Power Lunch - Stocks sink as Trump attacks Powell again and sows investor doubt 4/21/25

Episode Date: April 21, 2025

Stocks fell again on Monday, as President Trump ramped up his attacks on Federal Reserve Chair Jerome Powell, raising questions about the central bank’s independence, while traders received little signs of progress on global trade talks. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Another big sell-off for stocks. Every sector in the market is lower by two, three or more percent. Energy coming out of the energy and AI trade. And President Trump ramping up the name calling on Fed Chair J. Powell. Hi, everybody. Welcome to Power Lunch. Kelly is back, as you can see from Squawk Box duty. And I am Brian Sullivan. Welcome. Thank you. And let's look at the markets, which are very unwelcome on this Monday afternoon. The Dow is down 1, 270 points right now. So we're at session lows. And if we close here, it will be the 11th thousand point drop in the Dow's history. And it's the fourth this month. Now, the S&P broad market, here's what you need to know, down 3% and down 16% from the 52-week high. We're about 200 points above the intraday low of 4910 on April 8th.

Keep these in mind as people look for a retest, and is that an entry point? The NASDAQ is the worst of the major averages led lower by Nvidia and Tesla. Tesla down 7% ahead of its earnings tomorrow. And of course, check the yield on the 10-year, because unlike many most previous stock sell-offs, where you at least get some cushion here. Nope, not getting it today, 440. This time treasuries are being sold as investors sell stocks as well. Dollars down, yields are higher. All right. So let's stay right there with the markets and your money. It is easy to forget, but the S&P 500 crashed just three years ago. It fell 27 percent at one point in 2022. But it wasn't like this. In 2022, the sell-off was fairly slow with stocks getting sold piece by piece from January to October.

This time, the selling is quick, one of the fastest fall since COVID first hit. And before that, the subprime crisis. So let's talk about all this, where it goes and what's really going on with Anderson Capital Management, CIO, Peter Anderson, and Oppenheimer, head of technical analysis area. Well, Peter, I'm going to start with you. It's easy to forget that in 2022, the markets fell 25 percent because it was kind of slow. And dare I say, orderly, this feels different. What are you advising your clients to do right now? Well, of course, it feels very different because, you know, it was simpler then.

I hate to say that. It was very painful. But it was simpler because we were all focused on one thing. The Fed raising rates. That was the theme for the year. This year, too many variables, too little visibility. Clients are asking what the heck should we do? And I would say, will we be talking about?

six months from now, we're hoping that this will all be resolved in six months. If you are still happy with your equities and you can logically defend it, I would stay. If you can, stay the course. Well, I would say, Peter, what if it's not resolved? Everybody, you're right, kind of keeps waiting. Ah, it's negotiating tactic. Art of the deal. What if it's not resolved, Peter?

What if we're still talking about this in June and July and August? Well, then. We still could be talking about it. and not that it will be totally resolved, but we should get some clarity. I mean, if this pressure continues everybody in the administration, so far they've been pretty much mute about this reaction, reacting to the markets.

But my sense is at that point, there will be some kind of acquiescence or giving in or changing course because we know that the administration takes a very serious read on equity, markets, almost in a vanity sense. Ari, jump in here, especially as we mentioned a second ago, we're getting back to almost the lows, around 4,900 on the S&P. Technically speaking, does that interest you? In terms of levels and durations, how we think of these setbacks, first off, let's go back to 2022. In hindsight, it was short and orderly, rest assured. We were all scared. You turn on all

these financial broadcast, there was no more certainty than there there is the uncertainty now. People were worried about runaway inflation. The point being, we've seen this before. We've seen these declines. They all play out the same way. And I think that how we're thinking about it is that we've, yes, we've suffered kind of what you would typically suffer over a seven-month-time period and only two-month-time period. And what that argues for is that we need more time. I don't think this is through just yet. But with that said, there's going to be ebbs and flows along the way. I think April 7th, that was the high intensity low, at least that's the point when I think a lot of stock spot and when downside acceleration is greatest. Typically what happens next, you'd get a test of that low.

