>> game in town. i like amd here. i like the partnership with aws for gpus and cpus. watch this stock. >> where's yours? jason just took my final. you guys both picked amd amd strong momentum. >> right now. i will see. stephen's taiwan semi and raise them in an. >> taiwan semis within 1.5% of hitting a new high. >> so nvidia needs to get to one 5313 i think is the number to watch today. it's not that far away. it's up more than 3% and we'll track that over the final stretch. i'll see you on the bell. >> thank you very much, scott. the president speaking at nato. the fed chair speaking in washington. and the markets are shooting for new highs. welcome to the exchange i'm kelly evans. we're mixed somewhat on the investing front as investors watch for that 6144 number on the s&p the prior all time high were at 6091 right now just 50 points shy of that level. and

big tech is breaking out again. nasdaq is the only one in the green this hour as the nasdaq 100 hits another all time high. nvidia shares well above their prior closing high. almost at the intraday. they're up 3.3%. advanced micro arm in the green today as well. and the fed chair saying tariff driven inflation remains a big question. so rates are on hold as the president once again says the chair is quote terrible. the ten year yield 430 today. speaking of president trump, he just wrapped up his speech at nato, addressing everything from the iran bombing to putin to defense spending and tariffs. and that's where we begin today. megan costello has all the headlines from his wide ranging news conference. >> megan kelly, wide ranging is the right word for it. much of the focus was on iran, and especially on this question of just how much damage was done to iran's nuclear sites after saturday's strikes by the u.s. the president maintains throughout this press conference that they were completely obliterated. and that's in spite of some preliminary intel assessments from the u.s.

defense department. that damage was limited. trump also says that he does now believe that the war is over between israel and iran, and he was asked whether he's interested in restarting negotiations with iran towards a nuclear deal. he said he was not. he said he doesn't feel that a written agreement on iran not securing a nuclear weapon is necessary. >> look, we're going to talk to them next week with iran. we may sign an agreement. i don't know. to me, i don't think it's that necessary. i mean, they had a war. they fought. now they're going back to their world. i don't care if i have an agreement or not. >> trump later suggested that he could potentially be in favor of tightening sanctions against iran. he said that, quote, if they're going to sell oil, they're going to sell oil. then kelly, the only trade mentioned or tariffs mentioned was when he said that trump said that he would make spain pay twice as much in any trade deal as punishment for spain not agreeing to nato's new 5% target for defense spending. the president can't exactly do that

against spain. the eu is negotiating their deal with the u.s. as an entire block, but it could be a sticking point for those talks. just another thorn in the side. kelly, one more thing to have to negotiate. >> you know, i thought that about spain and the way that he's linking the two. i thought that was interesting. and does it tell us anything about what might be happening as we have. is it a week, two weeks until the tariff pause should be over? and i guess theoretically we'd be going back to those levels from april. >> that's exactly right. july 9th is that deadline. it's about two weeks from now. what it tells us is just how many issues are on the table with all of these countries. this is an example with the eu, but we've heard from various countries that so many things are wrapped up into these negotiations, often unrelated to trade, such as spain's defense spending. what we know so far is that kelly, the white house has given us now a number of things that they say they've been working on instead of these trade agreements. first, it was the dustup with china that required everyone to go to london. then it was most recently the middle east and everything going on there. and now the negotiations with congress on that spending bill. they say the deals are

coming after all of these things are going to be finished. as we get closer and closer to the deadline, it could mean that they extend it. and if they don't, then of course, the tariffs do go up, as you said, to those rates that we saw in april. >> all right megan, for now. thanks megan cassella in washington. the president also taking another swing at the fed chair on the nato stage as powell wrapped up his second day of testimony on the hill. steve liesman brings the key moments. and steve, again, it's interesting to watch rates and to some extent the market amid this. so 430 on the ten year. i guess just the level where they're not pricing in a july rate cut at this point, even though a lot of people in the market still think that maybe that one should be live. >> no, you're spot on, kelly. that probability of a july cut up a little bit at 25%, but still not the odds on bet there. powell. of course, today coming under republican criticism from both sides of the atlantic. you had senators in washington and president trump at the hague, both with words for the chair. here's ohio senator bernie moreno telling the fed chair

that inflation is down and the fed should cut. >> you are costing this government $400 billion a year by refusing to lower interest rates. nobody in this chamber has that kind of power to have a $400 billion impact on this economy, on our deficit. and i just think that you should consider whether you're really looking at this from a fiscal lens or a political lens, because you just don't like tariffs. >> president trump at the hague, as you might expect, used harsher language. >> i know within 3 or 4 people who are going to pick. i mean, he goes out pretty soon, fortunately, because i think he's terrible. i think he's a very stupid person, actually. >> powell declined today, as he has over two days of testimony to respond to the political attacks and stuck to his insistence the fed needed to wait and see how much tariffs boost inflation. >> the ultimate question of it is how much of it does show up in inflation. and honestly, it's

