Power Lunch - Stocks Rally Despite Iran War Continuing 3/4/26

Episode Date: March 4, 2026

Big Tech executives meet at the White House to sign a pledge to power their own data centers. Former Bridgewater Associates Chief Investment Strategist Rebecca Patterson joins the show with her market outlook.     And former energy advisor to President George W. Bush Bob McNally gives his take on the crude oil market.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Day five of the Iran War, but stocks and your money are coming back as the world looks for any hopeful sign. Welcome to Power Lunch, everybody. Energy front and center this week, oil and gas. They're calm right now, even as the U.S. Navy does something it is not done since World War II. We'll talk about that. And what's ahead for oil is the global markets all react. And will, by the way, the president's plan to protect shipping really work? We've got some great insight coming up.

I'm really looking forward to this. We also have some tech executives from Amazon, Google, Meta, Microsoft and Moore, meeting with President Trump this afternoon. The administration is pushing tech giants to make a formal pledge to shield consumers from rising electricity costs, a critical inflection point for the AI trade more broadly, as focus now shifts to how AI expansion will be financed, regulated, and powered. And that said, let's start today with the markets. The major averages are rallying on some stronger than expected economic data, while still wary

of oil prices as the U.S.-Iran war enters a fifth day. here to discuss is Rebecca Patterson, the former chief investment strategist at Bridgewater Associates. She's currently a senior fellow at the Council on Foreign Relations and now has a weekly podcast. I've seen this on global macro events called The Spillover. Welcome. How do you come up with names? You know what? We'll talk about that another time. What do you make, are markets too complacent about the Iran war right now? I think so. Yes. I think markets are somewhat complacent right now, only because the cone of outcomes is so large. I mean, the good news is the data this morning reminded us that the U.S. economy went into this on a solid footing, right? The service

sector is hiring. New orders are strong. That's great. The beige book, I'm guessing, is going to be pretty benign going into the crisis. All good. The problem is now that we're in it, does oil stay here around $80 a barrel? I'm talking about Brent crude. Does it spike? And that's an issue of time. And Brian, you've been doing this for a million years. You know this like I do. Once those storage facilities fill, if the ships can't take that oil out of storage and ship it, they're going to have to shut in production. And that's the risk moment for oil prices. And on our podcast, the spillover this week, we had Natasha Knava from J.P. Morgan. She runs their commodity research. Iraq shut in production yesterday. I mean, the rest of that region will shut in within a

couple weeks max. So the clock's ticking on both sides. Yeah. And something I wanted to show, you've probably seen it. Maybe some of our viewers have seen this. And it's a little bit disturbing. It's video from a U.S. submarine. And what I referenced, and we're going to show it to you now. And this is video, and again, folks, it's a little, you know, it's war. It is a U.S. submarine. That is an Iranian naval ship. And the U.S. submarine launches a torpedo and blows up the Iranian naval ship. And I'm assuming something very bad happened to those sailors on that ship. And we are at war, and I'm only showing this because, Rebecca, I feel like there's a part of this market. that is undervaluing that.

That's real war. That's ugly. That is dangerous. It's deadly. But that's what's happening. And the market is kind of acting like, oh, we've got a little dispute going on here. That's more than a dispute.

Yeah, my brother worked on nuclear submarines in the Navy for several years. So, yeah, I have a little bit of insight on this, not much, but I definitely appreciate it. Well, just shows what's happening. That's a real war. That's a first torpedo attack on a foreign ship since World War II. 1945. Yes. Yeah, I know I understand. And I think, look, for investors, I pray and hope that all of us understand that there is a huge human element to all of this. And in a way, you have to compartmentalize that. Because if you didn't, you wouldn't be able to do your job. I mean, frankly, it would be too upsetting. So I think there's that aspect of it. And this is a, no pun intended, deadly serious moment. We're in, from an economic point of view, you think about can the U.S. achieve its aims. in this war quickly before the storage issue makes oil prices go not from 80 to 100, but even higher than that. And you see that hit American consumers, American businesses.

How does this play out around the world? When you think, I was reflecting the other day, of all the financial assets in the world, oil is probably the single most important. Think about it. You can't drive your car. You can't get product from a company to a consumer. You can't run a business without energy. And it is a global market. So the U.S. might be a large net exporter today and a large global producer.

