Closing bell 8/19/26

Kelly, thanks so much. Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This make or break hour begins with the break in yields, apparently just what the doctor ordered for stocks, at least somewhat. There's the scorecard with 60 to go in regulation. We are green across the board for the major averages. There's the 10-year. That's certainly part of the story. We need to show you the 30-year, too, because that's where the boil has been. Not exactly a high conviction move in the equity market today, but nonetheless, we're positive. There's the 30-year. I think that really tells the story of where we've been and today where we are. Several breakout stories we are following this hour. Marvell's option with Google sending that name surging today better than 8%. How about Moderna and Merck after the positive trial results of their skin cancer treatment? Moderna up. Look at that. Better than 140%, almost 150%. That's got to be around the highs of the day. Merck, no slouch either. Having a really nice day as well. Targets move after earnings we're following. Not too shabby, up near 5.5%. We'll have reports on all of that coming up in just a bit. We do begin, though, with our talk of the tape. The state of the markets according to one of the world's top investors, BlackRock's Rick Reeder. He's chief investment officer of fixed income and head of the global allocation team. BlackRock, he is with me once again. Welcome. Back. Thanks, sir. Thanks for having me. What a great time to have you given what's been happening in the bond market, which at the long end feels like it's been screaming a little bit. What do you make of where yields were and what the Treasury did today? Listen, I mean, it has been the back end of the yield curves felt a bit untethered recently. I mean, for a couple of reasons. Obviously, you had some elevated inflation. You know, there was some discussion about could the Fed, could Chair Warsh have done more? Listen, I think really what's pushed rates. Higher is you have an incredible amount of financing that's coming and not only for the AI paper, the AI paper that is just going to keep coming. OK, and that's pressured supply into the market. I think that is the big the big thing. Listen, what the secretary did today, you know, I think after doing the intervention on the yen, there is it's pretty clear they have a secretary of treasury that's keeping an eye on long end interest rates. I think markets have to pay attention to that. Is it is it a huge move? It's not a huge move. The intervention, the intervention wasn't a huge move. Yeah. But. Clearly, there is a disposition there about, gosh, we have our eye on these rates and don't want them to get out of control. There's a difference between a huge move and a huge statement. A hundred percent. This was the latter. A hundred percent. And, you know, there's optics, optics markets look at optics. They look at we could debate. Did you just cap a level on the long end of the curve? I'm not sure that that's right. But I think you have there's more firepower at Treasury. I quite frankly think there's more firepower in terms of how you manage. There's a yield curve sitting at the Federal Reserve. I think that is going to Jackson Hole. That's going to be interesting to see how they address that. But listen, I think that I think the secretary is investigating a lot of things and saying, you know, how do I keep rated a reasonable level given all the supply that's going to come? Well, I mean, you've got the election coming up, too, and the midterms that has to be somewhere in the calculus, no matter how much they want to talk about that. So how much difference will this move actually make if it's more a statement than a big move? And and and for how long will it make any bit of difference at the long end? So when you when you take the actual real duration impact, it's not that big relative the amount of supply that's coming. But I think what it puts in people's minds, I saw the intervention, I saw this. It does put a cap. And when people, you know, there's been a big trade. I mean, a lot of people have curve steepeners on. A lot of people have short the back end on. A lot of people have, by the way, long equities, short long bonds. And I think there was a state. But I'm like, be careful in how large you put that trade on. And I think you saw today a bit of scramble. Gosh, I got to manage some of that risk. And I think that, you know, it's important that markets move on sentiment. They move on, like trying to interpret where we're going. And I think that I think the statement was significant when you talked about, you know, maybe some of the reasons why we've backed up at the long end. You said I think your words were could could chair worse have done more. I'm assuming you're alluding to in his communication strategy. His guidance, if you will. Yeah. Is there a price to pay in the bond market for the lack thereof of communication? Is that in part at play here? You know, I don't I don't really don't depends on what how you handle that. You know, there's been a lot of stories about disastrous performance. I actually don't agree with that at all. I actually think he laid out a pragmatic. We've got task forces to look at these things. There are some very complex issues. Are we restrictive on rate? We're clearly restrictive on housing. We're not restrictive. We're not going to hamper AI capex spend. Inflation is complex. What's driving inflation today? Service is driving inflation. We don't have any goods inflation to speak about. These are all complex issues that he's going to take some time. He's going to take a look at it. So I don't think it was. There is one thing that I think the chair needs to do over the coming weeks and maybe Jackson Hole, maybe at the next FOMC meeting. What