You're going to be looking for signs that selling is becoming less bad. The VIX isn't going to be as high as it was. And that sets the stage for the counter trend rally that I think we could see into the summer. I think that 200-day average is going to limit upside. And I think, again, thinking longer term, we're not out of the woods just yet, that there's going to be additional volatility shocks in 2025. But it's interesting you're saying that kind of time trumps levels, right? So some people would look at this and go, hey, great, we sped up a seven-month sell-off in a two-week period of time. Now I can get in and not have to worry about it. But your point is more, no, like these things still are going to take a while to work themselves out.

That's right. Typical, you know, we came into the year with below-average market expectations, just because we were pushing into the third year of this full cycle. Now, as you think about the down cycle, typically they'll peak the trough lasts about seven months. This one's only lasted about two months. Typically, you'll see a retracement of 18 months of prior performance. We haven't done that yet. So, right, there's a time element.

You even think about 2022. We did a lot of downside in those first few months into May. And then really from May to October was the time element of it. So, again, it could look like 2022. I guess the point being is that we have greater conviction, more time is required here, rather than necessarily significantly lower levels. That was a 50% retracement of the prior bull market, 4,800. I think that could at least act as the lower end of this kind of range bound action that we're expecting.

Yeah, and Peter, 2022, we're coming out of COVID, obviously. There was a lot of other things that were going on. This feels different, like I said at the top. How do we get out of this? Do you view this as a self-inflicted market wound? There's always opportunities, even if, however you do, define this. And so we're not just sitting here waiting for this storm to pass. I mean, we're looking for opportunities. So one free gift that the market has given us, in our opinion, are

international European aerospace and defense companies. They seem to be totally independent of executive orders, tariffs, et cetera, and more focused on the European rearmament defense build up. So while we're waiting for this storm to pass, there are opportunities. And I would say that, in our opinion, is a very strong opportunity right now. Yeah, we've talked, Peter, a lot about this stimulus for Germany and stimulus for Europe. Some people, some would call this the, quote, sell America trade. Are you that far? Not at all. Instead, I'm looking at broadening the horizons and the fact that American policy has, in part, created this opportunity. We remember that the current administration's attitude toward NATO has fed this.

We've been watching the GDP growth of the NATO members prior to Trump's election. It's always been under 2% of their GDP, remarkably. In November, it broke through that 2% GDP spending level. and so that triggered our interest in those companies. Before then, we really were not paying much attention to them at all. So there are good things that come from uncertainties right now. Do you, we get some news here, Peter, but do you worry about what's going on between the president and the Fed chair

or whatever could happen with the Fed here in kind of the direction that could go? Or is that another thing that you think we will be talking less about in six months? Because that one, you wonder, before we're talking about even more. Right, we're hoping that. But, you know, history, if you do look back, I'm not much of a proponent of saying, you know, history repeats itself, et cetera. But this isn't the first rodeo that has been like this, right? I think all the way back to President Nixon, there have been these public and private disputes.

This one does seem over the top, but I do think that it might be some saber rattling and that the current Fed will play out the term. All right. As I mentioned, we've got some news to get to. Gentlemen, for now, thanks. Peter Anderson, Erie Wald. Megan Casella is at the White House. Megan, what's happening? Hey, Kelly.

So a White House official confirming to me just in the last hour or so that top officials from Target, Walmart, Home Depot, and Lowe's, will all be right here at the White House this afternoon for a meeting with President Trump. Now, we don't have an exact time for the meeting. I was told simply mid-afternoon. And we don't know exactly who from each company will be attending. We are expecting most, if not all four of the companies to send their CEOs. But the official I spoke with mentioned that some of them may be top representatives instead. Now, I was not given any details on what exactly the meeting will focus on. I was actually told they've been working to get this scheduled for weeks, meaning since before April 2nd,

when that 10% universal baseline tariff and the country-specific tariffs had been rolled out. But we can, of course, expect tariffs to be top of mind for each of these retailers, all of them dependent to varying degrees on imports from abroad. And remember, guys, the president has said that he would be open during this process to talking to companies about the tariffs, potentially looking at some exclusions here. So we do expect to hear more about this meeting after it happens today. We'll bring you guys more, of course, as we have it. Guys. Okay, Megan, thanks, Megan Kassella. After the break, the president wrapping up his attacks on the Fed chair demanding lower rates, fears that he wants to fire the chair,

our spooking investors today. We'll discuss it with former Dallas Fed President Richard Fisher right after this. Welcome back as the market sell-off continues. The president, is increasing the pressure on Fed Chair Powell to lower interest rates. Last week, Trump hinted at the termination of Powell before his term expires. Earlier on Squawk Box, Federal Reserve Bank of Chicago, President Austin Gouldsby, weighed in on the importance of the Fed's independence. I agree with the Secretary of the Treasury when he said Fed independence is a jewel box that we don't want to mess with.