But if we can't get oil where it needs to go globally, the global economy stops. And it so much depends on the timeline and how quickly now we can prevent them from having to shut down production. The two announcements about that yesterday on the insurance piece of this and then also kind of the naval escort, how are you thinking through that? because investors still have a lot of questions about the actual implementation. I mean, look, Treasury knows that higher oil prices could hurt the administration and the party in the midterm. So they need to do everything they can to try to mitigate any potential rise in the price. So I'm not surprised at yesterday's news. I would not be surprised if the International Energy Agency, I believe that's the right body.

Correct me if I'm getting this one wrong, could come out with some strategic reserve release, similar to what we had in 2022 when Russia invaded Ukraine. We had about 120 million barrels put on the market on April 1st. Like a global SPR, effectively. Correct, a global SPR, global supply. And it is the IEA, and they talked about it. Thank you. It's a one-off, and it doesn't change the trend.

It's like one-off intervention from a central bank. The Treasury news, the question is, will ship say this is enough? And what we heard from Maersk today is it's not clear it's enough. They're saying we're pausing. We're not doing anything right now. Because even if you get the missiles and missile launchers done from Iran, we've got this lovely thing now called a drone. And they don't cost that much. And it's very easy to have a lot of them.

And they can do a lot of damage too. So again, my bottom line is there's just a big cone of uncertainty and it's really about time. Can we get our war aims quickly? Will Iran agree to peace in a new regime quickly? will we get it done before we have oil prices going parabolic? We're learning a lesson about the reality of the world because we've been so focused here in the United States because we're geographically isolated from so much of this stuff.

We're just blessed to be lucky with the geography that we have. Yes. We've been focused on AI, right? Is Gemini better than Anthropic? You know, now we're going to start focusing on can the world eat because it's not just oil, it's natural gas, it's fertilizers, it's aluminum, all the stuff, We don't think about water. Water.

Water facilities in the Middle East. Clean drinking water. Plenty of water. Not a lot of clean drinking water. And there were some reports out that Putin may be thinking about cutting back on liquefied natural gas sales. Because they know they can't beat us in a real war of the date that we just saw. Right. But they can do a lot of economic pain.

Yeah. I mean, Russia, there's a lot of cross currents on Russia right now from what's happening in Iran. But Russia is winning in a couple of ways. higher oil prices create more revenue for Russia that allows them to continue the war in Ukraine, and it takes the focus away from Ukraine. And that gives them a little more flexibility in some short-term period. And to your point, Brian, on liquefied natural gas, I mean, poor Europe, like, they can't catch a break. First, they're getting it too much, too over-dependence on Russia.

Now it's from Qatar, but Qatar has shut in its liquefied natural gas facilities because they were hit. And so Europe is seeing the same inflation shock, energy inflation shock that it did in 2022. How is that going to affect monetary policy? How is that can affect growth? Again, it all depends how long this lasts. And we don't know. And I think that risk premium, it is getting priced in more in Europe as it should. I was surprised that Europe was so resolved.

Brian and I both talked about this, but after that energy price shock, which was so bad and so great to see the stock markets come back the way they did the last couple of years. And people would say, you know, there's financial deregulation. regulation, there's growth. Actually, there's defense companies or some positive things going on there. But how does that experience, you think, then inform what might happen now? Well, I mean, one of the reactions we've seen so far this week is some profit taking on that global diversification trade. Yes. Right. 2025. Some of it was enthusiasm that you're seeing some growth catalysts overseas, much lower valuations. Some of it was, I want to diversify a bit from the U.S. for a variety of reasons.

but a lot of capital went to South Korea, to Japan, to Europe, to emerging markets. Part of the reason the dollar's a little stronger this week, it's not the safe haven per se. It's Americans who had said, I'm going to take more overseas risks saying, maybe I'm going to take a little off the table. And so that capital coming back, you sell, you sold dollars to buy your Korean stock, you bring it back. Do you think it was weird that we didn't see the tenure go back below, you know, the move there was a little bit countertrend? So I think what's happening in the bond market right now is a constant. combination of inflation risk and term premium. So on the, what you're seeing with the Fed Fund's futures is that the market is removing some of the rate cut hopes it had this year. So the

market is looking at the war as more of an inflation risk than a growth risk for now. And you see that in the two-year yield, which is up quite a bit. In the 10-year yield, what I think you're seeing more than anything else right now is just a bit more term premium. In that, i.e. risk to loan the government money for a longer period of time. Look, this is me speculating, this is not a cheap thing to do, right? Guns and butter. We're not spending money on butter right now, on the consumer, on social safety nets. We're spending money on guns. And when three planes go down, that is $97 million a plane. Think about the money we're spending as a government for Venezuela, for the Middle East. It might be for wonderful reasons. I'm not questioning

the justification. But it's real. But it's real money. It's real money that can't be used for something else. I think to your point, it's going to affect what the Fed here does, but it's probably going to affect what the European Central Bank does more than us because of those inflationary pressures you just mentioned. And it's worse than you even said. So for a country like Europe, you have the shock from higher natural gas prices, and because the dollar is going up, that means the euro is going down. And so you also have a weaker currency there, which also pushes up inflation.