are the metrics you're looking at? What is your reaction function going to be? If you saw this sort of data, and by the way, it doesn't have to just be core PCE. I actually think it's incredibly healthy. We're getting away from just one singular number, which can be skewed like it's been recently, and look at the broad picture of inflation. But give us some data in terms of what are the metrics you're going to look at. And then the markets can, which I think is the right thing, the markets could price to that. Okay, so you're saying he does need to do a little bit more than he's given you and other market participants and the markets in general to this point. That doesn't mean we need more forward guidance. That doesn't mean the dot plot is an effective mechanism. In fact, you look at over time, a lot of the communication we've gotten over the last few years hasn't been effective or hasn't been right in terms of where the world is going. The dot plot, I quite frankly don't find terribly useful, but the markets tend to move to it, even though they move around in terms of what they're going to do. So this idea we need more forward guidance, we need more forward guidance, I'm not a real believer in that. I just think we need to know the reaction function. I just think we need to know what are you looking at? What is important to you today? Is it more inflation? Is it more employment? Are you looking at, by the way, there's a series of indicators in employment. Are you looking at demand, supply? Are you looking at a whole series of different indicators? To get some clarity on that, then markets can do their job in interpreting it and putting a price on that. See, all people playing the game want to know from the referee is what the rules of the road, generally speaking, are, and we'll play the game as you allow us to. He says he wants the markets to play the ball, not the referee. Now, the complicating factor, I guess, in all this is when the commissioner steps in, like the Treasury Secretary did today, and has an impact on what rates do. What does somebody like you do if you're supposed to play the ball, not the referee, but then somebody else steps into the administration of the game? So, first of all, I think the referee is a bit of a misnomer. The Federal Reserve is very much in the business of influencing what the interest rate structure is going to look like in this country. So, they're not an innocent bystander, not a referee on a game that's going on. So, I think that is, we have to interpret what the Fed is going to do. From my perspective, I actually think that if you don't have a prescriptive, we're going to follow core PC, and the markets have to look at, the way I think Chair Warsh described it well, the right side of the decimal place. The market's becoming maniacal about tenths of a percent. Or less than that. I think it's overdone. Being focused on, gosh, are we in general price stability today so the Fed doesn't have to move the rate around constantly? Listen, core CPI today, three-month moving average is 1.6. The six-month moving average is 2.4. That's okay. I mean, that's price stability. Part of why I think, from my perspective, I like the belly of the yield curve. Which you've liked. For a fairly consistent period of time. I don't know whether that's stubborn or boring. It's been okay. I mean, you know, the back end hasn't been a fulfilling -- it's certainly not a hedge. It certainly hasn't generated any price return. But I like the belly. It carries well. You have a lot of room, if you believe, which I believe, the Fed will start to move to cuts next year. You do? Yeah, I do. Do you think the first move that they make, that Chair Warsh makes, is a cut, not a hike? I do. So, listen, I think they're going to be on hold for a period of time. I think the thing you have to wrestle with, and the Chair's going to have to wrestle with, you've got a committee that's hawkish. I think putting on a big interest rate trade today, I think, for us, is very hard. I'd rather just sit in income, clip coupon, where am I most protected on the yield curve. I like the five-year point because I like the forwards there. The front end is okay as well. I just like clip coupon. And then if I can clip coupon and marry that to an equity portfolio and just keep consistent return, that's a better trade to me than, like, trying to pick, you know, the back end of the yield curve. Well, I was going to say that. Did the best opportunity at the long end just disappear? That's a tough question. If you said to me, where is the direction of travel, given the amount of supply that still has to come to the market, I still think there's probably a migration higher in interest rates. I think we slowed the volatility of that. One of the ways you can actually take advantage of this in the markets, I like to sell rate volatility. And so, boy, would we add interest rates if they moved up another 40, 50 basis points? Well, you can put that on today. And that's where I think is a better expression. saying, gosh, at this interest rate, I'm going to take a shot. I just don't find it that compelling. How are you gaming out Jackson Hole, given everything that's been going on? So, you know, you got the feeling at the last meeting that the chair wasn't all that, you know, disappointed or uncomfortable with the fact that rates had been backing up a little bit. It was almost helping him do a job that they didn't really have to do themselves. Agreed. So now that that has come off the boil a little bit, the last two jobs numbers weren't great. Provision's not great either. Retail sales kind of weak. Okay. How's that set up then for Jackson Hole? So I would say a couple of things. First of all, I mean, I think from a policy perspective, you're talking about the last few months of inflation