Power Lunch - Volatile Session for Stocks 3/9/26

Episode Date: March 9, 2026

Crude Oil comes back under $100 per barrel. How should investors be navigating the market turmoil? Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A stunning turn, at least for stocks. Some indexes nearly turning higher as oil falls $25 a barrel from the highs. Welcome everybody to power lunch. As oil soared overnight, the sellers roared in. But now oil back below 100 a barrel and buyers have popped back into stocks. Crude coming off at single biggest percentage move ever in one day. But your next guest says don't lose focus. We can easily pop higher again soon, Kelly, maybe to $150. Extraordinary action there. take a look at how rising fuel costs are taking a bite out of the airline stocks again. United Delta American, all in the red. But a rally in the chip space helping lift the broader averages from the day's lows, Broadcom, Micron, and AMD among the biggest gainers.

Western Digital and Sandisk are some of the biggest movers off the lows. We'll drill down more on them coming up. All right. So we've got a lot to do this hour. Happy Monday, everybody. Let's start, though, with energy because that is the big story. Now, oil, it is still up under 4%. but wow, has it cooled off.

Crude oil is under $95 a barrel. Keep this in mind, folks. Last night, when it began trading at 6 p.m. Eastern time, oil roared to $120 a barrel. A price we have not seen since Russia's invasion of Ukraine four years ago. Global leaders talking about a potential coordinated release of emergency oil stockpiles. One telling a paper the G7 stands ready to release oil, but no final decision has been made. And there may also be another glimmer of hope out there.

Iran's foreign minister today saying that ships should go through the strait of foreign moves, quote, carefully. Now, that could be a sign that Iran would allow ships, or at least some ships, to steam through safely. And if so, that would dial back the risk at ships' face and going through the waterway, which is still almost completely empty of vessels. spite, though, the seemingly good news, your first guest says, don't get complacent. And he warns, crude could pop again if tensions re-escalate.

Joining us now is Vickas Vibetti, Global Energy Strategist at McCquery Group. Vickas, I apologize for just completely chunking your last name. I'm sure it won't be the last time I've done something like that. So apologies. Let's talk about, though, the price of oil. First off, what happened last night and what's going on right now? I mean, a $25 turn is unheard of. Yeah, absolutely.

It's unprecedented, even for as volatile as oil is. But last night, I think the market opened to an escalatory weekend, right? Iran and the U.S. and Israel, everybody who's turning it up in terms of the intensity of the kinetic activity, felt like there's no real good off-ramps, and I think the market priced that in. And we felt, to your initial comments the whole time, the market has been pretty relaxed about crude. Now, you know, it's obviously moved a lot, but we don't think it's priced in nearly enough of the actual risk and what's turning into real barrels lost already. And we think the countdown is days and maybe up to a week and a half, two weeks at the most before you are so brink. in terms of the logistics, that oil will just keep rallying, right?

Then it starts to get uncapped. Vigas, do you make anything of the possible move by the Treasury to short oil futures? Do you think some of this is because of this G7 SPR release? And I'm struck by the fact that even if they do release from the SPR, we still face this shut-in problem. According to one set of analysts I read that it could be the UAE next to shut-in production, then maybe Qatar. If those goes on for two or three more weeks, Saudis might have to do something like that.

And then once it starts to get shut down, as you know, it takes a while to come back online. So I'm surprised more of that isn't being reflected in the current price. We agree with you. We agree with the kind of the way you laid it out. We're surprised. Qatar, Iraq are likely to have to shut in production very soon, meaning the next couple of days. UAE, Kuwait, probably in the next five to ten days. And then Saudi, we think, has a little bit of ways to go, maybe 15 days.

But we're still talking days and maybe a couple of weeks. We're not talking months before shut-ins are required. Right. What do you make of this? So with all of that said, and again, the president has indicated he's not happy with the choice of the next leader. So it sounds like the situation is kind of people are digging their heels in. And yet the oil prices down. And yet we have this dialogue.

Maybe Brian can remind me the exact phrase they use here when they said that the ships could go for, has to be careful going through this straight. Proceed carefully. Proceed carefully. Thank you. Yeah. What do you make of that? Yeah, I think maybe it's just an initial set of, you know, putting an olive branch out. But it's still far too early.