So they're getting really a worse stagflationary shock. This can hit growth over time if it lasts, and it pushes up inflation from commodities and the currency. So it puts the European Central Bank in a tough spot. I think, I mean, we just saw comments from the Reserve Bank of Australia a few days ago suggesting they just raised rates in February. They might raise them again. So one thing to keep an eye on again, it all depends on the duration of this event. But if it lasts long enough and or prices and oil and gas go up enough, you could get central bank tightening that actually tightens global financial conditions.

That eventually starts weighing on stocks more than what we've seen so far. Again, it's all about the clock ticking. This is the whole, you know, argument before the 0708 collapse. And again, we don't have over-leveraged home prices or anything like that. But you had these soaring commodity prices at the time and this whole argument about, you know, how much the Fed should tighten or not in response to that. The big difference is in 0708, soaring commodity prices were demand-driven. Today, it is a supply shock.

When it's demand-driven, you can have strong equities and strong commodities, because the demand means more revenue for companies because people are spending more. This has nothing to do with demand. This is, we're taking supply out of the market. Yeah. And that's the, you know, that makes people poorer and unhappy everywhere, basically. The U.S., I'll leave you with this. The U.S. Economic Surprise Index has been going up. That's good news.

Economic data better than expected. the U.S. economic policy uncertainty index also going up. There aren't a lot of moments where those things go up together for very long. Unmatched expertise and insight. Rebecca Patterson, thank you. Thank you. Really appreciate that. Senior fellow to Council of Form Relations, and the podcast is called the spillover. Thank you.

See, we're spilled over. Yes. Well, we got some breaking news from the Federal Reserve just weeks before its next monetary policy meeting, Rick Santelli's been flipping through the beige book, what are some of the highlights or low lights, maybe, Rick? Well, I'll tell you, first we should put a kind of boilerplate on this. The confrontation with Iran started on the, what, the 27th? And the beige book was written on or before the 23rd of February.

So really, in many ways, there's issues here that may be changing. But having said that, on growth, most districts, moderate. Moderate was the word, okay? on the labor market, stable, on prices, moderately higher, and on wages, moderately better. So everything seems to be okay with the economy. It doesn't seem as though that big area on prices has gotten any worse, and it didn't seem as though the labor question marks. We didn't see any significant decrease in the outlook for labor. But all of that may change, especially the pricing side considering what's going on with the brand conflict. Now, having said that,

people are smart in the market, Sully. You know, if you look at an intraday of twos, tens and dollar index, there's very little movement. We could argue maybe a half to three quarters of basis point higher in yield on a two year. The tens have been stuck at 407, and the dollar index really was at 89 now it's at 87 and a half. This morning, we did have some very good news. When you look that the PMIs, especially from S&P Global, their final reads came down just a little bit, but the ISMs were really strong. So all things considered, I think it was very good numbers today, and that was reflected partially in the markets, but you know the big story.

The big story is all about energy. It's about how the dollar's very strong because we're self-sufficient. We're basically we potentially can export more LNG. You discussed all the issues with Europe. and indeed, whether it's Europe or Asia or what's going on with South Korea and their ETFs, all of that, of course, is going to be affecting some of the variables I just described that are covered in the beige book. Kelly, back to you. Thank you very much, Rick. Appreciate it, is that 10-year yield hovers just below 4.08,

Rick Santelli. Still ahead, we are closely monitoring the White House where big tech execs could arrive any moment to sign a major power pledge, and energy prices are on the move again on the fifth day of the Iran War. The Trump administration saying the U.S. will provide support for oil tankers transitioning the Persian Gulf. Steel WTI crude fractionally hired today. Around 75 a barrel, we'll discuss that and more after the break. When oil or when will oil tankers move through the Strait of Hormuz again, that's really the question. I mean, I guess there's a few, but that's kind of one of the main questions that may determine everything having to do with the price of oil, natural gas, fertilizers, aluminum, and even water right now.

