Closing Bell 11/10/26

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0:57Scott Wapner: Guys, thanks so much. Welcome to Closing Bell. I'm Scott Wapner, live from Post 9 here at the New York Stock Exchange. This maker breakout begins with the very latest in the markets following a hotter than expected CPI. Some hawkish Fed speak today, big jump in rates, the NVIDIA story ongoing as well. The scorecard was 60 to go in regulation. Looks like that. We've been red across the board for most of the day. Biggest decline today coming from the NASDAQ. A lot of it having to do with NVIDIA Slide. We'll have more on that coming up in a new development within the last 30 or so minutes. We'll bring you up to date on everything we know.

1:30Scott Wapner: Other names in the AI trade are moving as well. There are some of the names from the chip space. There's AMD and some of the power related names. Corweave's going to report after the bell. New details today on the Anthropic IPO. Otherwise, we've had some positive moves in the financials. If there's one area with some green, that's it. Hard to come by otherwise, however. We do begin with our talk of the tape. The continued NVIDIA sell-off now into day two, down sharply again today. And as I said, a new development in the last 30 to 45 minutes in this story. We'll go right to Eamon Javers in Washington, who has that for us.

2:06Scott Wapner: Eamon? Yeah, Scott, that's right. The new development is new reporting from The New York Times just dropping within the past half hour. The New York Times reporting that President Trump was warned about Jensen Wang's relationship with a woman, a romantic relationship with a woman who was believed to be a Chinese spy. The New York Times reporting that the president was warned on Air Force One on his way to Beijing for his trip to China last spring. Now, that's important because it matches the timeline, Scott, of that dramatic moment that we all saw around the world of the president stopping for a refueling flight in Alaska and picking up Jensen Wang on Air Force One.

2:44Jensen Wang flying in his own airplane to the Air Force Base in Alaska and then meeting up with the president and getting on board Air Force One and continuing on with the presidential delegation on Air Force One. The Times reporting, though, is that the president was warned by Marco Rubio before that that Jensen Wang was involved in a relationship with this woman who was believed to be a spy for the Chinese. The president clearly deciding to proceed with the pickup anyway and to involve Jensen Wang. Why he decided that, we don't know. Could it have been concern about impacting the economy, concern about embarrassing Jensen Wong, concern about letting the Chinese know what the U.S.

3:27knew about this situation? That we don't know. But it's a very different situation than what the president suggested yesterday in the White House press briefing room. The president was asked whether he knew about this at the time of the China visit, and he gave a very specific answer. And it doesn't square necessarily with what The New York Times just reported. Here's that question and that answer from the president yesterday. I was thinking with Jensen Huang, when you went to China earlier this year in May, did you know about these alleged ties with the Chinese spy then? No, I didn't hear about it then.

3:59But a lot of people have heard about it, and Jensen totally denies that. I asked him today, because I did speak to him today, just to see if he's feeling all right, how you doing. And I asked him about that. And he said he had absolutely no idea that the person in question was a spy. So the president saying he did not know about this issue at the time of the China visit. That just doesn't square, Scott, with what The New York Times just reported, which is that Marco Rubio told him about it on that flight. So we're out to the White House to ask them about this discrepancy. And we'll let you know if they respond to us and let us know how they let you know how they explain that.

4:38Scott Wapner: It does beg the question, do we know why Jensen Wang Amon was initially left off the China trip? Because at the time, we all wondered, where's Jensen Wang on this important trip to China, where presumably semiconductor sales would be discussed? It's a great question, Scott. We don't know the answer to it. We were all covering that in real time. I went on that trip to China alongside the president. And we were all wondering, when we saw the manifest and the list of CEOs who were going on Air Force One, and Jensen Wang was not on there. He's such a prominent person with such a high-profile relationship with the president.

5:14And we would have expected him to be on that trip. He wasn't. And then there was this last minute stop in Alaska to pick him up, essentially, and take him the rest of the way. That moment, Scott, I remember being in Beijing covering this on that side of the ocean. And that moment convinced a lot of people on Wall Street that there was some deal that was going to be announced, some deal to purchase chips for the Chinese, some access, some reason why Jensen Wang was on that airplane at that time. And we were in Beijing trying to chase that down. We couldn't find any indication that there was any deal about to be announced at all.

5:51And that was frustrating us because Wall Street seemed to expect that and we couldn't prove that it was true. Now, knowing what we know now, it does put all of that in quite a different light.

6:01Scott Wapner: Somewhat remarkable, too, that the state visit that was just at the White House and the state dinner, and Jensen Wang was seated at the very same table as the president and President Xi of China. You're seeing the president was at the podium, as you see, making some remarks, but there's President Xi and there's Jensen Wang, along with his wife, at the very table. What would be so remarkable about that setting and the scene is that from all of the reporting that we've gotten so far, Eamon, is that U.S. intelligence already suspected that this woman was potentially a spy from China. And yet Jensen Wang still sitting at the table with the Chinese president.