I mean, I think until the kinetic activity has been iced out and, you know, everybody's comfortable that missiles won't start flying and drones, I think it'll be tough for the straight to go back to normal. And it's just a massive problem. You mentioned, you know, the Treasury getting involved with the futures market. We think that will be very difficult to actually pull off. The release of strategic reserves, it's a massive amount of oil that can be released, but not fast. You know, the problem is it's a 15 million barrel a day blockage through the strait. You could release about 2 million globally from the SPRs around the world per day. There's a rerouting going on on the west side of Saudi.

getting another two million a day. So you are chipping into the problem, but by our math, you're still going to end up with about 10 million of a deficit. And it's far too large without the straight reopening. Well, I just, so Vika, so this is it. So you're nailing oil is kind of in some weird way just math. And I'm I know I'm oversimplifying it, but we talk about counting barrels, right? And everybody's trying to figure out how short the world is now from the rate of four moves. For example, I can get to your 10 million number, but then we also know some ships have turned off their transponders. They basically turned off their lights. They made the run through. They risked life and limb, but they did it. Yeah. How clear are you on how short the world

is in oil? Because I could probably make a good case for anywhere between two and 12 million barrels a day, but that's a big gap. Yeah, that gap is so large. That's the difference between a massive rally to 150 and then something much more modest, right, like retracing this move back down into the, even the 80s, at 2 at 12. And you're right, it is a massive spread. We're of the view, based on our math, that it is closer to about 10 million once you make these adjustments, you know, rerouting, SBR, et cetera. And then the Daredevil's kind of working their way through the straight. We don't think that's going to take hold unless, there's something forward on a resolution.

Yeah, because I want to remind our audience that when Russia invaded Ukraine, oil rapidly went to what, 120, then it fell back to the mid-the-low 90s, then it went back to new highs in June. The actual highs were not hit on the act of Russia invading Ukraine. You're not saying this will happen, but you're not saying because this is impossible here as well. Yeah, you're absolutely right. It hit 125 in March, and then it hit 125 in June, Russia, Ukraine. And right now, the market is very focused on the administration's announcements coming out today. There's a lot of hope of an oil bazooka for managing this.

And we think some of it will cause oil to trade down. But we also don't think it'll address. If the straight is not reopened in a timely way, all of these other mitigation moves won't be enough. in our opinion. Vecis Vecis really appreciate your insight and your take. Thank you very much for joining us. Have a great day. Thanks for having me. And we want to hear from you. Scan that QR code that we're about to put on your screen to vote in today's power poll. The question is how high you think oil prices will climb this year, 110, 110, 1.30, 140 or higher. Do that now. We'll go ahead and reveal those results at the end

of the show. Again, just hit that QR code or visit our Power Linge page on X. Now, let's turn to the stock market reaction because remember, we were down as much as nearly 900 points on the Dow in the futures trade, but we've since clawed that back. We're down 429 on the Dow. The NASDAQ was briefly positive. Let's bring in Laffer, Tangler, CEO, and chief investment officer Nancy Tangler, who wants her son to be home by Christmas, Nancy, and I don't know. You know, you have a multi-pronged stake in what's about to happen here, but in all seriousness, how are you thinking this through? Well, you know, I've been at this, as you know, Kelly, a very long time. And And for most of my adult life, Iran has been the marginal purveyor of terror.

We've had a number of geopolitical shocks related back to the country. So on a macro level, I think, and non-market related, I think this could be very good for Middle East peace for a long time if we can finish the job. And so, you know, as I put in my notes, I'm not a warmonger. I do want my son home for Christmas. But there is a time when it's time to finish. And I think we are very close. And what the market is weighing is rhetoric from Iran, which is not really in a very strong position, position militarily. And then rhetoric from our president, who does seem to have the upper hand from a military standpoint.

Nancy, I know we're not geopolitical. But you have such a good kind of real investor's view of things. And your oldest is a Navy pilot in case people are wondering why we keep mentioning this. But when you say that we're close to the finish, a lot of us are looking at this new, leader that they've chosen and thinking this seems worse. You know, you go from having the 90-year-old in charge to the 50-year-old who's now furious, more of a hardliner, who we didn't destroy as part of these initial strikes, who was able to come out of a selection process by the very group that we were purportedly going to destroy or change. So I'm not seeing sort of the forward momentum.