Take a look at this time lapse over the last few days. Traffic through arguably the most critical shipping lane in the world, at least right now, still frozen. No tankers, no transit, minus a few brave or really foolish ships that are making the run at night, literally turning off their lights and making the run. This is the world's most expensive parking lot of giant ships. It's also playing havoc with shipping routes that are still running as tanker rates continue to spike every day, as insurers pull war risk coverage across the region and raise rates elsewhere. Of course, the Trump administration, as we talked about yesterday, says it's ready to act.

Here's Treasury Secretary Scott Besant on Squawk Box this morning. We have a series of announcements that we're going to be making. U.S. government is going to step in, and when it is appropriate and should it be needed, the U.S. Navy will provide safe passage through the straits. But your next guest is not convinced that naval escorts or an insurance backstop by U.S. Treasury would actually work. Let's talk about it. Joining us Rapid Energy Group founder, Bob McNally, also a former energy advisor to President George W. Bush. You've lived through a few of these types of war situations, Bob, so we really appreciate you coming on and value your insight. Why are you skeptical of either military exports and or this potential idea for?

for U.S. government backstops on insurance? Yeah, hi, Brian. So it's about timing. Look, ultimately, the United States is going to win and prevail militarily. But I've rarely seen such a timing mismatch. As you know, Brian, we saw this coming for months. We've mapped it all out. We did the deep dive.

And one thing we were sure, and we talked to military experts, is that if it came to blows over the Strait of Hormuz, it would take weeks to suppress. Iran's many layered asymmetric drones, mines, missiles, fast attack boats, etc. And we will get the straight open, but it will take a lot longer than the market things. You know, Brian, going into this, I talked to a lot of folks. I was at IE Week in London. And when you talked about a potential war on the Gulf, they would say, you know, there's no way the United States can let this go on for more than a day or two. Because look at the Gulf War I over in a day or two,

Gulf War II, finished, a day or two. I think the market is overly optimistic about how quickly we will see a resumption of Strait of Hormuz flows. That's the issue. Weeks, not hours or days. And I know we're focused on oil a lot, but look at natural gas. Okay, Qatar, the country of Qatar. Qatar energy is offline.

Their facility was hit by either a missile or a drone or both. That is the single largest country producer of natural gas. They declared force majeure, act of God. They basically can't produce natural gas. We're selling as much as we can. It's very good, by the way, for Schneer, Venture Global and probably a few other stocks out there, Bob. But why then, why then is not the oil or natural gas market responding more to what you're saying? You're a smart guy.

A lot of these people are reading what you're writing, and they're still not responding. Two reasons. Two reasons. Going into this, we had seven years of boy who cried wolf. since the ad cake attack in 2019 when Iran attacked Saudi Arabia, biggest open ever in Asia and crude, reversed. Russian invasion of Ukraine, reversed. Bomb Iran last June, spike, reversed. The market has gotten bored with and skeptical that geopolitical events will disrupt oil, number one.

Number two, investors and traders going into this can't imagine a world in which the U.S. military will allow someone to shut down the Strait of Hormuz for more than a few hours. or a few days. It's simply inconceivable. It's never been seen before. In the tanker war in the 1980s, no one was trying to shut down the strait. Iraq and Iran were letting that thing open. They were hitting ships in the Gulf in the north. We've never seen it before. And I think folks simply don't understand Iran's capabilities and that it's not going to be over in a matter of days. What are Iran's capabilities at this point, Bob? What do we know? Yep. So many. So you start with drones. They have thousands and thousands of of drones. Shaheed drones. I've seen press reports today that the administration briefed Congress

that the drones are a little bit bigger of a problem than they thought. Those drones have been used to attack ships. They have fast attack craft, thousands of small boats armed with missiles or bombs that can dart out and attack these ships. They have anti-ship cruise missiles. We are going and hunting those things. Those are easier to attack the launchers. They also have long range artillery and they have mines, all kinds of mines, floating mines, nasty little rocket mines you can put on the floor. Now, look, we've been preparing to deal with this, and so we're going to see, but this is not going to be over in a couple days. But it sounds from talking to analysts, like what we're trying to do is degrade all of those weapons and munitions that you described. How far along are we in that

process? Not far along yet in terms of these types of Hormuz disrupting assets. So far we've been going after larger missile launchers, command and control, sinking ships like we saw today. But those are ships. Those ships don't really pose a threat to the tankers. The real threats, I think we're going to be going after in the coming days. And that's really the most important thing going into next week. Will our attacks in the coming days, and we're just going to saturate the coast of Iran, now that we have air superiority, will that suppress those capabilities that remain largely