have been soft. I mean, one six, we talked about three months, maybe average of one six. Employment, we're hiring 20,000 people a month on average for the last three months. Net of health care, it's negative. Listen, I don't like the rate story. I don't think it'll be interesting. Hopefully in Jackson Hole, what we're going to hear more of is, here's what I'm, looking at, here's the calculus that is, we're going to transition the Fed to, here are all the more sophisticated indicators we're going to use going forward. Here is, so you think about in the world of big data, the amount of forward-looking data you can get from AI, from all the empirical data that comes through the system. Like I'd love to hear, I'd love to learn more about that. You know, from a positioning point of view, I mean, still think equities are going to be, are going to be pretty good shape here. And then, you know, we're just building income and running that trade. A couple more things about the Fed. Because we just got the minutes before you came on. And the chair talked about six meetings instead of eight. Yeah. Does that matter to you? It, you know, I think we're going to a better place when the chair says, if I have something important to say, I'm going to say it. I think moving to six meetings, by the way, they've also talked about over time doing a couple of meetings that are deep economic and out of the boy. I mean, maybe I'm a bit of a geek about that, but I'd love to hear like some real sophisticated analysis of how the Fed's thinking about economic conditions. So. If those meetings are meaningful and they're really sophisticated analyses of data, I think that could be fantastic. So fewer but richer is, is, is okay. A hundred percent. And, and by the way, I am a believer markets should price to the data. And I do think that is a significant indicator for the Fed. And I, so I mean, I applaud that as long as we understand, gosh, they're doing deep work. They're doing forward looking analysis. And then we can understand how they're going to react to that. So was it only a matter of time, do you think, before the equity market was going to pay closer attention to the moving rates? It feels like that's got there, right? We started to get to that point. Treasury is not naive to that factor either, right? So something has happened that I think is significant. First of all, we've talked about for years. Remember, it's, you know, the tenure gets to three, it gets to 350, gets to four. People say, oh my God, this will be the end. I actually don't think there's a number that, oh my God, if we get to a certain level. What has happened that is significant is now you think about this supply, particularly some of the long end supply, some of the AI, the hyperscaler, those yields you get, these real rates now are now an alternative to equities. Would I still buy equities versus buying long bonds? I'm still in the, I like equities, I like the growth, I like the earnings. But you did last time you were here say real rates were attractive. They are, they are attractive. You know, we're keeping some exposure in things like mortgages, some exposure in parts of credit to take advantage of that. I just don't think taking 30-year interest rate exposure versus equities, is a better expression today. So last time you were here as we, let's talk, let's move and talk more about equities. So of the, of the AI trade, okay, you said that you had quote, pulled back a bit and rebalanced when it came to companies directly related to AI. I think you were talking a lot about the momentum aspect of it and some of the memory names and things that have gone parabolic and then it come down and then now had done well again. So what are you doing now? So that, the July experience was pretty extraordinary and particularly in things like memory, compute, infra, energy. Like now you're, now some of these equities are trading in multiples, particularly in compute memory, not just in the US, Korea, Japan. Those are pretty, I mean, so we've added some decent amount of that type of paper. You added, you did. Yeah. And I, and so those multiples, because we know we've got two, three, four years of committed backlog, boy, you can get pretty comfortable at multiples in the, certainly in some of the mid to low single digits that I'm pretty certain that we're going to get, we're going to get return off of that. So we've added some of that. You know, I would say in the mega cap, we are neutral. You know, we've shifted some names around, but pretty neutral. But, you know, I still like, you know, more like memory, compute, infra and some of the energy names. And by the way, every day that they move around, you know, we do, and some of those names, you get to sell volatility alongside your position. You get paid an awful lot to lower your break even. Well, that's why you've declared this one of the best investing environment because of that very fact, at least in part because. Yeah, I will say this is this is the best, most exciting, most fun investment environment. And then I go home at night and and I fall asleep immediately. It is exhausting. It is. There's so many. I mean, like today alone, like you said at the open, the cross currents. We spent a bunch of time today on health care. This is Moderna news. This is significant. So we start to look at the tools businesses. We looked at different parts of health care. Like, boy, every day there's a there's a new menu to to look at. You feel like you're having to, you know, run, not walk. So when you think about the beneficiaries that you may not have seen the full benefit of and from yet, things that are that maybe haven't performed as well, but will when we sort of get a catch up on that on that topic. I mean, health care is obviously one of them, but so there is a interview that