Yeah, well, I don't think we have it yet. I think that, but I think the market would be off a lot more and oil would be up a lot more if investors believed that this was this was the end of the story. We're not finished. They're in a very difficult position as to the ability to defend themselves. I know they can create chaos that that is the plan, but I think we will find a way to solve this solution or solve the problem. And I don't really like saying anything other than that because it sounds pretty absolute. But I don't think the story is even. even close to over. This is what you would have expected if you were looking back at history. It usually doesn't get better initially. It gets worse. C.S. Lewis once said, how monotonously alike are all

dictators? And I think that's what we're seeing. It's just a younger, as you point out, version with now an axe to grind a bigger axe. So I think, you know, this could go on for a few weeks, but remembering, too, that oil averaged, what was averaging in the 70s and 80s during the Biden administration, but during 2022, it peaked and spiked at 124 barrel. Energy is a much lower cost as a percent of every household in America and a percent of GDP than it has been in recent years and certainly half of what it was in the 70s. So I think, you know, we take a breath, we go, we think, we watch it very carefully, and then we focus on fundamentals, and that's what we're doing at Laffertangler. Yeah, these are all important points and you want to be optimistic.

We want to be optimistic, particularly on a Monday. And I read that comment by the Iranian foreign minister that ships have to pass carefully as actually a positive because he's saying ships could pass. He's not saying if you try to pass, we're going to try to blow you out of the water. It was nothing like that. And so I took it and I think the market reacted as well in a positive way. So, Nancy, because it's Monday, we're hoping for peace. We're hoping for better outcomes for everybody. the best case scenario here? That were done in a couple of weeks, I think, Brian. And I read it the same way you did.

You know, words matter, as we say here at Laffer Tanger. And that was the word pass. So I think investors need to hunker down. We're not very high, we're very far off the highs. There's still a lot of very good news in the economy that is separate from energy-related companies. So, of course, yeah, the Carnival Cruise lines, the airlines, they're getting clobbered, but they always do in this scenario.

And that's why you want to own a diversified portfolio, have exposure to the areas that you think are going to prosper. We still like the AI trade. You know, we've been talking about Broadcom on your air forever as the poor man's invidia. It is one of our largest holdings. We continue to like it. And there's a whole host of names in technology and outside of technology that will be able to continue to grow. And I don't think the consumer yet is going to go for cover. There is still some savings, not a ton.

But for the most part, Americans are working. We'll leave it on that more constructive note. Nancy, thanks so much for the, you know, exploring the issues and obviously the investments. Thanks, Nancy Tangler, Blaffertangler, Investments. All right, so coming up, we'll stay on the story, but we're going to tweak it a bit. Could higher energy costs hit the all-important AI trade? We'll tie the two together. Next.

It is not just oil moving higher lately. Natural gas up about 4% of the past week is the Iran war enters day 10. While local gas is not directly imported from the Middle East, of course, about 20% of global LNG does pass through, yes, the Strait of Hormuz, and Qatar Energy, one of the largest natural gas producers in the world, if not the largest, is currently. offline because of strikes on its primary facility. The U.S. is the world's largest producer and exporter of natural gas. Sounded countries all over the world, and with the production problems in the Persian Gulf, it makes American gas even more valuable. That's why stocks like LNG and VG have gone up lately.

But so far, overall, prices have remained pretty calm. But at this or some other event, were to send the price of natural gas higher, could that hurt America's buildout, the AI and data centers? Joining us out of Connect the Dots. Stephen Bird, he is Global Head of Dramatic and Sustainability Research at Morgan Stanley. Welcomeing you on set. Pleasure. Stephen, great to see you in person.

Thank you. Is there a price point, this one or another one? Yes. Because the AI revolution's powered literally halfway by natural gas. Is there a price point that kills that? I think we can absorb higher gas prices because the cost of power is a small part of the overall data center economics or put more positively, the value of the intelligence that we're essentially producing from these data centers is so incredibly high that we can absorb higher gas prices. What we cannot absorb, though, is risk of loss of supply.

And so what we're finding is security of supply, security of making sure in all circumstances that these data centers will always have the power they need. That turns out to be a big deal. And on top of that, you want to make sure you don't impact anyone else's energy costs. That's become a huge political issue. I think that it's the indirect fault where you could see. say, and again, we're so fortunate. We have to back, we are so fortunate that our nat gas price is still so low. But I got my heating bell or whatever it was that we got less. He was a heating and electric? The numbers here, if it goes any higher, even 5, 10, 15% higher from here because

of what's going on in Iran, not because of the day, they will, we will look for someone to get mad at. One hundred percent. The data centers and it slows their development. Totally agree. When we talk to the hyperscalers and folks in the power space, more and more, they're going to go completely off-grid so they can go to politicians and say, look, we understand there's so much sensitivity. We're going to completely disconnect so we have no impact. And I think we might even go further where they provide one-way power, meaning there's power plants at the data center. And when the grid needs it, that data center will voluntarily provide additional power to the grid to lower prices. I think we're going to go one-up and try to lower prices.