All economists, I've been into Fed for a little over two years. Before I was ever at the Fed, I would tell you, economists are basically unanimous. that Fed independence is critically important. And to see why, just look at the countries where they don't have Fed independence. Inflation is higher, unemployment is higher, growth is worse. Let's now bring in Richard Fisher,

the former president of the Dallas Fed and a CNBC contributor. It's great to have you here. I don't know if you caught Larry Lindsay's comments last hour, but he kind of hinted that the Fed had been hostile toward Trump or towards the GOP versus the Biden administration so that there might be some history to settle here, Richard.

Richard, but one way or the other, do you think the president would actually try to terminate the Fed share before his term ends in May? First of all, I don't think the Fed's been hostile to the administration. I mean, the one thing you don't want to have happen is for the Fed to become politicized. And by calling J. Powell names as the president has done and insisting that he moved would just,

if they were to do it now, it would be based on political pressure, which would undermine the sense of the independence of the Fed. I don't think it's in the presence of interest to sack even if he could, and I'm not sure he can, Chairman Powell. I think the markets, others have commented on this, and I think they're very wise in doing so, that the markets would react extremely negatively. So to me, this is just a way to take away or shove off pressure to somebody else, for the consequences we've had of this tariff chaos that we have presently. Do you think a case can be made for lowering interest rates?

The market is at three and a half rate cut. So what's interesting about this is it's not even like there's that much of a dispute that you could lower interest rates here. It just seems to be the idea that maybe whoever the president does nominate, and this is where my mind goes, is it more about how high the deficit is, what the Fed might ultimately do or choose to do? if there were no other options for bringing interest rates down and so forth? Well, two observations.

First of all, after they did the 50-based point cut, and they did the three cuts, interest rates went up. They did not go down. And in fact, they went up 100 basis points on the 10-year. Businesses depend on where the intermediates, the longer-term bond market is trading. And as you know, spreads have widened as well. So it's not clear, even if they cut, that rates will go down. Our recent experience is the opposite.

And I think that needs to be borne in mind. So I'm very concerned about this. I think the president, frankly, is undermining his own case. The impact has been a lower dollar and some dysfunction a little bit, but it hasn't gotten out of hand in credit markets. And I want to remind the viewers, forget about it. the stock market, the Fed will always act if the credit markets become dysfunctional and seize up. We did that in 0809 when I was there and they did it in 2020 and the COVID scare. So that's what you really are looking for to see whether or not there's extreme damage being

done in the system. But to make cuts now, it's like any other business. No business can make a decision right here because the uncertainty has been generated by the executive branch. So you think Richard, it's Brian. This is self-inflicted. I do. And I do think, too, again, put yourself in the FOMC shoes. How do you make a decision here? We don't know what the final outcome is or even where it's going.

And every business we've listened to, whether it's on CNBC or if we go to the analyst calls, we're hearing the same thing. People cannot make a decision here. Or they're giving alternative forecasts like United Airlines did. I was just about Richard to bring up United Airlines because they're given, And they're given like, you know, these two, and if people didn't see it last week, the CEO of United went on with Phil. And he said, well, here are my two forecasts for earnings. They're wildly different because he doesn't have any idea what's going to happen.

Companies cannot operate that way. You are in Texas, obviously capital, the energy trade. That's not going well. AI, that demand appears to be starting to slip as well. take a guess then, Richard, why do you think we are doing this to ourselves? Is there some part of this strategy that to you as a smart guy is like, ah, this must be the four-dimensional chess we're playing because nobody I'm talking to quite can figure it all out? I'm not sure about the smart guy, but thank you for that.