is coming out today that they asked me about. Who do you think the beneficiaries of AI will be? And I certainly have no wisdom at all about them. Turner would have the advances that are coming in health care are going to be extraordinary. And by the way, today, you know, God willing, it's pretty impressive in terms of what it could do in terms of in terms of the human condition like that. I think is super exciting. I will say one thing I've never in my career felt like every day I come in and I feel like I'm prepared and I go home and I feel like I'm behind and and it's it is it's incredibly exciting time. But it's stressful because we're learning so much every day. And I feel like I'm constantly on phone calls. What do you do with software? And by the way, we just literally just did a call on different parts of software. What do you think of Infra? What do you think of SaaS? It's it's incredibly complex, fun, but it's tiring. Do you think we were too soon to declare software and SaaS dead? It feels like the market has now kind of figured it out in terms of who the real winners may be and who then the losers may be. But everything got kind of thrown out. Hundred percent. So like everything, markets overshoot, markets react and then think. Listen, I still think the margins generally in software are going to be more compressed going forward. But there are parts of software where I'm more intrigued some of the data related companies, some of the infrastructure, cloud oriented software that I think you get pretty comfortable with or there's going to be a business there for an extended period of time. But I think you got to get underneath the surface, I think, to make a broad statement on software generally is hard because I do think I do think these agents, I do think the LLMs will compress margin in a lot of software. So S&P, as we have this conversation, is a little bit higher than seventy seven hundred. Yeah, it's almost like everybody is the boats move to eight thousand at minimum for this year. Yeah, without like you never really talk targets or anything like that. But but what seems reasonable to you between now and the end of the year if the environment is as rich as you still suggests that it is and the earnings story is as robust as certainly I can ever remember it not, you know. Yeah, I'd love to hear you on, you know, I think we were calling for it. So could you get this year mid-teens type of return on equities? You're pretty much there. Could you get another five to 10 percent out of it? Yeah, I think so. Your point about earnings. We are watching a productivity revolution and people say it's a it's not a it will be a. But everything that's happening, inventory management, customer procurement, predictive maintenance, like every company, if you look at their margins, like revenues are pretty good. You've got a six percent ish nominal GDP. Revenues are pretty good. But your ability to actually take your business, by the way, you don't need to hire a lot of people if you can keep your labor force constant, grow your top line, and then you just see cash flow drop down. And that's a pretty impressive environment we're living in. So it's hard to say, gosh, I don't want to own equities. Given your compounding, those sort of are that sort of are we still going to want the small caps? No, I'm we're doing OK. Yeah, I think I said, listen, there's some good and I get the, you know, some and we've done a part of that question you asked before. A little bit more balance in the portfolio than we've had. You know, I think there are ways to get there otherwise. Well, because the earnings story is now broadened to such an impressive degree. Yeah, that's why all these other sectors look attractive. Yes. The only thing I think is going to happen is part of why I believe the Fed's not going anywhere. We do. We do think the economic data has been superb. It's we think it's peaking and we think you're going to see some slowdown over the coming and by the way, this is not a pernicious. We're running at close to six percent nominal GDP. Can we run at four to five? Well, that's still pretty good. But, you know, markets tend to look at the first derivative and say, OK, what's happening today? And you're seeing it for what you said at the beginning, employment, some of the retailing data is OK. You know, you had a big fiscal tailwind and now you're on the other side of that. It's still a good economy, but maybe not as good. And, you know, we have a great economy. It lifts a lot of those boats. All right. I so much appreciate this extended amount of time. Thank you so much. Enjoyed the conversation as always. That's Rick Reeder of BlackRock. Let's get to some of today's top stock stories now, starting with that groundbreaking news out of Merck and Moderna today. Extraordinary, really. Annika Kim, Constantino following it all day for us, these moves that we're seeing. Wow. Hey, Scott. So this is a landmark day for both companies and cancer patients. And this is the first ever phase three trial on this personalized cancer vaccine. So let's get into the data. This mRNA based shot in combination with Merck's Keytruda met the study's main goal of reducing the risk of melanoma returning compared with Keytruda alone. And the combo also reduced the risk of the cancer spreading to different parts of the body. The data validates this personalized approach to cancer treatment where the shot is designed to target and kill specific mutations in each patient's tumor. And analysts I talked to today say that these results boost investor confidence that this shot could work across multiple types of cancer and potentially become a multibillion dollar product for both companies. If you remember, Moderna is racing to diversify from COVID and bring more products to market while Merck is