6:46Not only did U.S. intelligence suspect it, but Chinese intelligence certainly knew it. Right. And there's no question that Xi Jinping knew it. As you see Xi Jinping sitting there picking up his glass of champagne to give that toast and respond to Jensen Wang, who's already got his glass raised. In that moment, in that picture at that table, it is very likely that Xi Jinping knew that Jensen Wang was involved in a romantic relationship, not with his wife, who's sitting next to him, but with a woman who was a Chinese spy. And obviously Xi Jinping runs the Chinese spy infrastructure. So fascinating human dynamics, fascinating corporate dynamics, and certainly fascinating intelligence dynamics all at play at that table.

7:29Scott Wapner: Eamon, appreciate the reporting. Thank you. That's our Eamon Jabbers in Washington with the latest there on a stock that continues to decline. Our Seema Modi covering that angle for us with the latest there. Hi, Seema. Hi, Scott. We have an update on that investigation. NVIDIA moving pretty quickly here, hiring former U.S. prosecutor to lead an independent investigation into NVIDIA CEO Jensen Wong. This is important because Citi analysts had mentioned in a note this morning that this independent CEO review was seen as an overhang and that long-term leadership stability risk is still among the key investor questions.

8:01I was told that Jensen Wong was in the office yesterday and is there today as well. In terms of yesterday, he conducted his regular morning meeting with his top-level executives and that it was business as usual. The stock at the lows of the day, it's raised about a 10 percent of value in the last 48 hours, shedding$460 billion in market cap since last Friday. Scott, no longer the biggest company by market cap, falling just short of Microsoft. As the street looks for more details on the investigation, what comes out of it, earnings now one week away, Scott.

8:35Scott Wapner: Seema, thanks so much for that. That's Seema Modi. Now we welcome in Stacey Raskon. He covers the company for Bernstein. It's good to have you back. You were on the network yesterday in which you said, quote, on succession and Jensen Wong. I'm not really worried about it. If, God forbid, something were to happen, them being able to find someone who could run the company in a good way, I'm sure they can. Do you have expanded thoughts on that very topic today? That's only half of what I said. Right. So what I said is I'm not worried about them finding somebody to operate the company and run it. And I don't think customers at this point would be buying less NVIDIA products because of this.

9:10What I am worried about is like Jensen, I even wrote this, Jensen is NVIDIA, NVIDIA is Jensen. And, you know, forget operating the company, you know, for next month or next year. Who else is equipped to set the roadmap and think five years out, 10 years out? It's not intuitively obvious to me who would replace him in that very important role if he somehow found himself unwilling or unable to leave the company. So that's where I would worry. I don't worry as much about the near-term operations. But that long-term vision, I mean, the whole company is built around one man, Jensen Wein.

9:48Scott Wapner: What's the Jensen premium, do you think, in the stock as you see it? Yeah, I don't know. That's a great question. I mean, it gets to the key debate here, which really is around this key man risk. And look, I don't want Jensen to leave. I don't think anybody who's really involved with it really wants him. I don't think investors want him to leave. I don't think the board at this point wants him to leave. And I would say that if he doesn't leave, like the stock is pretty cheap. But if he does leave, it's probably got downside. And I'll be honest, I don't know how much downside. I've been getting that question a lot from a lot of clients recently.

10:22I don't know how much of that premium is built in or was built in. But I think it's safe to say it would probably have downside for where it is even now if he was somehow to exit.

10:36Scott Wapner: What's the risk in the name as long as the investigation goes on? Obviously, a couple of days worth of pressure and we see it at the lows of the session. Now, presumably, there will be more developments to be reported on. Yeah, and that I think is this is going to be an overhang. So we're seeing headlines coming out every day. I'll be honest, headlines mostly read negative. In many cases, when you start to drill into what's actually the stories behind the headlines, there's a lot more nuance into it. But but the actual headlines that hit the tape are clearly not going to be positive. And so these are going to probably come out in dribs and drabs probably over the next several months, I would think, as this investigation.

11:16And for every single one, it's going to be like one more tape bomb that's going to hit.

11:21Scott Wapner: It's going to be an overhang for a while, I think. Are you sharpening your pencil? I mean, are you thinking about how to model this company without Jensen Wong? And if not yet, when do you start to do that? You've already made the case that demand hasn't and presumably won't take a hit as a result. And I suppose ultimately that may be the most important thing for your story. But when do you start crunching numbers? Yeah, I mean, it's hard to put numbers around, you know, something like that. Like, what would their roadmap actually look like in five years or 10 years, you know, with him in the helm versus not?

11:58Like, I don't really know how to model that. But I think it's safe to say that if that were the case, you could probably make an argument that some of their other competitors would be more competitive in that environment. And, in fact, we're seeing some of them run. I think you showed earlier, a couple of minutes ago, a chart of AMD, right? I mean, that was green today in a market that's red. I wouldn't be surprised if some of these considerations were the reasons behind some of that. So my guess is you will have more behind at least the narrative of some of their competitors in this kind of environment when you figure that NVIDIA, in the best case, is distracted.