But I do think, look, obviously Navarro and Gang have captured the president's mind. I believe they're doing damage to him by not advising him properly. I do think our Secretary of the Treasury is the adult in the cabinet. And, you know, you should know also that he hears from former secretaries going all the way back. Anybody that's still alive is happy to advise him. We went through a similar situation when I was the assistant to Secretary of Blumenthal and the Carter administration. And he had to go in and tell the president, look, what you're saying is really hurting the dollar, we're getting close to a dollar crisis. You have to change your tone.

And Jimmy Carter did it. I happened to accompany the secretary for that meeting in the Oval Office. But after a while, one thing that's interesting, I hope this doesn't happen to Scott Besson because he's outstanding. After a while, when the secretary kept warning the president, finally, the president just fired him. Lumpel was out after two years. This Secretary of the Treasury is sophisticated and important. And if it's true that he did talk to the President and got him to delay at least 90 days, that shows his influence in the dialogue.

And if it's true that they had to get in there when Navar wasn't there according to the press, that also tells you where the maladvice is coming from. So yes, in that sense, it is self-inflicted. And I hope they give us some clarity. There's a lot that President Trump wants to do that he's doing well. And this is the one big stone around the neck of the markets, of the presidency, and of the economy presently. And the Fed cannot fix it, by the way. That's not the Fed's job.

What could happen here, Richard? Like, you know, if, let's say he doesn't remove him. Could he demote the Fed chair? You know, just curious how that would actually work. If there's a new chair come May and the rest of the committee doesn't agree with them, would they, could they be outvoted? Just there's a lot of different scenarios now. There is a history here. Remember, Volker was out voted at the beginning,

but Miller had done such a bad job or was so weak. Nice man, by the way, G. William Miller. They moved him over the Treasury. I wrote the transition memo, by the way, as a young man during that administration. Wow. And they put Paul Volker in there. And then remember, the governor's voted against him for a while.

And then he prevailed. There's another lesson here, by the way. Ronald Reagan tried to impeach Paul Volker. People forget that. He sent George Schultz, the most capable man on the planet, and Jim Baker, the other most capable man on the planet, up to the Senate to try to rally a vote against him to impeach him and vocor over maneuvering. The Senate also does not want to see a non-independent Fed, in my view. And I don't think they're going to acquiesce to a future appointment or an interim appointment or whatever it may be of someone who they view is just going to be politicized and go along with any president. Because they need 50 votes, yeah, to confirm.

They need a little more than 50 votes. That's correct. And we'll have to see. But I hope it doesn't come push to shove because if it does, we're going to have even further market turmoil, in my view, further spread, widening, higher interest rates, and a lot of pressure, which is damaging to the long-term confidence of our economy. And Powell has got a year left. I'm sure the search for the new Fed chair is, if it's not already on, will be soon. Nine more meetings to go. Richard Fisher, former Federal Reserve President of the Dallas.

Texas. Federal Reserve, Richard, thank you. Great insight. Thanks so much. All right, let's go to another city that also has its own Federal Reserve. That is Chicago. Rick Santelli joining us now to talk about something Kelly just hit on, which is the bond market reaction and moves given everything that is going on right now. Rick? Yeah, you know, I know you're always paying very close attention to the 30-year bond, the longest maturity on the curve, Brian. And the last time it closed above 5% was Halloween of 2023. Look at a year to date chart. This is fascinating. In January, we did have a yield close

higher than we're currently trading. It was around 478. It settled at the end of last year. It rallied or dropped the yields rally to 48. That's the high close of the year in yield terms. And it is significant today that we have a split decision. We have short-dated two- and three-year yields lower, everything else mid the curve, five year, seven year, all the way out to the 30-year bond yields are higher. The curve is steepening. Now, if we look at the S&P 500, Brian, on top of the yield curve twos to tens, I think that says it all. Its inverse relationship tells me short maturities, as you pointed out, are basically associated with the Fed, which is looking at three and a half interest rate cuts. Well, I'm not saying they're going to happen, but that's what the

is seeing. Now, if you consider the long-dated yields moving up, that's pushback. Is it long-dated looking at debt and deficits? Maybe. Is it looking at the notion everybody's talking about tariffs being inflationary, most likely? But as Richard Fisher pointed out, it's not getting ugly yet. It's a bit thin before we come into New York. And finally, Fed Fund Futures, I've been talking about them. Here's the D's contract. One week. You see the price going up? When it goes up, means investors are buying it, implying more rate cuts. Implying is the operative word. I'm not sure if they're going to run to the rescue, but I agree with Richard Fisher.