very hard to predict that in advance. >> powell and the fed now wait for jobs and inflation data. and inflation bump in june could lower the rate cut temperature, but weakness in the job market could allow the president to blame powell rather than administration policy. so kelly, hold on. it's still more to come. >> did we ever get an answer about the legality or the logistics of the president appointing himself fed chair? steve. >> no, the fed chair declined to answer that, said that he was not going to do that. i think when you read the legislation, it says the president shall appoint or something along those lines. so it it doesn't necessarily say he can't, but it's certainly not it would appear, the intention of the legislation in that regard. and just real quick, kelly, i would point out if we could look at those probabilities one more time, 25% on july. remember, it was around ten before waller spoke to us on friday. that was buttressed by comments from

bowman. and then kind of goolsbee came along and said, hey, maybe i could be convinced, depending on what happens with the jobs report. but more confidence in september and december right there. and i would note that the stock market doesn't seem to care that july is not necessarily the odds on bet. it's come back a very long way with the futures market pricing in the idea that there won't be a cut as soon as july. but you know what? we get to ask this question of goolsbee tomorrow. we're going to have him on squawk box in the morning. >> i know the waller position is also so interesting, and i'm glad you mentioned it, because he's got the respect and the ear of the markets who kind of read what he's saying as as someone who could end up being nominated by the president if he went in a more conventional direction. right. but if the if the president really wanted to undermine powell, don't you think he would even even talk about, you know, great speech by waller the other day or waller's right, or, you know, someone in his staff would say something like that. maybe they wouldn't be so explicit. but of course, we've heard nothing like that

yet. >> no. and i am interested. i'm sorry that senator or congressman representative didn't ask about this. waller bases his thinking on a paper that's been put out by the fed. maybe we can talk about it another time, which says that it has been it has made sense over time to look through one time price shocks or things like tariffs and oil. we talked about that earlier this week. if you remember that oil price shocks, for example, have rarely shown up at least since 1991. in core inflation, they bump up the headline, but they don't really cause spikes in core inflation. you do have a lot of help right now coming from the service side. as the fed chair said. look my read kelly is i think the fed chair will cut. just wants a couple more months of data here. i don't think he's pointing you away from that. i just think he's kind of cool. expectations for july. >> all right steve thanks again. appreciate it. our steve liesman, as you mentioned, chicago fed president austin b is exclusive tomorrow on squawk box at 8:30 a.m. eastern time. turning back to the markets now where the s&p really close to

its all time high. once again, my next guest says he was surprised how quickly the market has rebounded since the tariff announcement, and warns it doesn't make sense to be back here. joining us is vahan janjigian, the chief investment officer at greenwich wealth management, behind. welcome to you. what doesn't add up for you here? >> hi, kelly. so in my opinion, the market has bounced back largely because president trump has backed off on the tariffs. so i think that's justified to some extent. but the fact that we're all the way back to all time highs doesn't make sense simply because the tariffs are not going away. we're going to end up with tariffs. we're still negotiating exactly what they're going to be. they're not going to be as bad as initially thought. so that makes sense. why the market would come back a little bit. but we're still going to end up with tariffs. and we're going to end up in a situation where, you know, part of that cost of the tariffs might be eaten by suppliers in other countries, but not all of it. you know, some of it is

going to be eaten by us importers and some of it is going to be passed on to consumers. so there are two things we know for sure is that corporate profit margins will not be as large as they otherwise would be, and prices will not be as low as they otherwise would be. so for that reason, it doesn't make sense to me that the market would have bounced back to where it was before president trump even got into office. >> fair enough. and we all you can look at the revenue number and go, okay, that's that's coming out of somewhere to your point. but what about those who would say that the administration's idea here is to use the it's not a corporate tax cut, but the permanent expensing provision in the big beautiful bill that that itself is a form of stimulus for corporate america, that it can offset some of the tariff hit to margins and otherwise. >> yeah, i think there's some there's some truth to that. but you know we haven't really seen that yet. and you know, until we have further evidence that that's exactly what's going to happen, i would say that the market is being premature in

jumping all the way back to all time highs. so if we had gained, you know, regained 50% of the loss or 70% of the loss, i would have said, okay, this makes sense, but it makes me very nervous that we're all the way back to where we were. we're at, you know, virtually at all time highs. you know, we still have a situation with with massive amounts of debt. you know, you were talking with steve earlier about the fed, whether they should be cutting interest rates or not. you know, on that issue, i actually do agree with president trump. i do believe that an interest rate cut is justified at this point because inflation is still pretty low. so i think the fed should be cutting rates not by, you know, 200 basis points, as president trump suggested, but i think a 25% cut right now would be completely justified. however, you know, president trump wants to see lower interest rates to make the debt more affordable. i don't think that's a solution to our debt problem in the long