12:34And in the worst case, you know, would have a roadmap like over the long term that might be more impaired than it otherwise would be.

12:42Scott Wapner: Glad you went there because I was going to go there in terms of the competitors, so to speak. AMD, Broadcom are the ones that had gotten a nice move certainly yesterday as NVIDIA was falling. What is the competitive dynamic between the companies? How close are an AMD and a Broadcom to taking advantage seriously of any misstep by NVIDIA? Yeah, I mean, right now it doesn't really matter. Like, everybody is doing phenomenally, frankly, because the market environment is so big. And my general view in this environment is the competitive dynamics don't matter as much. Is it big or is it not? If it's big, I think there's room for everybody.

13:23And if it's not big, everybody has problems. And you can look at the numbers that all of these folks have been putting up. And Vinita at this point is guided for something like 70 percent growth next year, which puts them in the ballpark of$700 billion or something. And Broncom said they'll do$115 billion and maybe more. And even AMD said, I mean, AMD is effectively guiding for their server revenues next year to double and their GPU revenues to almost triple. They even got players like Qualcomm and others that are much smaller, but taking advantage of some of this. So right now, the market environment has been incredibly supportive of everybody that has something to sell into it.

14:00Longer term, I mean, look, it's a huge market. Like, competitors are all investing. But this is semi-conductors. There's always somebody that is trying to eat your lunch. And it's imperative on NVIDIA as well as everybody else to try to invest and make the right choices to stay ahead. And again, with Jensen at the helm, I think NVIDIA has been been very, very good at doing that. I hope he I hope he remains at the helm.

14:24Scott Wapner: We'll talk to you soon. Stacey, thank you. That's Stacey Raskon. Now to the other big story of this day, Anthropics IPO, the updated prospectus hitting today. Our Kate Rooney has more on what we're learning here. Hi, Kate. Hey, Scott. Well, we did get some new information on timing and price in this highly anticipated Anthropic IPO. At the high end, Anthropic would net about$64 billion, a$1.4 trillion valuation there on a fully diluted basis. Last valuation for some context. In private markets, about$965 billion. So a step up in price there. Anthropic does plan to offer 825 million shares in a range of between$70 and$78 a share.

15:05And mark your calendars. Sources telling our Leslie Picker this morning that Anthropic is set to price on Wednesday of next week and then list on Thursday. It's going to be on the NASDAQ under the ticker, I should say, ANT. There are some notable private placements as well in this deal from strategic investors. You have AMD, Broadcom, Alphabet, Micron, Microsoft, as well as NVIDIA and TSMC. They're going to buy about$26 billion worth at that IPO price. We did also get some key October numbers in this morning's filing, which does support the growth story and showed some momentum. The run rate revenue was around$81 billion, at least in October.

15:42That was up by about$10 billion sequentially from the previous month. We did already know that revenue growth. Total revenue was up about 1 ,200 percent from a year ago, if you look at least at the nine months that ended in September. And then we heard about retail allocation earlier this morning. It's about 20 percent for this deal. So it's lower than SpaceX, but higher than the typical IPO, Scott.

16:04Scott Wapner: Kate, thank you. Kate Rooney, on that big story, Lo Tony of Plexo Capital, an early Anthropic investor and a CNBC contributor joins us now. You'll be with us many times right up until this IPO load. It's good to have you back. Thanks for having me. Most impressive number today to you was what? The 1.2 to 1.4 trillion range, I think, is very impressive. And, you know, we look at that, I think with the company going so much momentum, as Kate just pointed out, with revenue growing rapidly, the enterprise adoption clearly accelerating, and the establishment of the company as one of the leading platforms in AI, that's a big win.

16:46You know, I think so much emphasis was placed on looking at the drop from$2 trillion. But I look at this as very healthy on the price discovery side. You know, the worst outcome would be for the IPO to be priced so aggressively that the public investors wouldn't have an opportunity to participate in upside. So I believe if the offering is well received, there certainly could be meaningful appreciation once trading begins. But look, that's not the most important measure of success. The real opportunity is for Anthropic and the team to create value over the next five to 10 years. And, you know, those are the things that I'm looking for.

17:26So if there's any questions I'm thinking about, does the valuation justify the momentum? Can the company translate that growth into attractive returns? And then, you know, how does the lockup schedule affect the stock as it transitions publicly.

17:42Scott Wapner: When you're on the cocktail party circuit out in San Francisco and beyond, and the layperson, the retail investor comes up to you and says, hey, I saw you on CNBC talking about being an early anthropic investor. You think I should buy this in the IPO? What do you say? I say it depends on what their perspective is on the use of the proceeds from any upside. If the individual is looking for something long term that's going to be a meaningful play and the company which could reach and be one of the most important companies over the next decade, with that longer term perspective, I absolutely say bye.