trying to offset some losses once Keytruda goes off patent later. And we still need to wait for the full data from this trial. And we also have to see when these companies actually file for approval of the vaccine, Scott. OK, Annika, thanks so much. Really, really big moves there. Marvell also rallying in some big news today related to Google. Let's get to Christina Partsenevalos with those details. What's the story here? Well, Google is bringing in a new chip partner. That's the story. The company expanding its custom silicon relationship specifically with Marvell, a formal commercial agreement covering a range of chips that plug into Google's custom chip ecosystem, the TPUs, tensor processing units like inference, networking, memory, definitely broader than the street had expected, which is why shares initially popped much higher than they are right now, but still at nine percent. Marvell issuing Google a warrant for fifty nine million shares at two hundred and six dollars, fifty eight cents. A piece over a million shares will vest within the first year of the deal. The rest in tranches. Marvell shareholders clearly aren't punishing those terms given the stock is higher. But this is really a diversification when CEO Matt Murphy has been promising investors for months on conferences at conferences. Amazon, Microsoft are already on the customer list. You had Google means Marvell now works with all four top U.S. hyperscalers. The pain, though, today specifically lands on Broadcom. Google's custom chip was Broadcom's franchise. Now, Marvell, I guess we could say, has a seat at the table. And Broadcom CEO Hock Tan told investors as much on the last earnings call. Broadcom was never going to keep every dollar of Google's TPU business forever. You zoom out, though, the message is pretty much clear everywhere. The big cloud players are spending whatever it takes on custom silicon, as well as reducing the reliance on NVIDIA. Scott. All right, Christina, thanks so much for that. That's Christina Parts and Nevelos. Now, Target moving higher following its earnings. Pippa Stevens is tracking that action for us. What do we see here? Well, Scott, Target beating top and bottom line estimates and raising full year guidance with the quarter helped by nearly one billion dollars in tariff refunds. Net sales climbed five point three percent, while comparable sales grew three point eight percent. And on the call, the CFO saying they're encouraged by how back to school and how back to college is going, noting they've lowered prices on more than 10,000 items in the last year, saying that matters to consumers right now with additional price reductions planned over the remainder of the year. This all comes from CEO Michael Fidelke, who officially took the reins in February's turnaround plan, which includes more fresh groceries, dedicated displays for higher end makeup and more sports merchandise as a way to entice shoppers back to the store. Target seemingly the standout of what we've heard from retailers this week, especially with the positive guide for the back half of the year. Walmart reporting tomorrow offering another insight into the health of the consumer. Meantime, Target shares hitting a two year high today. Scott. All right, Pippa, thank you. Pippa closing bell up next to crypto comeback. Bitcoin breaking out in a big way today. There's the move. It's sending the crypto name surging as well. Today, McKeel following that action for us. We'll talk to her next. Welcome back. Showing you a live shot here. That is the White House, of course. There's the president. Meeting with leaders in the crypto currency industry today. As we watch that, can't see on your screen there, but we know that Vlad Tenev of Robinhood is in that meeting. Brian Armstrong of Coinbase, the CEO there, is there as well. I think that looks like Jeffrey Sprecher, too, CEO of ICE, of the stock exchange here, if I see that correctly. I think that's who that is, too. There's some exchange leaders there and other leaders from the from the crypto industry. Speaking of, Bitcoin having a nice move today. Taneya McKeel is at a crypto event in Jackson Hole. Joins us now. Nice looking live shot. That's right, Scott. Hey, Scott. Yeah. And look at crypto stocks. They're surging broadly on hopes that this meeting between the Trump administration and crypto leaders that's getting underway now bears fruit for the Clarity Act. And this is really one of the final pushes to get this bill across the finish line before all focus turns to the midterms. But the optimism on Wall Street, Scott, hasn't traveled to the Wyoming Blockchain Symposium here in Jackson Hole. Big name speakers backed out of the event, like the chairs of the SEC and the CFTC, which, of course, makes sense now. And meanwhile, the CEOs of Ripple and Kraken, among others, have left this event early to focus on D.C. and this meeting. Now, the people who did stay tell me that it's less and less likely that the Clarity Act makes it to the president's desk and the industry is working instead on contingency plans to continue innovation within the current bounds of U.S. law. I spoke with Danelle Dixon of the Stellar Development Foundation yesterday. She told me she doesn't think there's enough time for Clarity to pass, but she says that the SEC and CFTC are pushing ahead with new crypto frameworks. The agency just yesterday proposed a comprehensive set of rules for the asset class separate from Clarity. Scott? Okay. Taneya, thank you. That's Taneya McKeel. Coming up, more on today's market bounce. Bond yields pull back from their multi-year highs. Hightower Stephanie Link, JP Morgan's Jordan Jackson. They stand by with their playbooks next. Welcome back. We're getting some new details on OpenAI's IPO timeline. Our Kate Rooney joins us now on the phone with