run. you know, we really need to address that on the fiscal side. >> well, not least if they cut in the long end goes up again like it did in the fall, which would undermine the whole point. but let me just ask you one more question. i mean, is it possible that the s&p that its profit margins are going to be relatively fine because by definition, these companies are the leaders in many of their fields? look at the russell 2000. it's still down 12% from its highs. and you have to imagine that those would be the players where they might feel more margin pressure or struggle more with tariffs or have more, you know, competitive inability in that situation. so i just wonder if we're picking kind of the creme de la creme here. and the s&p goes, yeah, our companies can largely absorb this. >> yeah i think that's true. i think large companies can absorb the tariffs. but even for those large companies, any company that does any amount of importing their profit margins will not be as high as they otherwise would have been without tariffs. >> yeah, ibm is one of your picks murphy oil i definitely want to get a couple of those particular names in there. people are wondering where you'd be laying your bets. ibm is such

an incredible story. a lot of these old tech names ibm, oracle, micron's not old tech, but i mean, look at its performance this year. where else behind? i mean, where do you feel strong conviction about picking names you think are going to perform very well? >> well, in the long run, i think technology is the place to be, obviously, because that's where the growth is. i think, you know, ai is going to be a big driver of earnings in the future. same with cybersecurity, same with quantum computing. you know, i think these are areas that are long term investors should look at. i do have some concerns about many of those stocks being overvalued. you know, i often like to compare meta to apple. these are two, you know, very large tech, very large cap tech companies. one of them virtually imports nothing. and the other one is very dependent on on imports. and we'll get hit by the tariffs. i do like energy. as you mentioned, murphy oil is one of my holdings. i like energy primarily because it's so out of favor right now. murphy was a very generous dividend, and i think it's worth sitting on and

waiting for oil prices to rebound. >> but a lot of investors might be in your boat here. you said you got in in the 30s and 40s. so at this point you're like, okay, it's done so poorly. it might be, you know, kind of gotten a little bit out of it. now, a little bit back in, we have. >> actually actually kelly, i got out in the 30s and 40s i got it i trimmed in the 30s and 40s. and now i am thinking about getting back in again. >> got it, got it. so in the context now we might have a deal between shell and bp who knows. but more consolidation in the space. what do you tell energy investors who got aa5 day spike in oil prices? and that was pretty much it. and otherwise the sector's been languishing. >> yeah. it's another sign of complacency. the fact that oil prices have already come back down. you know, president trump says that the war between iran and israel is over. you know, that's that might be true. i don't know, but there still is a lot of risk. i don't think iran would actually close the strait of hormuz because they're very dependent on, on oil exports themselves. so i think the oil market is fine for now, but over

the long run, you know, supply and demand often get out of balance. and we'll see that happen again. you know, oil prices are near lows right now. pretty soon they'll be near highs. and a stock like murphy oil is very correlated with the price of oil. >> all right vahan, appreciate checking in with you today. thanks for your time. thank you. with greenwich wealth management coming up nvidia is back to an all time high. pretty much if it closes here it'd be a closing high at least as the street's turning even more bullish on the stock. one analyst says the company has a secret weapon in the chip wars that gives them a massive edge. we'll tell you what it is next. plus, the s&p less than a percent away from its record high. but one strategist sees a challenging earnings season ahead once again. we'll talk about why. and this is all happening as such actually kind of moving towards session lows for the dow down 154 points a third of a percent sell off this hour. we'll see if the nasdaq can stay in the green. we're back after this. >> this is the exchange on cnbc.

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>> welcome back. even with the market weakening somewhat, this is a big deal. nvidia just hit a new all time intraday high just a couple of moments ago. you're watching it right here. we're up almost 4% now today 14% year to

date. now the prior high was on jan sixth i believe we're already above the closing high. and we just hit a higher intraday price than we've ever seen for the stock, which granted has largely been moving sideways since last summer. but wall street is turning more bullish, with one firm seeing another 65% upside from here. kristina partsinevelos has the details. christina. >> you know, kelly, you just mentioned it just shy of its all time high. it would actually be 153 13. if it closes at that or above that, then you're seeing an all time high close. and it's also the best performer among the mag seven today and has just edged above microsoft in terms of market cap. and this really comes after nvidia's annual stockholders meeting, which wrapped up just less than an hour ago. ceo jensen huang was speaking. he made some pretty bold statements. he said that, quote, they stopped thinking of themselves as a chip company long ago and that they're an ai infrastructure and compute platform. he also said the next big wave is physical. i basically robots that can interact with the real world. jensen huang calling this the