I think that's great. Is there any reason that that's not a positive? No. Everyone wins. It takes time. There's some more engineering work that has to be done, but that's where we're headed. That's the new table stakes is making sure you do not hurt anyone else and then ultimately provide a real benefit to the... So we have three Virginians around this town.

Okay. You know, I'm a part-time. I was born in California, but went to high school and college of Virginia. You part-time live there. So Loudoun County, the capital data centers, here's what's interesting. Loudoun County's property taxes have gone down. Loudoun County's electricity costs have gone down. I'm not singing the praises of utilities.

Believe me, I put a data center in my backyard if my property taxes would go down. Would you really? Would you actually do that? I mean, it seems kind of quiet. Okay, quiet. Yeah, I don't know. But the point is, this whole demonization of data centers

for power costs, the data, it's a little hard to find it all the time. Well, that's right. The studies would say for Loudoun, for example, this has been a massive economic miracle for Loudon. If you went back 10, 15 years, that was a very poor county. My family used to have some land there. We sold our land a little early.

These days, you can sell your land for a lot of money. But the schools... I played Loudoun County and Loudoun Valley High Schools in football. Us too. We always lost in La Crosse. One was black and red. The other one was green and yellow, I think. Yes.

Yeah, I mean, this has been a game changer for the county. But the politics in Virginia are changing. There's more opposition to incremental data center growth. That's a concern. And I see that spreading to so many states, especially up here. Did you see the NBC poll where they, you know, asked a variety of topics, political parties, people of interest. The three lowest ranked were AI, one of the political parties, and Iran.

In other words, AI is so unpopular in this country, even as people are obviously using it quite a long. Absolutely, both power prices, but also jobs. Jobs are showing up as a big question mark as well. So this is why the data center community has got to come forward with an approach that shows a net benefit. They have a PR problem. I think we all see that. they need to change their business model. They're working to do that. The good news is there's enough economics to make that work for everybody.

Trying to flip the script. We were trying to be positive with Nancy Tangler a few minutes ago. And not positive about what's going on, but bullish, I guess, on this country. And if we see data centers struck, like we saw one in the Middle East recently, hit by an errant missile or not an errand. I mean, it was intentionally targeted. You just wonder if that's bullish for the United States because we are blessed. geographically, we're kind of not near anybody else, and we got a, I think, a ton, I was going to say

something else, a lot of natural gas. We do. I mean, I think as we go through 2026, intelligence is going to become the ultimate commodity, and every nation is going to want to control that as carefully as they can. So that means controlling your data centers, controlling who gets the chips. That does argue for greater presence of data centers in the United States, but keep in mind, every nation is going to try to do the same thing. Quick question for you. So obviously China has an issue with getting its hands. People are talking about how much they can pivot to renewables.

And in this country as well, when we talk about the Mera project in Texas, they're going to start doing AI data centers instead of Bitcoin or along with it. They're doing a lot of renewables down there as well. Where are we? Because the energy kind of transition happened. Now we have these price spikes. And then we took a step back from moving into solar, for instance. But where are we on the deployment, both in China and the U.S.,

of alternative? Yeah, it's a good question. China has an abundance of every kind of power. And that's a real advantage compared to the United States. They have an abundance of cheap, available power. Their grid is fairly robust. In the U.S., we have a shortage of both the electrons and the grid that we need. So we need both.

Now, Team Trump is trying to eliminate barriers to get more power onto the grid and provide more electricity. So that is good. Renewables alone won't do it, though. We need renewables, but we also need a lot of natural gas. I'd say broadly the permitting process in the U.S. just takes longer than China. It just takes time to get that infrastructure in place.

That's why, again, I think the data center community will just take control of their own destiny, build their own mini-grids that are completely separated. I think that's the direction we're headed. Who wins then? I'd say anybody in the infrastructure space, if you have a power bottleneck, a labor bottleneck, equipment bottleneck, the value of deb bottlenecking is going to go up.

As the value of AI goes up because these tools get more capable, we want to eliminate every bottleneck. And what we've noticed is everybody who owns a bottleneck is getting paid more and more to debondon, to spend more money to provide more supply. There was a double upgrade of GEVernova today, where the analyst, Rothschild, who downgraded them in the fall on evaluation, had to throw in the towel and say basically, it doesn't matter. Absolutely. Because the demand is so strong.

The upside here is still so significant. Well, well said, and G. Renova is in the middle of all of this. Anything you think about an energy, G. G. They're also an off-grid. We also like some of the off-grid specialists like Bloom Energy, Solaris, those kinds of names. We think we'll do really well.