her reporting. So what do we know here? Hey, Scott, I am just getting some details from an OpenAI employee all hands that happened just within the last few hours here. The CFO of that company, Sarah Fryer, telling employees that OpenAI will be a public company in 2027 or sooner. This is according to two sources familiar with the matter who attended this meeting. Fryer said the following. She said, from what I'm hearing, as you know, we are confidentially under file. This company did file to go public, I should mention. Anthropic, their rival, also under file. She says there is a chance they pull the cover off that confidential filing in the coming weeks and they become public in September. So speaking about their rival there, she says about their own IPO here, that's okay. We are running our own race. The IPO is not a finish line. She says it is a milestone, another fundraise. She points back to the record fundraise at the time, $122 billion in March. Says it gives us flexibility. And then here is the line I mentioned, Scott. We will be a public company in 2027. We may go sooner if our business continues to inflect. But either way, we'll do it on our own timeline. She also shared some new revenue numbers. These have not been reported yet. Quarter to date, the run rate in terms of revenue for this company is up 25%. Enterprise in particular was up 50%. And then Codex, which is the GPT side of the enterprise business, that hit $20 million. So some ramp up there. It all coincides with a recent launch of their newest model that was this summer. But noting some momentum in the business at a time, and that is a big question. There's a lot of competition. But that's the latest we're hearing, Scott. But that also sounds to me like a very direct response, if not counter, to some of the stories that were out. Another one today suggesting they've been telling investors about sort of lackluster numbers. And that was hotly debated this morning. This feels like it's targeted towards those critics. Exactly. The timing of this, the Wall Street Journal went out with a story that addressed some of the Q2 numbers. They described it as tepid growth. And they talked about some of the operating losses here. I hadn't heard if she mentioned that by name, but the undertone here is speaking against that, saying, actually, here's the numbers that are the most recent, which, as I mentioned, it's some of the run rate numbers. It doesn't mention profitability. But they've been a company that is willing to spend at all costs to say, hey, it's worth it. We're in the growth phase. We're not focused on profitability. She didn't say that today. But you're right, Scott, that the timing of this does suggest that it's a direct response to some of the criticism that they've seen in the last 24 hours. The other comment that you brought to us from Sarah, Friar, is, you know, we are running our own race. I'm not sure if the market truly believes that's the case. But nonetheless, I'm wondering what you think, what kind of pressure they do feel to actually go through with the IPO sooner rather than later. And you could think maybe a couple of different variables are at play. They know that Anthropic is sort of heading towards the finish line. I'm not sure how far behind in that whatever race they think they're running they want to BE OR IF BECAUSE SOME OF THE HEADLINES OF LATE HAVE BEEN A LITTLE unflattering whether waiting until some of the dust settles on that front would even be better for them. It's a great point, Scott. What I'm hearing is these executives need to tell that to employees so that they can focus and hunker down and say, don't look over your shoulder. That's what a great coach would tell you, that you got to run your own race. But the reality is that both of these companies, whoever goes public, it's looking like it's anthropic first, are creating an entirely new asset class. This is a new group of companies that we have never seen before that bankers and investors are going to have to value in an entirely new way. And the reality is whoever goes first is going to set the benchmark. I keep going back to Uber and Lyft, but it's the analogy that bankers keep using in that one is going to get priced off of the other, regardless of who the better business is. There's very much competition. There's also a big backstory here in that these co-founders, they all used to work together at OpenAI. The co-founders of Anthropocene. Anthropocene. There is some animosity here. We saw it spill over in the Elon Musk trial. These two CEOs, Dario Amadei and Sam Altman, there's a backstory. There's some animosity there. So as much as maybe your average company might say, we're running our race, these companies, from what I've seen, very much compete. And it's in the forefront, although I think that's the right message you want to hear from an executive is, don't worry about the other guy. There's always a backstory in the Valley, isn't there? You know that better than most covering this arena. I'm over here. I'm talking. I'm talking to you from Palo Alto. I'm pulled over on the side of the road to bring you this. Okay. All right. Right in the epicenter of it all. There we are. Kate, thanks. Of course you are. Thank you, Kate Rooney. Well, the drop in yields is giving stocks a bit of a boost today. Here to share how they're playing the moves, Hightower Stephanie Link and JPMorgan Asset Management's Jordan Jackson steps to CNBC contributor, as you know. Hi. Good to have you both here. Well, this was an interesting move, obviously, from the Treasury today. I think it was just what the doctor ordered, even if, at least the stock market thinks that, even if the gains today aren't so robust. Yeah. I mean, the equity markets like it, and there's more that could be done. I think short term, it can stabilize