next multi trillion dollar industry. so he didn't say anything brand new on the call to shareholders. but definitely very bullish. wall street analysts also clearly buying into the hype. loop capital just increased their price target from $175 a share to 250, arguing the ai spending wave is so massive that even these sky high numbers that all of these hyperscalers are spending on gpus, etc. just look reasonable. their key point in the report is that hyperscalers are planning to shift away from about 15% gpu compute today. that's a part of their whole stack to around 50 to 60% by 2028, which could alone create $900 billion in demand. then you have bank of america also out with a note saying, i could drive $1 trillion in spending by 2030. so very similar to loup, with data center systems taking a much larger share of it budgets. they also highlighted how nvidia's nvlink technology, which really helps multiple gpus just talk to each other, communicate transfer data. and it's what they're saying is the secret weapon in

the ai chip wars, giving nvidia a massive edge over competitors like amd. and so we are seeing shares of nvidia just continue to climb higher. >> kelly wild 153 and change the new high watermark. christina. thanks. let's bring in the analyst behind that bank of america note vivek arya he's b of a senior analyst. and vivek, you've long maintained that this security is still undervalued. as incredible as it's run, especially prior to last year was what powers it higher from here. you know, when we look at i, our work suggests that the spe on ai is only about 5% of all it spend today. you know, it spending is about a $5 trillion industry. and if i look at how much is being deployed in ai infrastructure this year, it's about 250 billion. so only 5% of that. and we believe that over time it could be more than twice of that. so we think the spending on ai is going to be over $1 trillion by the end of this decade. and this is not

just by cloud companies. you know, we thinkhe benefits are going to spread to consumers, to enterprises. and more importantly, as we have seen in the last few weeks across sovereign infrastructure, right, every country, every region wants to be self-sufficient in deploying their own ai infrastructure in their own language, their own culture, with their own data sets. so that's why we think this is a multiyear opportunity. this is not a 1 or 2 year cycle. now, what does it take to be successful in this industry as as i think you saw in the previous segment, also that it is not just a semiconductor industry, that this is a industry that requires expertise across silicon, across hardware, across software, across developers. it requires scale, across it requires incumbency in a lot of these deployments. and we think nvidia is the best position to take advantage of this growth. and then finally, the technology itself is leverageable to many other new markets, such as robotics and physical ai. >> right. exactly. that could then even grow that even more.

so, one thing i just wanted to highlight in your note is that on the one hand, this is about how big still the total spend on ai could be. and obviously all the stocks in this ecosystem have benefited this year. on the other hand, you think people are expecting nvidia to lose more share than it actually will. so if it does maintain something more like 60, 70, 80% market share, which is great for nvidia shares, who is it that that might be to the detriment of in the longer run. right. like at some point, are some of these competitors rallies going to run out because nvidia, as you're describing it, is putting together such a more competitive ecosystem? >> sure. i think the first point is that this is a rising tide. it's going to benefit many companies. nvidia and broadcom have been our two favorites, but we think benefits will span across to amd, to marvell, to memory companies, to semi-cap companies to foundries. so this is a rising tide. the reason nvidia i think, grabs kind of

the lion's share of a lot of this is because they have the widest breadth of products, right, that addresses a lot of these different trends. so that's one aspect of it. the second aspect, if you say, well, how can one company maintain such a strong market share? because that is what history tells us about semiconductors, that the incumbent, you know, always manages to maintain or expand their market share as long as they are executing extremely well, as long as they are able to maintain scale. and i mean, keep in mind, and intel is still selling seven out of ten cpus, despite the issues that they have had over the last 4 or 5 years. because semiconductors is an industry with very high entry barriers, and so far, you know, there is no sign nvidia's execution continues to be very strong. so in other words, evidence of a new share. >> if we kind of take that narrative and run with it. and to his credit, jensen huang is doing everything he can to maintain that leadership. is this an argument against jumping into amd for a catch up trade?