18:21The thing that I never do for any IPO is recommend a purchase for someone that's just looking to flip. You know, these are the types of companies where an individual needs to take a long term perspective.

18:36Scott Wapner: How do you think it's going to do? At the IPO, I think it's going to do well. You know, I'm bullish on the company. And I think that just looking at the kind of ability to push through and to actually proceed with the listing, very important. It's a very important signal, especially with all the dynamics that we have going on right now with the industry and the economy. You know, this is a very meaningful IPO. It was meaningful, you know, a month ago when everything looked a lot different. it remains meaningful now. So I'm very bullish on the company and intend to watch it closely and participate in the celebration and want to go public next week.

19:15Scott Wapner: Look, stay with me for a second, if you would. I want to come back to you, but I do want to get some more news out of Washington. Our Megan Casella has that for us. Megan, what are you learning? Scott, an incredibly fast moving story here. This is the Financial Times now reporting that the Commerce Department has been delaying, including the company Megaspeed on its trade blacklist that would effectively bar U.S. companies from doing business with Megaspeed. Megaspeed, of course, is the company tied to the alleged Chinese spy Alice Wong, who has been having a relationship with Jensen Huang of NVIDIA.

19:45The reporting here from the FT is that multiple U.S. government agencies, including the State Department, Treasury, the Pentagon, and the Energy Department, all have been pushing the Commerce Department to include Megaspeed on this trade blacklist, or the entity list, as it's known, and that commerce has so far not done it and has delayed doing so. I will add some context here that commerce has not added any companies to that entity list in over a year now since that trade truce was struck between the U.S. and China. I was just talking with one former official yesterday who flagged this as an ongoing issue.

20:19There are a number of China hawks on Capitol Hill and in the administration that have seen this as an issue. So it's not clear whether this was a delay that was Megaspeed specific or whether this is caught up in all of the delays of no companies being added to that list so as not to disrupt that trade truce between the U.S. and China. But now, given all this attention on Megaspeed, it's become clear, as the FT is reporting, that Megaspeed is one of those companies where the U.S. government was aware of some issues and not added it to that entity list, Scott.

20:49Scott Wapner: Just to make sure we're clear as well from what we're reading on the screen, this isn't a new development of delaying Megaspeed's inclusion. This has been going on. it had effectively been delaying their inclusion on this list. That's absolutely right. What's becoming clear here, there are so many questions about who knew what and when, and were concerns dismissed or ignored? We don't know the answer to that, but that's correct that there have been just ongoing delays in blacklisting some of these companies that are thought or known to have ties to the Chinese government. Megaspeed was one of them that was caught up in these ongoing delays.

21:24Scott, there is a quote in this story that I think sort of wraps it up that says it is mind boggling that commerce knew months ago that Megaspeed is being run by a Chinese spy, but did nothing to stop them from buying nearly five billion dollars worth of NVIDIA chips. That's from Chris McGuire, a former U.S. government expert controls official in this FT story, but sort of sums it up as to why now there's so much concern as to these ongoing delays.

21:46Scott Wapner: But still no comment from Secretary Lutnik regarding this story on any side of it, correct? On any side of it, we haven't heard anything, to my knowledge, from Secretary Lutnik, even since the first details of this were being reported over the last week or so now. So we are out to the Commerce Department on this one. We'll see if we get a response. What the Commerce Department has said in the past is that, of course, they are enforcing export control policy. There's been a lot of reporting as to why there's been so much slowdown, micromanaging allegations and that sort of thing. Commerce has said all along, business as usual.

22:16We'll see what they say about this one.

22:18Scott Wapner: Appreciate your reporting, Megan. Thank you very much. That's Megan Casella down in Washington. We bring Lo Tony back in. We'll finish our conversation today, Lo, where we finished it yesterday. And that's this continued market fallout to the NVIDIA bombshell report, obviously, over the weekend. You've had another day to process all of this. How are you thinking about it in terms of its impact on this trade overall? Yeah, my assessment hasn't changed based on what's publicly known. You know, these are very serious allegations and the board has expressed confidence in Jensen. They've selected an individual in a law firm to lead the investigation.

22:59Those are positive signs. But, you know, look, these are very serious allegations. And the news that just broke by your colleague, it's clear that when you're in these situations, usually, you know, more news proceeds to come out. So I think for the moment, we just need to take a step back, digest everything, not jump to any conclusions and see where we land after a thorough investigation, both internally within NVIDIA, as well as clearly there are some things that need to be taken a look at at the Commerce Department as well.

23:32Scott Wapner: Are you surprised in any way that from a stock market standpoint, this has by and large remained idiosyncratic, if you will, not a huge spillover into other areas of the AI trade itself? Yeah, I think there's a few different ways to look at that, Scott. One is just to look at the resilience of the AI trade in general and the fact that it is bigger than just one company, albeit a very important company and a very important individual in NVIDIA and Jensen, respectively. There's a lot of excitement around Anthropik and that IPO. So, you know, clearly that's going to drive some momentum. But look, I've said this, there's kind of three things that Jensen brings is obviously the leadership at NVIDIA.