They will run to the rescue if what we're monitoring in treasuries gets nasty. Nasty means ill-liquid. Brian, back to you. But they're not illiquid right now. Still, we don't have a credit issue right now. Not at all. Not at all. As a matter of fact, once again, I'll say, if all's I'd,

did was being put in the room the last couple weeks with treasury yields only. I would think that the volatility up and down is pretty interesting, but I still wouldn't look at it and say, oh my God, something's really ready to blow. Rick Santelli in Chicago laying it out. As always, Rick, thank you very much. All right, obviously, a lot to come here on Power Lunch, but first up, a safe haven swap. We've got the dollar down. Gold keeps going up. And what about Bitcoin? What is this all telling us? It's coming up. All right, welcome back. We want to show you now CNBC's newest subscription streaming product that is called CNBC Plus. What you're currently seeing on your air right now is the CBC Plus data feed.

It displays an enhanced view in the latest headlines during our live business news lineup, Kelly. Very, look how spiffy and sharp it looks. You look spiffy and sharp. That's all that matters. As we watch the market selling off, we also want to check. in on some broader things. The U.S. dollar, for instance, falling to a three-year low as the president spat with the Fed chair. Add to the tariff fears hitting the U.S. economy, I had deficit playing a big role in a lot of this, too. It's kind of what brings this all together. Gold soaring to another record high on the back of weaker dollar. 3,400 announced we punched

through today for the first time. Gold is up 30 percent this year. If that were stuck in the S&P 500, it would be the second best performer behind only Philip Morris. Bitcoin is also finally getting its groove back. It's up 4% today, hit about 88,000 earlier, and now it's slightly off the highs of the day, Brian. Also lower today, oil and energy. There are some positive new developments about a possible nuclear deal with Iran when negotiators from the United States working to complete an agreement to end Iran's nuclear program, those talks taking place in the country of Oman. Now, if the negotiators can work out a deal, Iran may be able to add more oil to the global market. That could send prices lower. If they can't work out a deal, the sanctions may get

more enforced, and Iranian barrels could be taken off the market. Kelly, sending oil prices higher. Right now, everything is down, including oil and gas stocks, lower across the board. Exxon, Conoco, Chevron, and more. They're all not only down today, but with those losses, now down 12 to up to 20 percent down in just the past month. Yeah, and that's practically an outperformance. compared to some other parts of the market. The president stands on lower rates. Is he right? Should interest rates be lowered right now?

As I said, the market is pricing three or three and a half rate cuts, so they're kind of on board with that. But what are the bigger questions and implications? We'll ask the head of a major regional bank about that next. Welcome back to Power Lunch. I'm Pippa Stevens with your CNBC News update. The Vatican saying this afternoon, Pope Francis died of a stroke and subsequent irreversible heart failure.

His death was confirmed by an echo cardio, according to his death certificate. Many of the faithful gathered in Vatican City today to mourn the Pope, who died at 88 earlier this morning, with global leaders paying tribute to the pontiff. That includes President Trump, who directed all federal and state flags to fly half-staff in commemoration of the Pope. The President saying today that the Pope was a good man but does not yet know if he's going to go to the Pope's funeral.

And Chipotle announced today that it will open its first restaurant in Mexico early next year as it tries to expand internationally. Chipotle signed a development agreement with Alsea, which operates other chains in Europe and Latin America. The company says after the initial restaurant, it plans to expand to other markets in the region. Brian, back to you. All right.

Pippa Stevens, thank you very much. Well, big regional banks can be a big tell on the consumer and the macro economy. Their lending trends are often leading economic indicators. More lending can mean companies and people are more. optimistic about the economy ahead. So what are they seeing up in the Great Pacific Northwest? Brent Beardall is president and CEO of Wafed Bank and joins us now. Brent, always great to get your insight. What, if any, changes or not, are you seeing from your side of the desk?

Brian, good to be with you again. We're seeing overall the economy remains strong. Certainly there is a lot of uncertainty right now. That is the word that you hear more often than not. And a lot of people are just kind of in wait and see mode. They hear the headline. They see the headline. But it doesn't correlate to what we're seeing on the streets so far. So I think people have big projects that are kind of in the planning stages, but everybody's going to wait and see what will happen with the economy before they decide to take action.