is it an argument? a little bit of caution, maybe with intel even given everything you're describing? in other words, if the strong are going to get stronger, then who are the ones that are not able to catch up necessarily? >> sure. so we think nvidia maintains 80% of a market. that still leaves 20% of a market that can more than double or triple over time, right? so we think that provides plenty of opportunity to others. every name is different. you know, amd is a combination of data center. it's a combination of what they're doing in gaming, combination of what they're doing across with the intel in terms of gaining more share in those markets and embedded markets. you know, marvell has a slightly different profile, so every company has a slightly different profile. but i do think it's a rising tide. and, you know, the evidence for that is if you look at a number of these prominent cloud companies over the last 5 to 10 years, every one of them found a way to participate in the growth of adoption of cloud services, whether it was an e-commerce, whether it was in streaming, whether it was in social, they all found their own niches in

that market. so it didn't really come at the detriment. i think it really came at the expansion of that pie. and that's, i think the big call that the spi is going to expand to such an extent that it will actually rise many votes. how many votes. >> appreciate you putting the numbers to it. quick final question is what about china? right. they have a huge dog in this fight. it's national security. it's all the rest of it. and we are trying to be smart about how much we let nvidia products into china. if we constrain their market share there, maybe china grows its own organically. how do you see that evolving? >> sure. i think china is an important market for these companies, but it's interesting that when we look at our model, you know, china data center is effectively zero for nvidia and many of its peers. right? over the last 8 to 10 years, china's spending in cloud has actually been less than 10% of the total global cloud spending. so, you know, china to a good extent was restricted. i mean, it's not a

good thing that these companies can't sell to china. but i do think that there are many opportunities outside of china that they can participate in. you know, for example, look at all the new projects that are coming up in the middle east. you know, middle east was never a spender when it came to infrastructure during the internet age. and now they are going to be a massive spender when it comes to spending. and i think that spending is going to be far greater than what china would ever be spending on ai infrastructure. >> that's fascinating. vivek, always a pleasure. thank you for your time and it's good to have you on this afternoon. vivek arya with bank of america. micron does report after the bell and the ceo will be on squawk on the street tomorrow morning to discuss those results. the stock has absolutely been on fire this year. their high speed memory chips work right alongside nvidia in those blackwell units. that will be around 9:15 a.m. eastern time. so you definitely don't want to miss it. and coming up, nvidia may have just hit a fresh all time intraday high. it's only up a cool 84% off its april low. but the ai trade as you just heard is far broader than just one name. why? we may be seeing a generational shift in fact more on that is

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away. well, the s&p is up 9% since the end of april. right now we're tracking for the best may-june stretch since 1997, when we were up 10.5%. and that was the only other double digit gain we've ever had in these months, going back to 1950. with that in mind, let's get a closer look at some of today's biggest movers with dom chu. >> all right. so kelly, we're going to start off with the biggest decliner on the s&p 500 today a counter-trend if you will. that's paychex. those shares are down roughly 8.5% right now after the provider of payroll processing and human resource management systems reported quarterly profits that met expectations on revenues that ever so slightly missed estimates. now paychex is full year earnings and revenue forecast were both well ahead of expectations. but some of the downside may be coming from more caution around the company's revenue growth. if you strip out the effects of its big acquisition of competitor paycor, those shares are now roughly 13% below the record highs they hit earlier this month. and remember, tune in tonight on mad money. jim cramer

is going to be talking all about that paycheck story later on this evening on mad money. meanwhile, shares of aerovironment are flying high, up over 20% after the maker of drones and robotic systems posted a quarterly earnings and revenue beat and gave a more upbeat full year forecast than some analyst estimates. cnbc's jim cramer called it the palantir of hardware earlier this morning on squawk on the street. so aerovironment up 23%. and we'll end with a check on shares of coinbase, which continued their near-term surge higher given broader tailwinds for cryptocurrency. also more interest in stablecoin products. now new this morning, you've got analysts at bernstein keeping their outperform rating and raising their target price a whopping $200 to $510 a share from 310. they call coinbase the more misunderstood company in their crypto coverage universe, with a broad underappreciation of their growth potential. now for more on that. another top calls of the day, just head over to cnbc.com pro subscribers. get all the detail and context

around those notable analyst actions. i'll send things back over. >> to you. look at that spike. just an unbelievable chart. absolutely huge move for coinbase. tom thanks. coming up two big bellwethers who are in the red today after warning about the consumer and the macro environment. is it a broader red flag for earnings season. we'll talk about that ahead as some of the names hitting new all time highs today include netflix, broadcom, microsoft, crowdstrike and ibm. we're back right after this. >> we empower those who act, those who see the correlation between predictability and probability. those who manage risk by anticipating each movement, flawless execution, timing and accuracy. identify the goal. match power with the goal. match power with precision. reach new heights. when i started walton goggins goggle glasses, i didn't know how to turn all this fancy pretty-ness