24:19They do have a very strong bench with some talented executives, but Jensen is the founder. The second thing is just Jensen's role within just kind of the government and President Trump and the administration, kind of including him and his leadership. And then the third is the importance of Jensen just talking about AI, which is driving the global economy. So these are very serious allegations. But, you know, this is why it's important to have benches and, you know, visibility. And they have that in NVIDIA. It's just not as visible as we saw the transition between Steve Jobs and Tim Cook. I would even put, you know, OpenAI in that bucket of, you know, clearly Sam Altman is a great leader, but he also has Sarah Fryer as the CFO who has visibility and an important role in the company and within the ecosystem itself.

25:13But again, you know, we have the global economy being driven by AI, and we just have a small number of influential individuals that seem to have an outsized impact on it.

25:23Scott Wapner: He is AI's chief cheerleader in many ways. Lo, thanks. We'll talk to you soon. That's Lo, Tony. As we said at the very top, stocks are red beyond NVIDIA today. Let's welcome in our panel to react to that hot CPI and everything else going on in today's market. CIBC Capital's Chris Harvey, Rockefeller's Angie Newman. It's great to have both of you here at the desk. What sticks out to you in the way this market's trading? Well, you said it before, it's pretty resilient, right? What we're doing is we're in the process of moving from defense to offense. We think that NVIDIA is creating more opportunity for us.

25:56We're starting to pick away at places where we have conviction. That's hyperscalers. In financials, that's alt managers. Some of the consumer electronics names look good to us and some industrials.

26:05Scott Wapner: So this is added to your conviction in some ways in the hyperscaler trade. That's interesting. I think so. The hyperscalers are in pretty good shape. What you're doing is you're taking that CapEx spend and that CapEx cycle and you're flattening it and extending it. That's great for the hyperscalers, right? That creates scarcity value. That relieves them of a lot of the funding issues. And I think that expands their multiples. We'll see what CoreWeave has to say tonight. But really, these hyperscalers are in a different category than the neoclouds. When you first heard the news regarding NVIDIA, did you expect a larger spillover into all of tech in the AI trade?

26:39I expected a spillover, not a larger spillover. It really is NVIDIA specific. And what you're seeing is really interesting is some of its competitors are going up. And one of the things that I was thinking about as you were talking is let's make believe, and I don't think Jensen is going to leave, but let's make believe he leaves. He's not going to sit on the sidelines for a long period of time. He's going to go somewhere else and create value somewhere else. And so that's ultimately very good for the market. That's fine for the market. All this is doing is just creating an opportunity for us to move into higher conviction positions.

27:09Scott Wapner: Are you as sanguine as Mr. Harvey sounds right next to you? Well, I am not allowed to comment on individual names, but I think this just underscores the importance of not being overly concentrated in any one area. And I think what the market has shown us is that it's interesting how quickly investors can take profit when a crowded trade encounters a new source of uncertainty. So whether it's what happened on Thursday with the election outcome or the news of the day, the most important thing is to be diversified. We are in the same boat as Chris. We're looking at companies that have high cash flow, manageable debt, clear AI adoption, and obviously reasonable earnings.

27:53And I'll add controversy-free.

27:56Scott Wapner: Yeah. Are you looking to buy on any meaningful weakness? I mean, do you think that this market is still resilient enough that it's worth buying some of the weakness? Look, we build long-term portfolios. And I absolutely don't think we can bet against this market in any way, shape or form. It's just a rotation to higher quality. You know, even after the election results, we're looking at companies that are less dependent on outside capital that, again, have very strong balance sheets. So, you know, we like large cap industrials. We like anything with infrastructure. You know, the CapEx thing is a concern also.

28:36And we think that, you know, companies are going to continue to spend. We don't see any meaningful deceleration there.

28:41Scott Wapner: Do you feel like the Fed is in any way a wild card, Chris, after the hot CPI? I don't think so. I think people are overblowing it. If anything, I think the Fed should be less hawkish. I know, but they're not. It's irrespective of what you think. That's the perception right here, right now. I don't quite get what Waller said. Hey, let's skip over October, but maybe we should go 50. That doesn't make any sense to me. And at the end of the day, what Warsh is saying is, hey, everyone can have their opinion. Everyone can voice that. But we're going to get together. And what we're doing is working. And I think what he's doing will continue to work.

29:16So there's no rush. He has a steady hand. He's going to continue to have that steady hand. And the factors driving inflation are falling in his direction or trending in his direction.