Or people like not not taking loans. You know what, Brent, I was going to take a loan. I was going to open a business. I was going to buy home. But now I'm not because I don't know where things are going to go. That's really the only question I think that matters right now. It's true. And people are waiting to take loans.

That's the reality because they want to see what happens with the economy. And importantly, what happens with interest rates? We know there's kind of a feud going on right now between the administration and the Federal Reserve. But that feud, where are rates going to go that has people waiting on the sidelines because it matters to them. Are they going to be able to meet their debt service coverage ratios? And I'm curious, Brent, kind of more broadly. Banks are caught a bit in the middle of this whole thing, right? We talk about what's going on with the credit system. We talk about, you know, what's going on with the dollar reserve status and all these big, big questions. But you guys have to have both a business model that can deal with all of this and be in the middle of business is at a time of great uncertainty. No, it is. We do feel caught in the middle a little bit. And it's interesting to see the market's reaction. And as you both know better than almost anyone, the market can be irrational at times. And sometimes we don't trade on fundamentals. Trading today, we're trading below tangible book value. And I just scratched my head when we're solidly profitable. We just put out earnings last week. Our margin was up. Expenses were down. Bottom line, profit was up almost 20%. And

And yet we're trading at such a discount. But that's because of the trepidation in the market right now. People don't know what to believe for the future. I think that's a great point. And what do you do is a business? I mean, so I've seen some of the – I wonder about how much this business confidence shock is going to be the thing that kind of tips us into, I hope not, but into recession. Any anecdotes from the front lines about that?

No, I do, too. I worry about that. Are we talking ourselves into a recession, right? Because what we see on the front lines, people are still incredibly bullish on the economy and the prospects today. But what does it mean all these cuts to, you know, potential cuts to regulation, the staffing cuts that we're seeing in Washington, D.C. But at the front line, we're hearing all kinds of talk about optimism, but we're not yet seeing that in loan demand. So you're not seeing it. What are you seeing in loan demand?

I would say it's tepid right now. On the good news front, from a banking perspective, there's not a lot of prepayments. With rates remaining high, you're not seeing prepayments. But, you know, ideally, we would love to see loan growth, net loan growth in the 8 to 10% range. And this year, I think banks in general will be fortunate to have a low single-digit loan growth number. Yeah, and I wonder, you know, you're based out there in the West Coast, tucked up in that corner of the United States, which bizarrely had two of the richest men in the world at the time, living like a mile from each other.

Brent, but how much would say job cuts in Washington, D.C., 3,000 miles or more away from you, how much would you think they will affect your economy, your business? I know people talk about it, but does it impact the financial decision they make? I don't think the job cuts on the East Coast matter directly, but indirectly they do and perception-wise. I think the bigger question everyone has here, we are so dependent here on trade. What do the tariffs? How do the tariffs actually play out over time and what impact will that have? Yeah, and do you have a guess or any data or insight into how that might be? Obviously, the ships that are in the port right now in Vancouver or Oakland or L.A. or Long Beach,

they were sent out before the tariffs hit. It's about a three-week steam from China over. so they're not a tell. I look at them almost every day, by the way, Brent. Do you have any insight to how this may play out? You know, the insight I have is anecdotal from customers that do business. We have one customer that does a lot of trade with China. And like you said, they preordered a lot, kind of seeing it coming. And right now they're on pause. They don't want to put more containers on ships and pay the higher tariffs. They're hoping that if it wait, they're going to be able to wait it out in essence. So this is it. So you're, so sorry to jump in, Brent. So, so Kelly, you know, it's interesting.

You know, I talked to a lot of people, my wife for consumer products. I talked to a lot of people consumer products. And what they tell me is, is kind of what Austin Goolsby said yesterday, which is he thinks, see this big, we could almost see like a lot of good news the next couple of months is people buy all this stuff. Totally. Ahead of time. I'm doing a big home project. And we just bought all the appliances and we're going to store them because I'm not sure what it's going to look like in six months. I was looking at the Ford lot. They're telling me, you better buy it now before the and I'm like, I don't, I'm not really ready, but I might.