rates at the 10-year, the 30-year. But I'm not sure it changes much in terms of the long term, because you still have an enormous amount of hyperscaler debt that they're going after. And you guys were talking about it. You and Rick Reeder were talking about it. That's the first thing he said. I totally agree. Inflation is still elevated. We still have debt and deficit. Yeah. Yeah. I think there's other things that are being played in the bond market beyond, you know, the control of what the Treasury can do. Yeah. I mean, he used the word when Jordan, when he was talking, Mr. Reeder, when he was talking about what's been happening at the long end, that they were starting to look a little untethered. That's sort of the last scenario that the Treasury wants to see. So maybe it thought that now was the appropriate time to take whatever action they did, even if it was more in statement than actual move. But the mere fact that rates dropped, the boil came off a little bit. If that's going to remain the case for a minute, what does that mean for stocks? Well, look, I think first, this was a signal, not a policy pivot, right? The reality is this is a signal that there is a tolerance threshold for long rates, and that's 5.3 percent on the 30-year. And so I think, you know, it's not a flow story. What are we talking about? An additional $14 billion worth of flow that's dropping the buckets. But I agree with Stephanie. There's heavy issuance. I think the bigger announcement may come from the Treasury refunding announcement when they potentially will be able to get back into the stock market. So I think that's a big announcement. I think the bigger announcement may come from the Treasury refunding announcement when they potentially will need to increase announced auction sizes through 2027 because we start to really get through kind of funding issues as we start to move into the second half of fiscal year 2027. Okay. So what jumps out to me, I think most of all out of your notes, because I haven't heard this from very many people who come sit on this desk, you're neutral on stocks through the end of Q3? That's right. Why? Well, look, I think there's a lot of seasonality-wise, September tends to be a tough month. You've got the midterm elections. There's another era of volatility. And then I think this is kind of a short-term reprieve on the rate side of the story. And that's going to continue to be a little bit of a headwind to the market. But I think after that, I still think we're going to get a bit of a bounce in the fourth quarter. I think markets are primed for a little bit of a correction. You've still got a lot of money in the sidelines, wasting the checks, waiting to chase the next market rally. But people who are either more neutral or cautious or just downright bearish seem to be focusing on numbers that are not the numbers that are driving the market. Those numbers are earnings. And earnings are so robust that that seems to be trumping everything else. Certainly, the market has been more fixated on that than the price of oil, the backup in yields, or almost anything else you want to throw at it. But does that not introduce risk in and of itself? All you need is a kind of micro-earnings miss come October, once we start reporting on 3Q, and the market has got some indigestion issues. So I think there's still some volatility around that. Then I would also say, yes, the 2Q numbers are spectacular. Forty-eight percent S&P 500 earnings growth. However, if you were to remove the equity investment gains in private companies, that 48 percent drops down to 36 percent. I mean, you're telling me if you're giving 30-something percent that that's not good? And by the way, let's just take tech out of the whole thing. The numbers are extraordinary even without tech, even for the average sector. You're doing, what, 14 percent at least? When have we seen this level of robust and broad earnings growth? Well, if you've got that vacant into expectations, the market's got to do better. The company's got to do better than what's already baked in. And we've seen a huge repricing of 2026 earnings numbers, the pulling forward of earnings, and so I think the bar just keeps getting set higher and higher. And there's a risk that a couple of companies don't make it into 3Q. Counselor, the courtroom is yours. Well, 10 out of the 11 sectors this past earnings season grew, and 7 out of the 11 grew double digits. So to your point, it's broad-based. You want to take tech out of it, take tech out of it. But I got to tell you, why would you take tech out of it? I mean, that's the story and AI and the food chain. And that's going to continue for a long period of time. And I know some of the stocks have had a really nice run. So maybe you don't want to go and buy those names in tech right this moment. But I do think that there are other places you can go. You can go into financials. You can go into energy. Materials are drilling really quite nicely. So I think discretionary, between now and the end of the year, I think discretionary is set up very well to do well because the consumer is consumer. You're not neutral on stocks. No, gosh, no. Haven't been for a really long time. I mean, I was buying in April. I've been buying all throughout the summer. I'm looking for opportunities. I did buy some tech in the early summertime, NVIDIA, Micron, that kind of thing. But I still think that you want to be owning a broad-based, diversified, and that's why equal weight is done better than the S&P market weight year to date. There's lots to choose from. We'll leave it there. We'll pick it up again. Guys, thanks. Coming up next, Oliver Rennick. He's spotting some interesting options activity today in the crypto trade. We talked about Bitcoin's bounce. We'll play some options action in the Market