29:26Scott Wapner: Do you not think that they'll hike in December? I think they'll hike in December. And it doesn't matter? Yeah. I think at this point in time, they'll hike in December. I think it's done. But now the question is, if you thought they were going to be very aggressive next year, I think you have to dial that back despite what you're seeing today. Because, again, that data center, if you look at what happened with data centers, you're not going to see as much growth. That was driving inflation. In addition to that, you've tightened monetary policy. But the market's also done it for you as well. So I do think that the Fed's not going to be as aggressive as many people are expecting and what we're seeing today.

29:58Scott Wapner: That's a hot take. What do you think? I agree also. So I don't think that a 25 basis point raise in December is going to meaningfully affect earnings. Again, I think it will more so affect the companies that rely on outside capital. So with regard to the data centers, I agree they have to be built, whether the hyperscalers who are doing most of the building have to incentivize the local governments and communities in ways bigger than job creation or tax breaks. I don't know. But even if one state doesn't want to continue to build, I'm sure that we'll find a way to do it. It has to be done. But you think a December hike?

30:35I think a December hike, yes. 25.

30:37Scott Wapner: If they went 50, what would happen to the market? I think you would see some weakness in the market. I do. All right. It's great having you both here. As we discuss this market and all these fast-developing stories, there's been a lot of Fed speak, and there's more at this very moment. Michelle Bowman is on the tape right now. Steve Leisman, our senior economics correspondent, has that. What's she saying, Steve? Scott, Michelle Bowman, the Fed governor, is on board, it sounds like, with hiking, but maybe a little less hardcore than the other Fed speech we've heard today. Let me go through it here.

31:06She says persistent inflationary pressures on affirming labor market indicate, quote, there is still work to do when it comes to monetary policy. Inflation, she says, is showing signs of broadening. Progress has disappointed. She adds that it's also proven to be more persistent and is a high priority for her. Monitoring how changes in financial conditions affect the economic outlook. Here's where she gives another side to the story here. She's watching, she says, the outlook for AI financing and geopolitical risk says those will play a role in setting policy as well. The risk, she says, includes a, quote, large correction in equity valuations if returns on AI investment fall short.

31:44Higher rates appear to be, she says, holding back some AI investment already as well as some purchase decisions. The benefit of additional tightening has to be what she says against the cost to interest rate sensitive sectors, for example, like housing. Also points out that monetary policy has limited effect on tariffs, energy and AI related pressure. Scott, these are different remarks than were made earlier today by Governor Waller, who suggests he said we should do 25 and maybe think about a 50. And then we had Logan this morning from Dallas say a couple 25 is probably what we ought to be looking at.

32:16I just want to update right now the Fed fund probabilities, which earlier today had suggested markets were real on board with a rate hike in December. Now we're looking at 100 percent of that and then about a 63 percent probability of a hike in January. And that's the new piece, Scott. We had not really had that second hike built in. Now it's built in in this consecutive way, more or less, for January. I think we're looking at it says 64 percent now for a January hike. Were you surprised at Waller willing to go to the 50? A little bit. I mean, it's definitely an evolution of his thinking here.

32:55But, you know, one of the ideas, Scott, is if you think you need it today, don't wait till tomorrow to do it. I think an idea of a large move is a possibility. I will say that between this idea of Logan 225s in a row versus Waller's 50, the market's a little more sided in how it's priced with the Logan idea. I'm only looking right now at a 12 percent probability of a 50 in December right now. So that is not really what the market is thinking. And I also think a more gradual approach from Warsh is probably the better expectation than one from Waller where you would do a big 50.

33:33Scott Wapner: Well, I was thinking about the potential of just that, the wedge between the Fed chair and an influential Fed governor. Steve, thanks. More developments to come, I'm sure. That's Steve Leesman. Up next, Morgan Stanley, Sherry Paul. She joins me right here next at Post 9.

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34:49Scott Wapner: Welcome back. We're Lower Today, focused on the Fed and the AI trade, of course. Sherry Paul is a private wealth advisor for Morgan Stanley, joins us now. It's nice to have you back. Thank you. You're sticking to your guns. 8 ,000. year-end? Sticking to our guns. Why aren't you wavering? You know, a rotation's not a rejection. It's just a rotation. And, you know, all the talk about data centers, they might be delayed, but they're not going to be denied. There's an inevitability to the trend. And we're staying on point. So you think the broadening carries us to 8 ,000? That's what gets you there?

35:22Broadening carries us. You know, the thing that I love is that we just went through a democratic process. And now we let capitalism take the reins. And if you're a capitalist, then you're going to look to find opportunity as money starts to move around into different constituencies and sectors. Very different than us facing poor outcomes or a recession, which is usually the thing that takes a market down.

35:43Scott Wapner: What do you like the best in the market right now? I mean, has that changed if your overall outlook hasn't? Has that? No. Right now, actually, I think you stay in large caps because you've got the balance sheet and the money and the capital and the ability to raise capital to pivot. So we're seeing the rise of the holding company and a greater consolidation and concentration in the space. We'll probably see the Fed raise rates a couple more times. That's a little bit tough for small caps. And even though they had a good year, not as great as owning the tech sector. So we're sticking with our overweight in tech and industrials.