intact that can prevent those boats from flowing. That's the bazillion dollar question going into next week. Well, here's the other risk. Tankers are leaving. In fact, if you look at, and we're kind of living on these live maps of marine traffic and others right now. And the tankers are like, they're making $3,000 and $400,000 a day elsewhere. I posted last night, a shipbroker texted me with something, confirmed it. It's $350,000 for the Gulf Coast of the United States to China. it's 15 or 25 or whatever the number might be. So they're all going to leave, Bob. So even if and when things start to reopen, what if there are no ships there to take the product? They've got to come back. Ships are big, but they're slow. How long will it take the market to react and get

back to normal for every day this goes on? Because pretty soon, there won't be any red dots on marine traffic because they're all going to leave. Right. It'll take weeks to adjust. But, you know, that's a solvable problem. I mean, look, Ross Lafon, that LNG facility, if it has to shut down, it'll take two weeks to reopen that. So, but, you know, it'll take weeks, Brian, but, you know, the world will adjust, prices will adjust. That's a problem we want to have. The problem is how long before we peak in this crisis and can move into getting back to normal. And I think the thing, the market is not pricing in yet, is this is going to take a lot longer and be harder than I think folks thought going into it. Bob, can you speak to the China question? We are allied in the sense

that China gets 75 to 90 percent of its crude via seaborne routes, according to Barclays today, and is the world's largest LNG importer. So it's clearly in its interest, we should make them pay for it or work together or something. You know, that's right. And the Chinese are terrified. under a terrible situation. The Iranians are none too pleased with them. The air defense units, they sold them, didn't work too well. And they've never really been that good of friends. China's not going to intervene yet. They don't yet have the military power to project. I don't think they're going to come in and even help with meaningful escorting or anything like that. China is just on the receiving end of this. It's maintaining good relations with the United

States so far. So I think China's just hoping and praying that this gets over with. As you mentioned, Kelly, they're perhaps the most endangered by Putin's probably doing the best. China's doing the worst from this. It's a fascinating kind of turning, turning things on its head here as they have to figure out what to do about this eventually as well. Bob, really appreciate your time. Thanks for joining us. Thank you, Kelly. Bob McNally. The conflict in the Middle East is already impacting what we're paying for gasoline. According to AAA, the national average at the gas pump has jumped to $3.20.20 a gallon. Now, that's a 10 cent increase from yesterday. It's the highest level since mid-September. We're up 20 cents from a week ago. We are, of course, still below

the record highs of 2022 when we were paying five bucks a gallon. All right, it is not all about energy in the war in Iran. There are some other stocks that are moving. For example, raw stores, all-time high, earnings beat. They raise guidance. They got upgrades at both Guggenheim and Telsey Advisory. On the flip side, apparently nobody's drinking. Jack Daniels maker, Brown Foreman, liquor company stock at a new 52-week low,

and the CEO said that cost pressures over whiskey are experienced. expected to persist. Discount close up. Whiskey down. Welcome back to Power Lunch. I'm Frank Colin with your news update. Interior Secretary Doug Bergum is in Venezuela today in a push to expand U.S. investments there. He's expected to meet with acting President Delci Rodriguez and the U.S. Embassy in Caracas says you also talk with U.S. and Venezuela oil, gas, and mining companies to work towards a legitimate mining sector. He's the second cabinet member to visit the country since the U.S. ousted President Nicholas Maduro in January. President Trump said today he will soon make an endorsement in the closely watched Texas Senate race incumbent Senator John Cornyn and Texas

Attorney General Kempaxson are headed to a runoff election for the Republican nomination. But the president says he will call whoever does not receive his backing to immediately drop out. According to the Atlantic, Mr. Trump is expected to endorse Senator Cornyn. And Jorz in New Mexico heard a sworn video testimony from Medicio Mark Zon, Zuckerberg today in a landmark social media trial. Prosecutors say his company failed to protect children from predators on its platform. Jorers saw a deposition from Instagram CEO Adam Masseri yesterday. Brian, back over to you.

All right, Frank, Colin, Frank, thank you very much. A power move at the White House tech execs arriving to sign a pledge to supply their own electricity for data centers. You have Alphabet CEO, Microsoft's president, Brad Smith, Meta President, Dina Powell McCormick, and more. Already in that building right there, and we'll get you more coming up. Welcome back to Power Lunch. Today's other big story is a huge meeting between tech execs and the Trump administration at the White House. Executives from Amazon, Google, Ruth Porad is there. Meta, Microsoft, Oracle, OpenAI, and XAI are all there where they will sign a pledge that they,

big tech, will pay for their own power and not you, the electricity consumer. Amon Jabbers, has the latest at the White House. Well, he's in our bureau, Amin. Hello again. A lot, Kelly. It's hard to keep track of me. And take a look at our camera, which is at the White House. It's on stakeout detail at the White House right now. There you see the entrance where we expect to see a number of these tech executives. The White House says they'll be there shortly to sign what they're calling the ratepayer protection pledge, which the administration says will protect Americans from electricity price hikes from data center energy consumption.