All right. Stephen, come back anytime. Thank you. Stephen Byrd with Morgan Stanley. Meantime, the Iran War has changed the calculus for a whole lot in terms of the market and the economy. Steve Leasman joins us on the other side of the break with the ripple effects that could have on the Fed. Welcome back. If nothing else, the oil price shock does create a bit higher risk of recession and the two-year yield hitting its highest level since November.

The street's now pricing out a second rate cut this year. Let's bring in Steve Leesman. Steve, explain all of these moving pieces, if you will. We have higher recession odds, but also higher interest rates. Yeah, well, there's a bunch of things going on. Interest rates are subject to issues of how much supply might be coming with the cost of the war, as well as, again, the issue that we had been talking about before the war, which is returning that tariff revenue. And then also how much treasuries are seen as the risk off trade.

There's some question about that at this point. But more importantly, what's happening, I think, is some sense that the Fed may be girting for a wave of inflation here. And maybe right now backing out rate cuts. And if you look at the probabilities in the market right now, Kelly, what you'll see is they have indeed come down. You can see all those yellow bars are before the attack on Iran and now blue bars are after. So all the probabilities have come down. Basically, if you take July, 53 percent being a flip of a coin, more confidence now in that first cut coming in September. And you can see right now there is no second cut built in this year so far.

Even December, I think, doesn't show it quite, or maybe shows a little bit more. But right now, December, there is no second cut built in. So the market has backed out, essentially 25 basis points of rate cuts here. More as a wait and see approached by the Fed initially to the spike in oil prices, not necessarily hiking here. How do you expect, I mean, we're still ways off from this, but how might a Warsh talk about this, do you think? You know, I think Kevin Warsh has to talk about it.

Let me go through the history of this. It's a piece I'm working on for tomorrow, so I know a little bit about it now. But before, say the 1980s, the Fed was pretty automatic about raising interest rates eventually into oil price shocks. After that, it became what's called, and you'll remember this from the papers that you read,

the economic papers, Kelly, state-dependent. In other words, what's going to? on at the time will dictate more what's happening. But I'll tell you the fear right now. The fear right now is the Fed looked through tariffs and now it's going to look through oil price shocks. Well, maybe you do so much looking through and all of a sudden the Fed become, or people become concerned the Fed is not serious about the target rate. We got inflation expectations this morning. In fact, I think I brought along a chart here that shows how one year ahead inflation expectations on the part of the public respond to gasoline prices.

and boy, it's a pretty good fit. So that's the data we got today, the 3%. That's pretty good. It's still high, but at least it was stable. But then you look at the longer run chart of how gasoline prices and inflation expectations work together. There you go.

They go up when prices of gasoline goes up. Now, the key for the Fed is the three in the five year. Those are less sensitive, but they're not insensitive, Kelly, to the longer run outlook for gasoline and oil prices. So people, if those inflation, expectation to remain under control, the Fed has the flexibility to hold rates. If not, the Fed will need to react. Steve, for now, thanks. Appreciate it. Our Steve placement. All right, coming up, what to do with your money right now? Your next guest helps manage $2 trillion. And he'll join

us with his advice for clients next. All right, moments ago, the oil market closed, and this is amazing. Okay, oil closed up 4%. Is it 94%? 48. It's not cheap. Nobody's saying oil is cheap. But oil was $120. What? 10 hours ago? Last night when oil began trading, it soared 35%. The greatest single move, one-day move, percentage-wise, in the history of modern oil trading, it fell back $25 per barrel. A $50-60 round trip for the price of crude oil in eight, 12 hours? I mean, it's really wild. You'd think if nothing else,

that volatility would have the markets more freaked out than they are right now. Stocks are trading lower across the board, but the Dow's down 306 points right now, and the NASDAQ is positive, so I shouldn't say across the board, NASDAQ's been fluctuating back and forth. Is the market underappreciating the threat here

from some of these geopolitical risks? Former White House senior advisor, Amos Hochstein, we talked to him just a week or two ago. He was on Squawk Box this morning, and here's what he said. Oil prices are priced, today, I think still even maybe a little bit complacently, this is the biggest shortage and energy crisis we've had in global history. Joining us on set to react now is Jose Mania. He's the global

head of BNY's investments and wealth, which oversees, cool, two trillion or so. And client assets, welcome to you. So you have to stay cool in situations like this. Just watching the turnarounds that we're seeing over the past a day or so, what do you do as an asset manager? Yeah, look, on one end, And we tell our clients, like, you can't act on emotion in kind of looking at your portfolio. You can't act even sometimes even in your own politics. Yet I'll go back to how you kind of started the opening there on, this is amazing. You know, I feel like every week we're waking up and you're like, wow. Like events we've never seen before are happening.