36:16And next year, we're going to see everything turn into a tech company.

36:18Scott Wapner: You sound like we're remarkably sanguine about the whole environment, that, ah, they'll raise a couple more times, no big whoop, Everything's going to be great. We'll do 8 ,000 and beyond. Well, you know, I got to tell you, isn't that usually how it turns out over two to three years? So it's not a point of sarcasm, but for investors, I just want people to really understand, like, this is what we do in this country. We have elections. The party politics shift. Maybe some laws get passed, usually having to do with taxes, but real growth and wealth occurs in the capital markets. Until the Fed makes a move to stop the growth part of the equation, no?

36:53Well, when's the last time that really happened? October 2022, we went into an aggressive Fed hike. We had the Nasdaq down 60 percent. We kind of kissed the lips of a recession, never actually went into one, but everyone was very obsessed with it. And look at where we are today. And I hate seeing individual investors get stopped out over the volatility of the politics when the trend lines are showing that we're in the middle of one of the most important industrial revolutions that we'll see in our lifetime. And I want them to be participants in it.

37:21Scott Wapner: What do you make of what had been a more defensive makeup of the market? Did you say that was indicative of the broadening rather than say, well, that's a weak representation of a broadening because it's so defensive in nature that you can't really count that? Well, look, last year, you know, more than 40 percent of the return was from the top 10 companies. All right. This year, every single sector of the S &P is positive except for two. That's a broadening out. And so what's the causality of that? Earnings. We're at 18 times earnings now, setting up, going, and we've got, what, 88 % of companies reported that beat.

38:00We're looking at 31 % earnings growth going forward. And so that's a really nice setup going into the new year.

38:06Scott Wapner: I mean, unless you think that we're peaking in earnings and you must not. Yeah, no, I don't. But what I do think is that we haven't peaked in volatility. So there's a difference between volatility, and people should expect it, and the dispersion of volatility will likely increase. that's different than something bad happening that will lead to a catastrophic decline of more than 10 or 20, 15 percent in the market. Very different. And so this is why for individual investors, you've got to really prep your portfolio for personal timelines. You know, a 20 year old is different than a 70 year old and they worry about the different things and they're investing in different things.

38:40And so the nuance there is how do you construct a portfolio to meet your personal moment in the market and in the investing climate that we're in right now? And, you know, that's the thing I love to help people do.

38:50Scott Wapner: So you don't worry about things like the semis, as some try and call a top in that trade, and then others, if that does happen, asking the question, can you have a bull market continuing if those don't? Right. Well, that's a really good point. You know, look, there are practical outcomes that are coming our way, and I've been referring to them as corporate extinction events. So we're in a moment where this particular tech is advancing at such a rapid pace that the disruption is immeasurable. So we should be preparing portfolios for that. And that's why we're starting to see staples take a run.

39:28Banks, financials, energy stocks. There's plenty of places to kind of cushion a portfolio in areas that are going to advantage themselves of this tech in a way that will lead to cost reduction. and hopefully then at a certain point, we should see this be deflationary next year. This is why I don't worry so much about the Fed. The market's going to take care of inflation next year to a greater degree than I think people realize because this tech is fundamentally deflationary.

39:52Scott Wapner: That's what we needed today. Yeah. Jared Paul, thank you, as always. You're welcome. Joining us here at Post 9. Up next, the biggest movers as we head into the close. The Bell is right back.

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40:50Scott Wapner: Ten to the bell. Back to Brandon Gomez now for a look at the key stocks that he's watching. What do you see? Hey there, Scott. First up, Charter Communications climbing after the company said its subsidiaries issued eight cash tender offers to buy back up to$1.5 billion in outstanding notes. You can see shares there are up about 11 % on the news. Next up, we have Hims & Hers Health sliding after posting a Q3 net loss and a weaker full-year sales outlook. Despite year-over-year Q3 revenue growth, the drugmaker's forecast for Q4 revenue fell below analyst expectations. You can see that name down about 18%.

41:22And then finally, quantum stocks taking a hit after quantum computing and D-Wave Quantum.

41:26Scott Wapner: Both reported Q3 net losses despite beating revenue expectations. Those earnings also dragging down quantum names, including IonQ, which you can see sliding almost double digits there, Scott. Brandon, thank you. That's Brandon Gomez. Up next, CoreWeave earnings there on deck as well. What to watch for ahead of that key print inside the market zone?

41:52Scott Wapner: OK, we're now in the closing bell market zone. Mike Santoli and Wells Fargo advisors, the Taylor Group's James Taylor, Here to break down these crucial moments of this trading day. Oliver Rennick standing by live in Chicago at the SIBO Global Markets. We'll play options action. Seema Modi looking at a very important earnings report in overtime. It is poor. We will get the latest there. Michael, we'll start with you and get your thoughts on this day. Yeah, I mean, the index is holding the vast majority of yesterday's bounce, I think, is probably the headline. They were pretty good excuses maybe to back off a little bit more given what's gone on with NVIDIA.