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it. >> every day i'm checking the markets throughout the trading session, working the phones, talking to sources to share insights, information and all of the details that you need to make money. >> closing bell overtime for easter and streaming on cnbc plus. >> welcome back to the exchange. we've seen companies beat on earnings so far as earnings season kind of early gets underway. guidance though continues to be the trend to watch, with fedex and general mills the most recent companies, giving investors some pause. fedex pulling its full year earnings 2026 guidance for the first time in more than 13 years. they're saying the macro environment remains uncertain. general mills warning sales could fall, saying, quote, amid this uncertainty, we expect consumers to remain cautious and continue seeking value. general mills shares are at a five year low. my next guest says this upcoming earnings season could be one of the most challenging yet. joining us is brian reynolds, the chief market strategist at reynolds strategy. brian, great to see you. it's been a while and i don't want to

fully put words in your mouth unless i'm saying this correctly, but you're pretty bullish on the market broadly speaking. so you just think that the earnings season itself is going to disappoint and underwhelm explain all of the data points that you're watching. >> bullish on financial engineering, which drives stock prices higher. but the fundamentals are challenging largely because of tariffs. corporate profits were due. taxes were due last week. that happens in the middle of the last month of every quarter. and so the numbers came in and they were down 18%. there hasn't been a drop since the start of the pandemic. now that's not a disaster for the s&p 500 because it's probably concentrated in the smaller companies that can't avoid tariffs. larger companies can lay off people, which the tech companies have done. they can trim their capital spending, which you're seeing some of the companies lowering their guidance do, and they're big enough that they can access the credit market, borrow money to jack their stock price up. and so you've got that dichotomy. the real issue here to me is

that this is going to cut federal budget inflows. the administration bought tariffs would add would decrease the deficit. instead, we just wiped out all the gains from tariffs through corporate profits declined. that means the budget deficit is going to be bigger than thought. and that's going to add to near-term volatility before stocks push on to new highs. >> absolutely i mean it's a great great great point. so a couple of follow up questions. one would be are we sure that the early read on this or the quarterly read is, you know, necessarily going to hold for the rest of the year? could we see a, you know, a rebound or a turnaround, especially as mentioned, maybe something comes through on the budget front that helps companies with their profits. i mean, it's vahan janjigian earlier this hour was literally saying this very thing that he doesn't think stock prices should be back to all time highs because there is this big tariff tax effectively. and now your data is backing that up, right? >> yes. and i think the budget is pretty much set. so that's in the market. what's not in the

market is what happens to tariffs. because who knows what this administration is going to do over the next 2 to 3 months to tariffs. they've had a history of throwing a big tariff numbers and then backtracking. so that could be more volatility. but eventually by the end of summer that should be behind us. we'll pretty much know whether there's going to be a lot of tariffs or a little, little bit of tariffs. and if there's tariffs, that's going to mean stocks are more expensive because profits will be down. retail sales also dropped this month because consumers have finite incomes. they can't offset the inflation that comes from tariffs. that means fundamentally stocks are more expensive. and that forces investors into difficult choices, because mechanically, these stock buybacks driven by the credit market, exci i wrote about last week was a prime example of a company junky company coming to market and people buying its debt and that support stock prices that should eventually take stock prices to new highs. institutions are really bearish. they hit they

hit a record for short selling as a percent of shares last month. if we get to a new high and go about 100 points higher on the s&p, that means margin clerks on wall street are going to force those institutions to cover their shorts. that pushes stock prices up even more eventually later this year. i think that means stocks get overheated if they get to one standard deviation above trend, which is, let's call it 6000 506,600 on the s&p 500. i want to be a seller into those higher prices. >> do you think, brian, quickly that, you know, stock buybacks have have led to permanently higher stock market valuations. so basically it means that everybody's right. those who think the market is overvalued, they're right. those who think the market's going to keep going up. they're right. you know this has just become that important of a factor. >> it's been over the last since the financial crisis in oh eight. it's been the leading cause of higher stock prices that's ingrained in the market. and if you look at the ratio of earnings yields, which is the flip side of pe ratios for stocks, you compare that to junk

yields. they're about fairly valued. so there's ammunition for both. and what we found is that buybacks lag stock price moves. they slowed down this winter when stocks hit new highs. they accelerated after the panic of april. and now they're taking stocks to new highs. eventually they will peter out for a little while. the short covering will run its course. and we'll have a correction. but probably not till later this year. >> well i think. it's yeah fascinating. i was just going to say, you know, your point about earnings season really kicks off in a couple of weeks time. and you just think we should be braced for some bad news all around. i mean this is not is it sector by sector or just kind of broadly. >> it's sector by sector. if you're if a company is exposed to tariffs, they're going to suffer disproportionately rather than a domestic based producer. but overall i think that creates some turbulence in the market over the summer. eventually that gets resolved to the upside. all right. because of buybacks. >> brian really appreciate it. thanks for joining us today. thanks, kelly. brian reynolds with reynolds strategy. coming

up the smh etf. that's for the semis. it's up nearly 15% so far this month nvidia just hit a fresh high today amd and micron are the best performers both up about 30% in june. that's got one wall street firm asking if one wall street firm asking if chips indeed are the gina costa... looking simply stunning... what's this? she's opening her fidelity app.... to buy that stock... with no fees or commissions... because what does gina got? gina's got the look. that never gets old. talk about easier investing. place and updates it automatically. how easy is that? >> the two most powerful words in the world that we know are what if? and today thousands of organizations are saying what if? with the power to act on