I should note that, Kelly, in addition to the executives, you just mentioned who we've already seen, just by chance, our camera saw a billionaire investor, Bill Ackman, emerging from the White House just a short time ago, but he didn't tell us what he was doing there. We'll ask the White House for that one. We saw Dina Pal McCormick, the president and vice chairman of META. Other executives also arriving at the White House for this meeting just moments ago. And in addition, we're expecting Google, Microsoft, Oracle, XAI, OpenAI, and Amazon to sign this document at the White House this afternoon. We're watching now for arrivals of other tech execs over the next You know, half hour or so, the White House says that this pledge is going to mandate that companies, quote, take action to further strengthen the grid and to commit to hiring and training employees from the communities where they build these data centers.

It's all part of the president's push to keep costs down for American consumers. And, of course, blunt the impact of inflation on voters before the midterm elections later this year. Kelly, back over to you. Taking on added urgency, of course, with what's going on with energy prices now. Amen, thanks. Appreciate Amy Javvers. All right. So let's stay on the topic of big tech because Apple is making a big move

and hoping the lower end takes the higher road, at least when it comes to sales. Mackenzie Sagalos has more on what Apple's doing. Are they going down market for the first time ever, McKinsey? So Apple's wrapping up its week of hardware launches with its most affordable laptop. It's ever released to answer your question, Brian. And the MacBook Neo is about half the starting price of the current MacBook air at $599. It's also a clear test of how efficient Apple's chip strategy has become. Instead of using the M-Series processors found in the rest of the Mac lineup,

Apple is using an iPhone class A-series chip here, and that lets the company cut the price much more aggressively while still running full MacOS and supporting Apple intelligence. It's really Apple flexing how far it's in-how silicon can stretch. And it helps complete the story that Apple has been telling all week. Across the refreshed lineup, Apple's been pushing AI readiness, faster chips, more memory, and Apple intelligence in cheaper devices as it lays the groundwork for the next wave of Siri upgrades, including that Gemini-powered reboot expected to begin rolling out this spring.

And guys, the Neo pushes that strategy even further, giving Apple a machine that can compete more directly with Chromebooks and entry-level Windows laptops while putting an AI-capable Mac in front of students and other buyers who have never owned one before. All right, McKenzie, thanks. Interesting strategy here, especially. And look, again, the shares have held up even despite high memory prices and pressures there as they make these moves. Mackenzie, thanks.

Let's get to the street reaction to the White House meeting and these new products from Apple will bring in Wedbush Security's Global Head of Technology Research, Dan Ives. So, Dan, welcome. So many topics to run through. We'll get to the White House meeting in just a moment. Any reaction to the Apple products the last couple of days that we've seen and what the impact this will have in their financials? Look, it's super smart.

I mean, look, they're going down market, but they really have to because right now they're looking to get more and more new buyers when it comes to Macs, when it comes to iPhones. And that's the smart strategy, because the reality is AI is coming to Apple. And this right now, for them,

if you look from memory and you look at everything that's happening, I mean, they're doing a very good job managing. And this could be ultimately 100 to 200, incremental growth to the June quarter. Wow. And I know that people are hoping to hear maybe something from Jensen Wong one way or the other on memory pricing.

He's speaking right now at this Morgan Stanley conference. Here's something else he addressed down a couple of moments ago. I just want to mention it. He said that Nvidia's $30 billion investment in Open AI could, quote, be the last time we'll have the opportunity to invest in a consequential company like this. He's talking about because they could have this IPO by year end. But what is the broader significance of that statement, do you think? Yeah, look, part of it is he's playing a game of poker, right? I mean, there definitely can be more investments, obviously, in the coming years, you know. But I think the reality is there's more and more pressure for Open AI for Anthropic, for these other companies, where they're not just going to continue to get these investment dollars in the tens of billions. They're going to have to ultimately show profits. It's in arms raise, too, that's all happening. And I think you're seeing that with Anthropic and software and what's happening there. And Jensen's well aware.