So do you think, Brent, do you think we could see that, you know, that big, the next few months look artificially good because everyone kind of races to buy all this stuff? I don't know. Yeah, no, I think there's some of that, right? We're pulling forward demand as everybody races to buy this stuff. But I think what the Fed is doing is the right thing to do. It's a wait and see, right? Let's see how the next few months play out. Let's see what actually happens with the tariffs. I think there's one thing that we've all seen with this administration, what they tell us today, may be different than what they do tomorrow or two weeks from now. Brent Beardall, he is the president and CEO of WAA Fed Bank up there in the Great Pacific Northwest. Brent,

always appreciate your insight. Thank you very much. Appreciate it. Thank you. And in the meantime, tech continues to take pounding today. The cloud computing ETF down for a third straight day with names like Salesforce, Octa, and Snowflake in the Red. We'll talk about another hard hit part of technology next on Power Lunch. Say with this. Welcome back to Power Lunch with the NASDAQ underperforming again today. Chip stocks, as we're seeing a lot of selling pressure with Nvidia down 6%. Broadcom, AMD, and Marvell all down as well. Christina Partsenevilis has more on why these stocks could be, you know, continuing to, you'd think,

well, they've got a long-term growth story. That's a place to flock to safety, but not so much. Unfortunately not, which at least makes my job interesting, but the fall today is really driven by two major factors. First, you talked about it, the ongoing anxiety around tariffs and then export control, specifically for chips, which could be scheduled as soon as May 15th. That would be the AI diffusion rule. And then we're also seeing fresh concerns about capital expenditure cuts in the tech industry.

And what I mean by that is Wells Fargo just raised a red flag over the weekend about Amazon pausing some of its data center leases. This comes despite Amazon CEO stating earlier this month that the company wasn't planning on pulling back data center construction. Amazon has not responded to CNBC just yet, but this potential slowdown really follows Microsoft's announcement just last week that they're tapping the brakes on their data center expansions. So the real impact here and why I bring it up is because that means less spending on chips and hardware across the board. And it's telling right now that Skyworks and Microchip are really the only two positive names performers today out of the 27 companies. companies in the SMH semiconductor index, which you're seeing on your screen, is down nearly 4% itself today.

InVitya, the third most actively traded stock on the NASDAQ, the volume still remains below its 30-day average. The stock really falling, you mentioned it, Kelly, down 6% after Reuters reported that Chinese tech giant Huawei is preparing to ship advanced AI chips as early as next month in China. So this comes after President Trump's new export restrictions effectively locked in video out of selling. chips to China, that would be the H-20s, and ironically, helping China's homegrown chip market. And that's what's weighing on the stock today. Right. And as much as I expressed some surprise that this is where the selling pressure is,

you could argue that the whole market has been under pressure because these parts that were formerly so strong have been weak kind of going back to last summer. Correct. And so if anything, there's been just this shift away from larger tech. You can take your reasons if it has to do with interest rates, the uncertainty around tariffs, But now even the CAP-X debate is a major concern because so many of these hardware players rely on the hyperscalers like AWS, Google, Meta to spend a lot of money and build out their AI infrastructure. If they're starting to slow down, then that's going to obviously have a trickle effect across the industry. And there's concerns going into earnings this season that the pain really won't be felt from the tariffs until the second half of this year. I know that's a story for across the board, but really comes home with the chip-sec.

and demand pull through. I'll just throw that in because you guys are just talking about it earlier. We're seeing some demand pull through. So that's people ramping up buying some hardware before tariffs. We just talked about

with appliances or cars or whatever. I think, honestly, this is the most important story in the stock market equal to tariffs, Christina. I know Kelly talked about with Deirdre in the 1 o'clock Eastern Time show. We traded on it for two years.

Suddenly we're like, eh, maybe it's going down. Christina Parts and Obolus. Thank you. You're always more than a. No. No. No. No. No.

No. Bye. Bye. Bye. Thank you. All right. Up next, your trade revealing some stocks that you might want to consider buying right now as the mega cap stocks like the market all fall. We're back after this. Welcome back. It's time for three stock lunch amid today's sell-off. And with all the concern around markets, we asked our next guest, how investors should navigate this. Joining us with rejoining us, really, is Ari Wald. He's the head of technical analysis at Oppenheimer.