Events we've never seen before, things that kind of defy what I learned in school in terms of the way these things are supposed to work. Yet I think the conversation we've been having with our clients is a continuation, right? had these conversations that were largely academic around, look, you should prepare for more volatility. You should prepare maybe for inflation showing up. It hasn't been here for better half of two decades. And all these things now that were academic, it's an urgency now, right? I just got back from visiting with many of our top RIA clients as well as our private wealth clients as well. And a lot of the questions in their mind is up, but where do we go from here? Right. Is this idea around the AI story and the sell-off, the idea around private credit and alternatives?

and people are trying to find, like, what is the actual truth? Sometimes I feel like I'm part of a social media kind of thing in terms of the news that we're hearing. And look, the reality is it goes back to being well diversified. It goes back to thinking about your outcomes and the solutions that you want to get to. It's not panicking and saying, what's the best advice people get?

It's the one usually where their advisors tell them, like, no, no, don't sell now. But there is a reality of, if you look at the sell-off in AI, for example, I think that's massive validation from the market telling you, oh, we believe this is real. This is going to be disruptive. But the market doesn't know who are going to be the winners and losers.

I look and say it's a spending game now, right? If you believe that this is disruptive, well, the companies who are spending on this are likely going to be the ones better off. Same thing with private credit. You're hearing a lot about it. Let's pack it up. Let's pack it up.

Let's say three of us are hanging out on a Friday night. That'd be fun, by the way. Friday night we're hanging out. We're having a couple cocktails. And I'm like, you know, Jose, I'm going to give you a world where we go to war with Iran, oil spikes 20 bucks a barrel, inflation risks are now back on the table. Oh, private credit to your point, some of the biggest Wall Street firms are seeing their stock down 10 and 20 percent. Banks are a little bit shaky on that news as well,

and yet the stock market is going to be 4 percent, 4 percent from its all-time eye. You'd be like, I'm going to have what he's having. But that's where we are. But does that mean that the stock market is going to follow their lead lower, which feels like it's, or does it mean that those areas of overreaction, you know, that you can just kind of ignore it? I think what it means that, look, if we were having that beer, there's kind of the pontificating of what's kind of fun to chat, but if you're kind of getting serious about someone's money, it's to say, hey, look, I'm managing my kids' account. I'm going to keep that inequities throughout this tenor.

Managing my parents' money, I'm going to have a different view. Maybe they're in guaranteed income. But the reality is all this is volatility. So again, what matters now is it didn't really matter what manager you picked, you know, in the past. Everything kind of went up. Now it's going to matter. Because why? What are you doing differently from others, do you think?

I think for us, it's always been around solutions and kind of looking at portfolios from that construction, going back to fundamentals. Again, the AI story is a good one. I just talked to an analyst recently. They're like, look, we don't really know who's going to win, but we're going to go back to fundamentals. and who are the management teams we think are credible here and have been there through that story. B&Y had a 20 billion plus revenue record-breaking year. It's been 19% of that reinvesting in things like technology.

So all of a sudden, the spend as to what's going to hear, these things absolutely matter. How you think about your outcomes, they matter. It's hard to say today I'm going to go, okay, here's where you've got to go home and do in your portfolio right now. Hopefully you had that conversation already, and you're getting access to these particular markets. But it's interesting to hear you say you're pretty bullish about technology.

And that's been a part of the market that is supportive. I mean, again, whatever's happening in software and however that shakes out, that broadly that's an area that's been holding us up. I'm bullish on two things here, right? One, absolutely technology is part of the story. The reality is AI is without question part of the story. So one end, how do I play that is, again, the firms who can invest in it are likely going to be the winners. This whole story around diversification alternatives, and you're like, yeah, there's a liquidity need to put

Why did that grow? The concept of that was, if a rainy day comes, you're going to want some of those correlations in your portfolio. The rainy day is here, but the market is still trying to figure out how to place that illiquidity. Well, to your point, it's raining oil in Tehran. And yet the markets are 4% off the highs. We're at war with Iran. Massive country. I'm not going to say they don't care, but we're not down much.

Treating it blithely. No, they're looking past these things. I mean, obviously, it's hard to look past oil. And you're seeing the reaction there. But the actual underlying geopolitical issues. And I'm like, yeah, the market's kind of grown ready to look past those things. And remember, we've come into this from largely a pretty healthy economic, global economic environment, right? Yeah.

