's kind of nitty-gritty. Now you have this issue where there's all this political pressure piling on top of it. To see a name like this, you know, a six, 100 billion market cap type, named down almost 50% in like four or five months time, extremely, extremely unusual. Jeff Kilberg, by the way, a lot of people out there, Stephanie Link all think this presents an entry point.

But this sheer narrative of what's going on here is wild. And I want to be clear, I may be wrong in this because I'm not the health care specialist I know you're at birth on, but there's not been anything I've seen or legislation passed that would fundamentally change their pricing structure. Has there been? There are a couple of issues at the margin. So these potential changes to pharmacy benefit managers, okay, that could hit them. That just happened yesterday.

Well, or kind of the idea that something might be in the works, kind of longer term. But the other ones haven't fallen. Well, because this goes back to the first quarter. So their quarter was worse than expected because they paid out more than expected for people's procedures. So are they overpaying and now they're underpaying? And that goes back to the suggestions from Bill Ackman, who of course, the prominent hedge fund investor, who suggested that they've been kind of overbooking profits by underdoing, treatments. And so whether or not that's true, all of these questions swirling around the core

business model come at a tough time. Yeah, and then a lot of speculate, I would say this. Facts, the CEO who made $23 million last year, according to facts set, CEO stepped down today unexpectedly, out of the blue. CEOs don't normally just quit. Yeah, exactly. Like that, I'm out. That's why investors are nervous. Yeah. And that's why the shares are down 17%. All right, Let's get over to Christina Partsenevilus for a CNBC news update. Thank you, Brian. Let's start with the U.S. imposing sanctions today on a shipping network that claims has sent millions of barrels of Iranian oil to China. The State Department says the oil sales funded Iranian weapons and attacks by the Houthi military group on shipping in the Red Sea, the U.S. Navy, as well as Israel.

The sanctions come after a fourth round of nuclear talks with Tehran. A federal judge took New York City's infamous Rikers. Island Jail out of city control today. The judge ordered an outside official be appointed to oversee the jail and improve conditions amid complaints about violence, abuse, and inmate neglect. Rikers is legally mandated to close by August 2027. And the Portland Trailblazers announced today that the estate of Microsoft co-founder Paul Allen started the formal process to sell the NBA franchise. The team says the move is in line with a directive from Allen to sell his sports holdings and direct estate

proceeds to charities. CNBC Sport values the Blazers at $3.65 billion. Kelly. All right, Christina, thank you very much. The market's making a solid comeback from the April lows. Which names are leading the charge? Some you may have heard of. Others are a little more under the radar. We'll tell you about them next. All right, welcome back. Something a little bit random, but interesting that we think you need to know is that the names making a massive comeback over the past month, maybe up a lot more than you even think. Case in point, NRG, which made a big deal yesterday, up more than 60%. These are one month gains, by the way, okay? One month gains. NRG, 65%. Microchip tech, 61%. First solar, 48%. Segey, 49%. Charles River Labs, 45%. A lot more where this came

from, Tapestry, Bistra, Micon, Ralph Lauren, or Lauren, Lauren. Pallet, I can't afford it, so I don't know what they, what's called, Palantir, all up more than 30%. Kelly, these are in one month. Yeah, no huge gains. And it's frustrating. A lot of people go, now I wish I had gotten in and been more aggressive at the lows. But you think to yourself, well, you can't possibly come back as quickly as we just did. And we just did.

Well, this mystery chart, by the way, is up more than 20% today and nearly 50% in a month. It's not the ones we just mentioned. That's why it's a mystery chart. If we mentioned it, it wouldn't be a mystery. We're going to be back with that and you meddling kids next. Welcome back. Now it's time for three-stock lunch. We're hitting some of the biggest movers today and asking our trader whether investors should be buying or selling the moves. Here to discuss is David Wagner.

He's portfolio manager and head of equities at Aptus Capital Advisors. Good to see you, David. Let's start with that mystery chart. The big reveal. It was Coinbase. The shares are up 24 percent today on news. It'll join the S&P 500. Monday. What's your take on the shares? Yeah, well, Kelly, I'd say don't call to comeback here.

I mean, just in the span of a few months, the stock went from being intensely litigated by the SEC to be in the latest addition to the S&B 500. I would say, Kelly, that this stock, it's not for everyone, but how can you, you know, ignore this monumental shift in appetite, not only in D.C., but across the institutional spectrum. I mean, you even have Warren Buffett mentioning this tectonic shift just a few weeks ago in Omaha. Then the company has, you know, a 60% market share here in the U.S., which positions them perfectly, you know, for the institutionalization of crypto, which is going to lead to, you know, higher trading revenue. So I understand that crypto, it's a very, very touchy subject. But this is probably, Kelly, one of the most simplistic ways to own this narrative without really, you know, owning the underlying narrative.