He knows he has the magic wand. And when he talks, everyone listens. So, you know, this is very strategic in terms of what he's seeing here relative to open AI, a little shot across the bow. The revolution will not be televised, Dan, but the AI revolution is going to be powered largely by natural gas. I know you're not the energy guy, but we've been talking a lot about the war in Iran and energy prices.

Any part of you worries that what we're seeing in energy at some point may play havoc with AI. Look, Brian, no doubt. I mean, obviously, you're the energy guru. And I think the reality is that when you look what's happening right now, the biggest worry is the shortage from an energy perspective. There's more data centers under constructing than active data centers. It's why you have the White House meeting today. You know, these companies are going to have to flip their own bill. And look, Nat gas is going to play a huge role. And big tech companies, the hundreds of billions are spending, energy is going to be a piece. And also, it's going to be a big second, third derivative. I could argue energy is going to be one of the

biggest derivatives of the AI trade. Yeah, and that said, Dan, I've been watching your list of kind of, you know, where would you be buying as we see this rotation, kind of vicious rotation? One day, it's software names that are up and then microns down seven and then it's up seven. And I notice, I think Service Now is one of the ones that you feel kind of confident about maybe in the software space. What do you think is happening broadly here? Yeah, I think first of them is That anthropic AI goes trade fear, right? And I do think that's a bottoming that we saw last week with the anthropic event.

I think investors realize bars can be worse than the bite. Software thing's bottoming out. I mean, I talk about Microsoft, Salesforce service, now you look at everything McDermott's done. Cybersecurity, look at crowd strikes numbers, Palo Alto. And I think Palantir both strategically have their position also from a military perspective,

that's gonna be a huge positive. Look, this is not the time to throw in the task. It's a very bumpy, turbulent period, but you look at names like Microsoft. You look at sort of navigating the storm on safe names, defensive, but also offensive. And like I've said, I think the software sell-off here, the most disconnected sell-off. I've seen my career on Wall Street. The most disconnected you've seen in your career, yeah. And there's talent here, obviously, you know, with everything going on there.

Quick last thought on this kind of fight between the Pentagon and AI. Is it all just a show? Look, I think it just speaks to like the two worlds are clotting for like an anthropic, right? And I think obviously Open AI came in there, a lot of soap opera, what we saw Friday night. I'd say they ultimately are going to have to rely more in Palantir, more in the traditional software base. The LMs are important, but essentially they're going to be plug and play over the coming years. It's about the data. But for Anthropic, look, I think they touched the third rail situation.

And this is going to be, you know, this is going to be a very content. tension's issue within broader tech over the coming weeks and months. So what are people getting wrong then? If the markets are unemotional, they're selling software because they believe something is occurring, Dan. What are the sellers getting wrong? Yeah, Brian, with the sellers getting wrong, they think Anthropics going to unseat software players.

They think structurally software is broken because of LMs, Anthropic Open AI and others. And I think that's, like I've said, that is like, that's, that is like, that's, That's a fictional tale. Software, maybe they haven't improved it yet from a modernization respect, but Salesforce, Service Now, Microsoft, cybernames, you look, a checkpoint, you know, crowd strike, pow out to others. They are going to play huge roles. But look, that's what we're going through. This is going to be in arms race, but the anthropic view that they're going to replace software,

that's a fictional tale that I think ultimately would be a bottoming event for software. All right. We'll leave it there. Dan, thanks for the time. Appreciate it. By the way, Dan, you've got to get like pink curtains next time behind you. Okay, I'm definitely going to get that for the hotel room. Yeah, start traveling with that.

That's like the beige book of curtains because they're beige. It's a good thing you look good, Dan, with your colors there. Dan Ives. We are putting in some work for you showing some of the most search stocks on CNBC.com right now. We will reveal the names and stories after the break. All right. Time now for your trending ticker of the day. Thousands of you are searching this on CNBC.

right now, and it is Coinbase, up double digits 15% or so on the session. There you can see it. It's one of the best performing stocks in the whole S&P today, and it comes after President Trump threw his weight behind the industry's battle against banks over yield-bearing stable coins. And get this, Coinbase has surged nearly 50% off of its lows of the year. Other crypto exchanges and Treasury company names are having a good day as Bitcoin hits a one-month high. Robin Hood on track for its best week since November. strategy goes one better, headed for its best week since April. All these names, including Tom Lee's Ether Treasury Bitmine, are down double digits still over the past six months.