Jose, like you said, these are the times that separate the men from the boys, the wheat from the chaff, whatever analogy you want to use. They are trying times. But we appreciate you join us to talk about it. Thanks. Jose Manaya, Global Head of B&Y Investments and Wealth. All right. Let's step out of business for a second and get over to Julie. abortion with a CNBC news update.

Thanks, Brian. AI startup Anthropics sue the Pentagon and other federal agencies today after the Trump administration designated it a supply chain risk, calling the move unprecedented and unlawful. Anthropic is the first ever U.S. company to be hit with that designation.

After seeking to impose guardrails on the Pentagon over the use of its AI products for mass surveillance or autonomous weapons, the Pentagon has yet to comment on the suit. Federal investigators reportedly believe that hackers tied to the Chinese government are responsible for a recent cyber intrusion into an internal FBI network. The Wall Street Journal reports that the scope and severity of the attack

aren't known yet, but it's centered on an unclassified system involved in domestic surveillance. One of the so-called fixers in a nationwide point-shaving scandal in college basketball pleaded guilty today to wire fraud and bribery charges. Jalen Smith, who trained players for professional scouting combines was charged with 25 others for allegedly recruiting more than a dozen players to try to fix games as recently as last season. Brian, back over to you. All right, Julie Borsden, Julia, thank you very much. All right, coming up, one of the most pressing questions of the moment, what can the Trump administration actually do about energy and Iran? Welcome back, and here's another look at oil prices, which have reversed to about $95 a barrel.

Crazy. To see them up only 4% after hitting almost $120 last night is pretty crazy. Our next guest says President Trump is running out of tools to fight rising fuel prices if oil and shipping disruptions last beyond another week or two. Let's bring in Tobin Marcus. He's head of U.S. policy and politics at Wolf. And Tobin, welcome for starters. Do you know why we've seen this big move lower today? Well, I think that the G7 statement, that they stand ready to take whatever action is necessary, including a coordinated SPR or is certainly part of it. You know, there also seem to be a little touch of panic in the price action Sunday night, which is obviously a very violent move upwards. So I think not completely shocking to see an intraday reversal, even absent a policy story to help drive that lower.

Yeah. So again, looking towards that G7 move and, you know, what might come from, again, releasing barrels from the SPR makes sense. It helped in 2022. But the problems now are a little bit different because even if we release barrels, you've got to get the straight reopened so we don't have more Middle East supply shut off. That said, apparently the price. president has a few other options that might be under consideration, including restricting exports, intervening in futures. We've heard about maybe shorting oil futures and things like that, waiving certain taxes, lifting the Jones Act. Talk us through those. Yeah, so Reuters had a good report about possible options under consideration that you just ran

through. Most of these, I think, are non-needle movers. Some of them, I think, are very small, very clearly symbolic, like the Jones Act waiver. That's a thing they can do, but that is very much not near the top of the list of problems that we have right now. Others would require congressional authorization. So a gas tax holiday certainly would have an impact on the U.S. consumer in a very direct mechanical way, but that's not something that the Treasury Department can just decide to do on its own. And so that leaves the things like the SPR, like this future's idea, which we look at as a sort of a spin on an SPR release that probably makes less sense than just doing a straight-ahead coordinated SPR release. Which, you know, I think,

would help. I mean, they clearly would help address some of the problem, but I don't think they're going to get us through a sustained period of this trade being totally shut. It closed. No, but it's not. I mean, and I think Tobin, you know, my viewers and my ex-followers can disagree,

but they know I hate the word closed when it comes to straight of four moves because I also know that we've been talking about it for a week. Some ships have been getting through, Iranian ships, Chinese ships, or they're just turning off their transponders of their lights and they're risking life and limb, but they are still doing.

Do we have any idea what the real situation is with oil flows around the world? Yeah, so I think your phrase that they're risking life and limb is exactly the issue. It is a thing they can do. The Iranians did not mind the strait in advance. Everyone we've talked to in terms of military experts has been clear. Like, they have not fully militarily closed the strait. And to your point, some ships have gone through, others have been struck. I think the question is going to be, can the actions that the administration can take around the strait in terms of the state?

the strait in terms of this reinsurance scheme and the notion of military experts, will that actually allay the concerns that maritime operators have about getting through? I think probably the answer is no, unless you can actually suppress Iranian drone activity in the region, which thus far we've not been able to. It's harder to go after those than the ballistic missiles because they're smaller. What options, Tobin, as politicians gather with the midterms looming, What options do you think they have in terms of messaging this and how might it go down? Again, we have the refund checks, tax refund checks. The consumer is in pretty good shape.