Zone, which is next. We're now in the closing bell Market Zone. Mike Santoli and Blue Line Capital's Bill Baruch are here to break down these crucial moments of the trading day. Oliver Rennick's giving us options action, as always, from the SIBO Global Markets in Chicago. Mike, we'll begin with you. Your thoughts on this day. I mean, the fireworks faded, Scott, from the S&P 500. What do you have to say about that? I mean, I think it's kind of dramatic reactions to the Treasury's announcement this morning. Yields kind of backing up just to where we were a few days ago. But it did manifest in the stock market as another one of these broadening days. Semis down hard, everything else rising to kind of offset that. You have 1% gain in the S&P equal weight. It's now back pretty much at an all-time high. I didn't have my S&P equal weight 9,000 hat ready, but that's basically where we've traded today. That being said, I think a lot of the moves are starting to look a little bit different. I think a lot of the moves are starting to look a little bit different. I think a lot of the moves are kind of furious and desperate. If you just look at the action in big cap health care, we know that's news driven. At the same time that banks are down 2%, I don't know, it seems like there's a little bit of churning waters here in the market. We'll see if bonds settle the question over the rest of the week. I figure you'll tackle that at top of the hour, this move that we've seen in yields and what it means, right? Yeah, yields and actually across asset class. We actually have Elizabeth Burton from Fortress to help us with that. Ah, good stuff. Less than five minutes. Appreciate that, Mike Santoli. Oliver, what do you see at the CBO? Hey, Scott. Crypto-related options were already exploding today with new proposed SEC rules, those treasury buybacks and market rotation. But actually, some really big news just broke moments ago when the president mentioned the possibility of bringing hyperliquid to the U.S. That's the international blockchain-based exchange popular for perpetual futures. It's been making huge waves. And watch PER, the ticker we've got up on the screen right now, which owns the domestic incumbent exchanges whose shares just took a hit. Crypto options volume was already exploding today, but this could be a really big catalyst. Definitely keep watching this. Hyperliquid owner PER is up 28% right now. The blockchain-based settlement and infrastructure, arguably, I think, one of the strongest use cases for crypto to date. So Bitcoin believers getting some fresh life here today. All right. Good stuff. Oliver, as always, thanks for both shows today. Oliver Rennick from the CBO in Chicago, Blue Line Capital's. Bill Baruch, he joins us now. This is an interesting day, given the move that we've seen in yields. Good day in the market, albeit a bit muted. What do you think? Yeah, a little disappointed that we can't get a punch higher in tech, really. The NASDAQ itself has struggled to go positive, but we're getting some really terrific moves across health care, across financials. Real clean breakouts in health care this week is exciting to see. So, yeah, everybody's talking about the market rally broadening, and that's what we need to keep fueling this. I'd like to see it, but I would like to see tech join the party. Well, I mean, it's been parting. What do you mean? I mean, the sector's definitely back. NASDAQ has been with the S&P at record highs. Well, the NASDAQ 100 is a bit off the record highs. It's struggling right now, holding the 50-day moving average. From a trader's perspective, I don't want to see much weaker than this as the week evolves. I think there's some great catalysts underneath as we looked at NVIDIA's earnings next week. I think they mitigated some of the circular financing fears last week. But semiconductors, it seems like there's new news each day where I thought the Marvell and Alphabet news would help really fuel it higher. And the index itself hasn't really done much. Well, maybe it's going to be more of a wait and see until we actually hear from NVIDIA. You can only assume that the numbers will be good, but we need to hear the guide and we need to hear from Jensen. This is true. And we've seen NVIDIA run up, into the report many times. I think we're going to see that again over the next week. It is our largest holding, and we bought more last week. We really believe in it right here. But again, I don't want to see if the market, if you look across the board, and as a commodity trader, too, I see gold and silver rallying. I see the dollar weaker. I see treasuries rallying off the list, especially with the long end. I thought this would be a good environment. We'd see the NASDAQ itself up 1% at least today. And that's just a little disappointing. The market's not over. They could join later on. But I mean, over the last few weeks, NVIDIA has had a nice move. I mean, it's already sort of moving into the number. Even if it does nothing from here, it's sort of had a nice bounce back. Oh, absolutely. It's on the verge of breaking out. But Scott, I want more. I want to see this follow through now and lead up into earnings. And that's kind of where my mindset is right now, too. But again, the rally's been pretty broad. You're getting the financials. You're getting the health care to really move. And names like Lilly and AbbVie have had a heck of a week. Amgen as well. Those are in our portfolio. We love seeing that broadening. I just want to see where the semis really kind of, you know, we had the rebound after the cleansing, but, you know, it hasn't done much more. We'll see what happens. Bill, thanks. That's what we need. Bell's going to ring again. Big story today. Yields are going down. And then it turns. Nonetheless, we're going to finish this week.