All right, more power lunch. We'll talk about Marine Insurance, Contessa Brewer. That's a tease. Next. President Trump's promise to protect the strait of Hormuz with naval escorts and provide government-backed marine insurance underscores the urgent need to restore flows of energy from the Middle East. But will it work? And if some, how? Contessa Brewer joining us now. Listen, marine insurance, like this little tiny obscure world that heretofore never was talked about and now of a sudden all the attention's on it. It really, it's becoming a crucial piece of this puzzle, which is one reason why you heard Donald Trump say, look, we're going to make sure that the vessels that are in the Persian Gulf

have the insurance they need and potentially an escort through the Strait of Pormuz. If he wants to keep gas prices low in the United States, getting the oil moving, he thinks is part of this. Now, here's the problem. The global brokers stand at the ready to help the shipping companies get that insurance, get that backstop. The problem is the talks with the government

are at their infancy. For instance, Marsh told me, yeah, look, we reached out. We have a lot of experience in this arena. We reached out to the agency. It's an independent agency that would be involved with this. And so far, we just don't have any detail.

So my questions, does it only apply to Marine Hole? the actual physical ship in its equipment, or is there going to be insurance for the cargo as well? As you can imagine on a car carrier or these big oil tankers, the cargo is also expensive and important. Will it apply to the cruise ships that are stranded there? Does it have to be just on ships that are flying American flags, or are they going to extend this to other ships that are carrying cargo that the United States deems crucial to its aims? In the 1980s, when there were these tanker wars, we had actually, I'm told, put American flags on Kuwaiti ships in order for them to get this kind of insurance. Beasley shares, you're today, they had a big surge because there's this Zurich takeover that I guess might be happening.

So I think we're all looking at this to wonder, you know, not to think about it quite this way. Isn't an investment? Are the companies going to trade down? Because if they're being forced to cover this like high risk, you know, product, then they're going to be put in an awkward situation. Yeah, I was talking with the head of Howden, R. which is a big global broker and reinsurer. And the guy said, look, is it a risk if an oil tanker gets hit? Yes, it is.

But you know what the bigger risk is? That oil prices climb. That drives inflation. Then it drives up insurance prices for everyone. There's trillions of dollars of capital involved in the insurance industry right now. There's enough capital to cover all of this. But it could be that insurance is more expensive for everybody. As I understand it, correct me if I'm wrong, insurance is also priced on the total value

of the ship and the cargo, maybe 0.15%, something like that. So if the price goes up, insurance companies make more money. There's going to be a big upside, I think, for a lot of these companies potentially. There could be because right now what's happening is if, and it's separate, right? The Marine Hole, which is the ship, is different from what's the cargo. That's a separate line of insurance. But imagine the Marine Hole war insurance is now four to six times more expensive. That's what you have to pay.

And not just in the Persian Gulf. Lloyd's has designated a far broader region to be at risk of war. So you're paying for, it could be more than a million dollars for the insurance that you need for this ship. And nothing happens. Okay, then the insurance company makes that. That's true. If you have to pay out, totally different. But this is exactly why you have investors interested in going in and being part of the potential upside here. There's risk involved. There is. But in proper. property casualty and reinsurance. What we've seen with rates in the last couple of years has been very good for investors. It's a great point.

A complex area, but one we're learning more about, as mentioned. Contessa, thanks. Sure. Contessa Brewer, more power lunch after the short break. All right, not quite done yet. Let's wrap it up by taking a look at some of the biggest movers in what they call the power and digital infrastructure sector. Basically, the companies that provide the power to do a lot of the stuff with AI that we

want to do because you've got a broader rebound in the markets, some omega-cap tech stocks, energy infrastructure names like Hutt 8, CEO recently on. Oaklo, Bloom Energy, Vertive Holdings, they're all posted solid gains. Today, Oaklo, keep in mind, stocks down 41% in three months. But still, it all comes President Trump meeting with tech leaders at the White House afternoon to formalize a pledge, pledge, provide their own power. So they're not guaranteeing it. Bound to anything.

It's a pledge. It's a symbolically important. Symbolic. And Acklo, by the way, despite all these gains today, Acklo, Hunt. 8, Verdevin Bloom are lower over the past week. It's been this kind of recent risk-off move in the markets. But going back over the past year, each of these four have posted triple-digit gains as investors are hugely bullish on the companies that will be powering megacab data

center ambitions. You just heard it from Dan Ives as well. By the way, quick programming note before we go, Victoria's Secret brand new CEO of Hillary Super will be here exclusively tomorrow following the earnings. Look, Brian, at that share price. They say, wait, where are she going with this? The share price, people, over the past year is up 100. 55%. Very cool. Look forward to that. That's tomorrow because we're done today. Yep. Closing

bell starts right now.