All right. All right. Next up we have first solar. We mentioned earlier in the RBI. The stock soaring almost 50% in the past, like, week plus alone. the best performing name in the S&P 500 today. It's up nearly 20%. Follows an upgrade from analysts at Wolf Research.

But let's be clear, it's got to be a lot of short covering. David, there's no way the stock's up 19% on an upgrade. Yeah, it does have a short interest of 11%, Sally. But simply said, if you can't get comfortable with, you know, renewables right now with what we've learned yesterday regarding the IRA policy under President Donald Trump, that he probably can't ever get comfortable with owning these types of renewable names. because it was much better than fear for First Solar. Because, you know, for me with what came out yesterday, it feels like this could be, you know,

peak pessimism in the stock train at 10 times earnings, which could create a floor for the stock as policy is probably not going to be any more punitive from a tax credit perspective. So I do like the name. But when you look at First Solar from a Solar Panel Company, pardon me, you know, they're the only one that fully manufactures here in the United States. So that definitely plays into, you know, one of the main thematics of. the current markets. Plus, I believe they have the opportunity to raise prices right now. So if you're not optimistic about this space right now, Selling, I'm just not sure when you will be.

Didn't they just have that big earnings miss a couple of weeks ago, was it? Yeah, they did. And that definitely played into, you know, why short interest was where it was, but also why the stock is traded at 10 times forward earnings. Wow. All right. Let's move along then. Last one, Invidia, on pace to close above the $3 trillion mark again, first time since February. Shares are up 6% today on news that they'll sell 18,000. of those blackwell chips to Saudi Arabian company, Humane, as what Brian was highlighting earlier. David, what's your take on NVIDIA, which I think is up, I mean, at least 30, no, probably 40% from the lows when it was in the 80s just recently. Yeah, Kelly, I don't just like NVIDIA. I love NVIDIA. I mean, I just don't know how you bet against Jensen and their technology right now.

Exactly to your point. The news out of Saudi Arabia today just continues to show the resiliency that the company has from a growth perspective, not just domestic. but also internationally. So in a rule of tariffs, you know, everyone's expecting growth to slow down specifically in the consumer areas of the market. But you're also going to see growth slowing down, you know, international. So I think that this leaves this AI trade as the idiosyncratic area of growth moving forward. So I would hope that the scarcity growth premium might finally find its way back to NVIDIA with the stock trading at 28 times forward earnings.

All right. David, thanks for joining us today. Appreciate it. David Wagner with aptest capital advisors. And remember, you can recap every three stock lunch any time you want. I mean, two in the morning, can't sleep, wake up, scan that QR code. We'll go to cnbc.com pro for more. We'll be right back.

All right, before we go, we want to re-flag the shares of the companies that really, the CEOs of the companies that were with President Trump in Riyadh for the Saudi U.S. investment forum. If you miss the top of the show, President Trump just wrapping up, all these CEOs were either there or there was some kind of an announcement involving their company. Invita, Palantir, AMD, Tesla, GE, Vernova. Kelly, those CEOs there, G. E. Renova are going to sell a bunch of stuff. Tesla, Musk, of course, was there. Palantir are going to do more security deals, I'm sure, with Saudi Arabia, and Vidaia gets to sell their latest and greatest chips. Yeah, I think Boeing was there as well.

Those shares are up 3%. And like you said, we're seeing some alpha from all of these names who are part of that visit and benefiting from the Halo effect. One other story we want to flag before we go. Check out this Wall Street Journal story that Apple is embracing new technology that would allow people to control iPhones

with their brain signals. Now, this could help those with limited hand use or other issues, people with ALS, whereas the example in the article. And I was wondering if this is sort of a rival to Neurrelink, of course, from Elon Musk, but it would actually use technologies like NeurLink and rivals

In this case, I think it was called Synchron, the partner they're dealing with, in order to help make this happen. Do we know what brain implant control means? Are they going to put something in there? It's like a stent, yes. The article explains it, but it's hard to read out. They're like, ugh, but it's very cool. The people using this technology are able to access experiences that they otherwise couldn't. To your point, especially people that have had these debilitating afflictions that were Neurrelink might help them participate in the Internet economy.

Crazy to think we still don't have flying cars, but this future has arrived, which is wild. It's fantastic. By the way, thank you for watching. Power Lunch, everybody. Yep. Closing bell starts right now.