Ari, good to see you. So these are supposed to be ways to navigate the market that you earlier described, which does not have a very rosy outlook for you for the next few months. One of them, the first one, is Netflix. We've heard this from a few others as well. I mean, the fact that they're up 10% year-to-date, very impressive. Do you think it still has plenty of room to go here? I do.

I think it strikes an attractive combination of kind of near-term relative strength and still long-term structural appreciation. I mean, you know, with our market comments, I think it's about being defensive, quality, you know, sticking with what's working. Netflix is working. I mean, it upheld its 200A average, it inflected higher from there, undeniable relative strength. And with that said, I don't think it's the type of defensive a stock that is likely to underperform if we do get a market rally at some point over the coming week. So based on that, I think it hugs that nice balance there. traders can trade around the 50-day average at $960. 960.

All right. We're a little above that. That one, to me, not so controversial, but the next one, micro strategy? Did we get the ticker right? This is it. Well, I was looking for an equity way to play higher Bitcoin. I think this is a play just purely on higher Bitcoin prices for here. I think an attractive diversifier.

I think what was notable was speaking first on the price of Bitcoin through this year-to-date, weakness. It upheld its fourth quarter breakout above a multi-year breakout going back to the year 2021. So very often prior resistance become support. Now we're seeing the price of Bitcoin try to reclaim its 200-day average. And so really micro strategy, very similar-looking chart. It upheld a 200-day average even. And the levels of watch, I think 343, if you get above there, that completes this little bit of a near-term bottom it's putting in and it would mark a higher high. Conversely, a breach of the 200 day, at 256 would be damaging to the trend. So that's the stop level.

We're at 314. That brings us to EOG. That's your last stock. It's out about 2% today amid the sell-off. This is your only sell out of the three names. So not all of these are kind of places investors should be looking to. This one, you think they should in a sense be running from. That's right.

Well, we're generally cautious on this bare cycle here. So let's get a sell in here. And for EOG, again, it's a call for lower. lower oil prices. Looking at the price of West Texas crude oil, that was a significant breakdown below multi-year support at $65. I think that pretends lower and there's risk to $50 for the price of oil. And with that said, I think there's vulnerability and risk in exploration and production names in particular. If you look at the share price of EOG resources, reversing lower from a multi-year topping pattern.

and really just getting going. So we see downside risk into the mid to low $80. Ideally, you like to sell it closer to $118. That was the April 4th gap down, but even at current levels, poor risk-reward balance. I don't want to say you're pounding the table, but a big word of caution there about oil prices, except for those of us who drive.

Maybe it's time for me to get the transit. They're talking low to mid-50s, potentially, in the Permian Basin. And then what does that do to production? Does that cut it off? Totally. Because it just doesn't make the economics work as much. We're going to have an oil. We're going to get somebody. All the oil CEOs are keeping their head down right now, which I get. But we'll get a private company operator on this show soon, I promise you. Looking forward to it. Eric, thanks. You call that a tease.

Ari Wald with Oppenheimer. Remember, recap every three-stock lunch using that QR code or just go to CNBC.com for more. All right, coming up, the moment you have all been waiting for. We're going to reveal the draft order for the 2025 CNBC Stocks draft, which is on Thursday. But the order of said draft, we'll be up next. Welcome back to Power Lunch. It is that time of year again. The calendar just doesn't stop. The events that captured what CNBC does best. Big name guest, the hottest stocks of an exciting market environment.

2025, CBC Stock Draft. This year we got six teams, six, battling out for the title of Stock Draft Champion. Just moments ago, the order was decided the draft order. So here are your 2025. The top spot of the draft is going to Wall Street Bound, a nonprofit organization focused on youth financial education. Second pick, former American soccer player and legend, Carly Lloyd, Bobby Flay, celebrity chef and TV a tour. He's fun. Third. And fourth, one of the stars of Bravo Southern Charm, Austin Kroll. Sebastian Menacecalco picks fifth guys,

and our former NBA star and 2021 stock draft champion, Andre Iguodala, will pick last. This order was determined at random. There you go. Tune in Thursday, 2 p.m. Eastern, watch how it unfolds. Well, the market's not unfolding well, so we're going to say goodbye for us. And be sure to tune in to our brand new show airing all across Asia.