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cnbc.com. >> now the nasdaq 100 hitting a record intraday high, boosted by the semis. the chip space nvidia also hitting a fresh intraday high. that's today's leader. but the recent tech rebound shows a lot of breadth beyond just that name. deirdre bosa has more in today's tech check. deirdre i also love this whole like chips of the new oil thing because a lot of us might go no no, no, don't say that because oil's been terrible lately. we don't want to, you know, to go quite that way. right? but i mean, that's the oil now. so chips are taking its place. and just as oil once powered industrial growth semiconductors, they're now fueling the ai boom. so right now the market is placing its bets accordingly. and let me sum it up with this chart. this

is melissa's eye chart of the week. they call it semis as the new oil. so here's the reasoning. back in 1980, energy peaked at around 30% of the s&p today. semis and semi caps. this is the companies that make the machines and tools to produce chips. they make up 12%. nvidia and broadcom alone they account for three quarters of that. and this all raises the question what if we are still early market action suggests that that might be the case. the semi trade has been broadening out with names like amd micron marvell arm surging over the past month outperforming even nvidia and broadcom. and that helps explain why this semi rally feels different. it's not just about chips for chips sake, it's about the infrastructure to run ai at scale. so in other words, compute demand that's powered by training, inference and storage. some of the other themes have been renewed as well. sovereign ai as the geopolitical overhang in the middle east, at least in the eyes of markets, has been somewhat blunted. another overhang that's been softened, if not resolved, is the china threat. remember earlier this

year, deep 6r1 model rattled the ai trade triggered a broad sell off in the ai trade tech stocks. they have now climbed back from those levels. so this feels like a new phase of that trade that we've become familiar with over the last few years. right. an important part of what's happened here is that this concern that ai investment was going to peter out, or even just kind of drop at the margin, seems to have not at all happened or be taking place this year. right? as well as sort of it became cheaper or more efficient to actually run ai. right. and it turns out that inference demand makes up for a lot of that pretraining demand that we saw in the early years of the ai boom. something that i will mention, kelly, we'll talk more about this yesterday, though, is potential crack in this trade. could be, you know, some of the cold water that's been thrown on reasoning models, they're supposed to take huge amounts of inference compute. and like that apple paper we talked about a few weeks ago. throwing a little bit of skepticism at that at that idea.

we got to do that tomorrow because i still don't understand the inferencing, the reasoning part. like when i ask it a question about inferencing and reasoning part of that, or you know what i'm saying, i need a i need an explainer. are we? it will be perfect for you tomorrow. we just released our latest tech check take which dives into that. exactly. so we'll bring you that for sure. all right deirdre thanks deirdre bosa coming up. nearly every name in the homebuilder etf. the itb is lower today. why. new home sales in may posted their biggest drop in nearly three years. we'll talk about why and what it will take to get buyers and sellers off the sidelines next. >> tech check is sponsored by comcast business. powering possibilities. >> is this your dream of retirement? how about this sweet deal? i like fishing or is this a little more your style? retiring wealth isn't a guarantee, it's a goal. it's easy when markets are going up. but what about when they're not? that's why you need this call

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and make official. start your will at trust and will.com and make it count. >> welcome back. ugly picture for new home sales this morning. hitting a seven month low. market doesn't like it. diana olick has the numbers and the why. diana. yeah, kelly, you. >> stole my word. i was going to say ugly report. no question. sales of newly built homes dropped nearly 14% in may. from april, the street was looking for a 6% decline. this count is based on signed contracts, so people out shopping in may, when mortgage rates remain stubbornly high. the average on a 30 year fixed mortgage started may at 6.83%, rose steadily to just over 7%, then settled back a

teensy bit to 6.95% by the end of the month. that, according to mortgage news daily now, nationally, the median price of a new home sold in may was $426,600, an increase of 3% year over year. slower sales, though, resulted in a significant bump higher in supply. we ended may with a 9.8 month supply, 15% higher than may of last year. the last time supply was that high was only very briefly in the summer of 2022, which of course was when the fed first started raising interest rates post pandemic. but before that, supply hadn't been this high consistently since 2009. you remember that was the subprime mortgage crisis and the great recession. so big surprise stocks of the big builders are not loving this. the home building etf itb down a little under 2% on the day that breaks a four day win streak, which was really the best rally since january. we do know that mortgage applications for new homes in may were down 4.5% from