The economy's in pretty good shape. But this does present obviously huge political challenge. Yeah. I think the political challenge is very real and very hard to talk one's way out of. To your point, we also think that consumers are in good shape. We don't think that we're going into a recession. But the economic vibes and the sort of voter sentiment about the economy has nevertheless been very bad. before getting into this crisis, now presumably we'll start getting worse.

Approval of the war itself has been very sharply polarized on partisan lines, as most things are in American life. You know, support from Republicans is in the 85% range, a little bit underwater with independence, strongly underwater with Democrats. I think that's likely to persist. You know, probably gets worse if we start to see more significant economic disruptions as a result of this. So I think the administration's bet is that they can get this done soon enough that the consequences

will be transient and voters won't hold it against him in November, and time will tell if that's going to play out. Tobin, thanks. Appreciate your time today. Tobin Marcus with Wolf. Coming up, the market movers of the day, including this one here that is soaring as it revives an old partnership. Take a guess and we'll reveal it after the break. All right, remarkable day in the markets. We talked about it. Well off our lows for the stock averages. Oil finished down 25 bucks from its high. Finished up only 4%. But what about that? the markets. What's going on underneath the surface? Dominic Chu, and Dom, I would say you've seen everything because you ran money professionally as well. But I got to imagine that, even with your

just general cynicism, I'm joking, is the nicest guy in the world, that this is a day for the record books in some ways. So I would say yes and no at the same time. Record books on the crude oil side of things and everything else. But overall markets, we've seen this kind of downside volatility that's resolved itself a lot over the course of a trading debt. Okay, last night, oil is up $25 a barrel, and markets are collapsing, and I'm thinking I've got to call Dom Chukas, we're going to end down $2,000 on the Dow. And we didn't, just like every other day over the past week. It's interesting. But, I mean, if you talk about some of the moves that we are seeing, stock, individually speaking-wise, the worst-performing sector on the day so far is not anything tied directly to the conflict, although in some ways it is.

It's financials, big banks in particular rising oil prices, fear of a possible economic slowdown. They're hitting names like J.P. Morgan Chase, B of A, Citigroup, Well, Goldman Sachs to get the idea. Watch the economic narrative around banks. Next up, you got a stock that's bucking the overall trend. It's the mystery chart that we showed you right before the break. Shares of Hems and Hers Health surging to the tune of right now just about 41 percent, and that's off the best levels of the day.

The online health and pharmacy company struck a deal with drug giant Novo Nordist to sell its popular GLP weight loss drugs. The deal also ends a lawsuit between two companies around the selling of copycat versions of Novo's Wagoe weight loss drug. And we're going to end on shares of GEVernova, also gaining ground in the down tape, thanks in part to a double upgrade to buy from sell over at Wattschild and Company. Redburn, they expect better guidance from the power generation company emit stronger demand for AI use cases and gas powered turbine engines, amongst other tailwinds.

It's also being added to the large-cap S&P 500 index, so keep an eye on those. And by the way, for those and other top calls of the day, just head over to CnBC.com slash pro. Subscribers get all the detail around those big upgrades and downgrades, guys. I'll send things back over to you. All right. Dom, two, thanks. You got it. More power lunch. Our poll reveal after the break.

Welcome back. So what do people think of the oil price from here? Let's reveal the results of our power poll today. We asked you how high that price will climb and the majority of you. Look at this, Brian. Almost half of those who just responded. This is just in the past hour. Think 140 or higher.

The next category, 120. That got a quarter of the votes and then a split between 1.30 and 1-10. I didn't think it would go above $100 a barrel. I put that in a poll. And last night, I was like, you're wrong, you're wrong. And I said, I was wrong, but now I'm thinking I'm right. But what, right about the containment of this conflict? I think more ships are going through the Strait of Hormuz than we think.

I think that's the most important thing you've said this entire hour, because we're all working from the premise of if the Strait of Hormuz is closed, then, what if it's not? It's never been closed. I don't like that. It's one of my trigger words. I don't like to work close that I don't. You know what I mean?

I don't like it. What are you up to tomorrow? Tomorrow, RBC Global Financials Conference, very rare interview. With David McKay, the CEO of RBC, the biggest bank in Canada. Doesn't do a lot of TV. Really looking forward to speaking with him and more. Excellent timing for that as well. Thank you all for watching Power Lunch.

And closing bell starts right now.