the year before. but more recently, if we look at total mortgage demand from homebuyers last week, it was basically flat week to week, little higher than a year ago. but that's really just because there's so much more. existing home supply on the market does not speak to anything in the new home market, and we just really have not seen that demand come any higher. kelly. >> it's got to mean lower prices, right? >> well, you would think it is starting to affect home prices on the existing home side. we saw that in the case-shiller report earlier this week. home prices are still higher, but it's shrinking very small gains. and in some markets we're actually seeing prices going lower year over year. as for new homes, some of the builders, you know, we heard the reports from lennar was cutting prices. kb home prices were a little higher. it's again kind of a mix shift though, as in when you look at that median, what part of the market is really selling the most? it is the slightly higher end than the lower end, so it's skewing those prices higher. but remember, builders are doing all kinds of incentives and still buying down those mortgage rates in order to get buyers in.

>> all right diana, appreciate it for now diana olick. chair powell telling congress the best thing the fed can do for housing is to restore price stability. my next guest says that requires sellers accepting that the last few years of aspirational pricing are over, and real estate is shifting to a buyer's market. joining me now is beth freedman, ceo of brown, harris, stevens and best. before we even get into that, what are the vibes in new york city where, if i'm not mistaken, you're sitting right now after mamdani's surprising win yesterday, what in the world is that going to mean for real estate prices? >> yeah. hi, kelly. it's so nice to see you. you know, people are stressed out. it's really not a good message. you know, mondaini, i believe that he has good intentions, but his ideas are not practical. you know, you can't have a rent freeze. some of the things that he's suggesting make no sense at all. we have this big challenge with affordability in new york city. we have issues of safety and, you know, nothing is for free. we're a city that needs the business community, you know, needs to work with state and

local to get things done. and i think this is going to be a huge lift for us. and so my feeling is that we really have to think about how we can work together and collaborate. and just an example of this is, you know, as you probably know, that the fair act was passed on june 11th, that was city council was the writer of that bill. and because of that bill, and we testified and warned them that this would happen, rents have gone up 15%, you know. >> in two weeks. >> yeah, yeah. landlords have raised their rent. >> the fair act. >> the fair act is the intention behind it was to try to put the onus on whoever is advertising the listing to pay the broker's fee. so now landlords are kind of putting that into the rent. so they're raising the rent. and we try to explain to city council, as we testified, that this was going to create a big problem. rents were going to go up and it was not a good idea. but, you know, no one would listen to us. and i think. >> yes, florida, i hear you know, there are yeah. i mean, at

some point, what are you going to do if. okay, so if someone said, listen, housing is the biggest issue for whoever young voters or primary voters or what have you. what is the real solution in new york city? what is the answer? >> i mean, first of all, rents have gone up and now even buying a home has become out of reach. and so i think what needs to happen is that we have to figure out ways to work together, city and state and businesses so that we can build and do things like the city of yes was a good thing, but we have to work in that direction. like when. >> more supply. >> more supply. but also it's if you think about it today, like someone who it's out of reach for someone to be able to buy a home today, the first time home buyers are now near 40 years old. right. and so it's become unattainable, the american dream. and i think, you know, people are unwilling to have discussions. landlords are not the bad guys. many landlords are trying to pay their bills and feed their families, too. and i

would like to stop demonizing landlords and the rich and start working together as a group and as a community so we can accomplish good for the city. and i think that's the biggest challenge here in new york city today is that. >> people want they want the sound bite, you know, of, hey, we're going to lower home prices 100%. >> but what. but but that doesn't rent freezes and just the sound bite is not getting anything done. it's a fairy tale. they're selling a dream. reality and practicality matter. and we know that because we're running businesses. >> right? i know, and i wonder if it makes it even worse quickly than best. do you think prices are going to fall just because the market dynamics are changing quickly? >> i think that they will. i think they're going to have to come down. they're going to have to adjust. it is moving into a buyer's market. rents are really high. i think we're going to have to do that because inflation is still elevated, rates are still high and prices are high. this is perhaps one of the most challenging real estate markets that we have seen. and so i think they're going to have

to adjust. something's got to give. >> yeah i absolutely best we'll continue the conversation. thanks for coming on today. best friedman. that's it for the exchange. i'll go join brian exchange. i'll go join brian sullivan (traffic noises) (♪♪) the road to opportunity. is often the road overlooked. (♪♪) at enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. because we believe the more ways we all have to move forward. the further we'll all go. franklin templeton, your trusted partner for what's ahead. >> at ag1, one of our values is

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