42:26Most of the semis softened up a little bit. And then this pretty radical repricing of the Fed expectations for next month after the CPI number. You know, all in all, you know, you might have expected the market to back off a little more. Now, two thirds of all stocks are down. It's not as if people are really shrugging it off entirely. But for now, without it being particularly decisive as to whether yesterday's bounce was a consequential one or not, I do think, you know, you can sort of say definitely could have been a good deal worse. Without NVIDIA, S &P is probably up.

42:57Scott Wapner: Yeah. How do you look at it coming up in about five minutes or so in overtime? And you do have that key earnings report that we're going to get to SEMA on in just a moment. Yeah, exactly. I think that is really what we're going to be focusing in most tightly on is the core weave numbers. We do have Brent Thill from Jeffries to break it down as well. And I think that's going to offer the cue for tomorrow probably. Oh, good stuff. All right. We'll see you then again. Five minutes away in overtime. Mike and Mel, let's go to Chicago, play some options action with Oliver. Where are you looking? Another blockbuster day for NVIDIA, Scott.

43:27Volume more than three times the 30-day average on pace to eclipse yesterday's action with 7 million contracts and over$4 billion in premium traded so far. Among the 20 biggest options trades in the entire market today, 16 were NVIDIA. Yesterday, it was$50 million options legs that were bullish. Today, it's$100 million legs that lean bearish. One trader closed out a$113 million, 165-strike put position for February that was almost in the money at today's low and bought a new$50 million put rolling into the$140 strike expiring in January. NVIDIA is now technically oversold. It's fighting to hold one-year lows, and it's back under$4 trillion in market cap.

44:15This is not the kind of momentum most traders are used to from this stock. Combine that with gargantuan options, whales splashing back and forth in what was once an old, reliable trade, may now be one of the most risky, Scott.

44:29Scott Wapner: Yeah, Oliver breaking below$4 trillion in market cap, briefly rebounding. We'll watch that. That's Oliver Rennick in Chicago. Now to that critical earnings report in overtime. It is CoreWeave, and Seema tells us more. Hi. Scott, pressure has been mounting on CoreWeave, the stock losing almost a half of its value in the past three months. CoreWeave has taken on leverage to support its business model, but any uncertainty in the AI market has proven to be a challenge for the company, plus the cost of capital rising. The company's bonds in distressed territory above 15%, and now its biggest supporter and partner, NVIDIA, embroiled in its own investigation.

45:02Remember, NVIDIA does have that 9 % stake in the company. Wells Fargo, though, calling CoreWeave the best neocloud to own. We will be listening for commentary from CEO Mike Intrature on its partnership with NVIDIA and Microsoft after we reported last Friday that the hyperscaler is looking to consolidate its neocloud partners, Scott.

45:19Scott Wapner: He'll be coming up on the network tomorrow morning. We'll look forward to all of that. See you in overtime. That's Seema Modi, James Taylor to my left. We look at this market. People are holding the line on this AI trade. Doesn't sound like you're that willing to though. No, I'm actually, I'm still bullish on the AI trade. I think you just have to be very specific in the names that you're buying. You know, everything that's going on with NVIDIA and Jensen, it's unfortunate, but I think he'll be the first person to tell you that there's 41, 31 ,000 employees at the company, 31 ,000 brilliant engineers.

45:46It's not just made up of one person. There might be some short-term volatility there, but long-term, I still like to play.

45:51Scott Wapner: So you're not worried about the stock over a long period of time? Not over a long period of time. Short-term, there might be some volatility. I think that there's still, there could be some news that comes out. I think it's too early to tell right now. But overall, like I said, I think 31 ,000 engineers, 41 ,000 employees that are really holding up the company. I think Jensen will be the first person to say that. And the numbers are still there. I think there's still demand there. I think we'll be pretty surprised from an earnings perspective. And I think we just have to wait and see what happens from a news perspective as how volatile the stock will be.

46:19Scott Wapner: What about the volatility in the broader AI trade? How do you see that? You know, I think Thursday was a pretty major shakeout. I think there's just a lot of, you know, between the election results. And I don't think it's a good strategy to blow up the economy. So I do think that we're going to reach across and hopefully come up with something around regulation. But that's not too stringent. So I do like the AI trade. We were net buyers on the sell-off. We thought we were sticking to high-quality names there. Some of the names might struggle going into the end of the year, but overall I think we're still constructive on AI.

46:53Scott Wapner: I want to make sure I'm reading one of these notes of yours correctly. You say the majority of your clients are early employees at winners like NVIDIA? We have a lot of clients at NVIDIA. I'd say about 90 % of our practice is probably made up of NVIDIA engineers, give or take. Really? What are you telling them directly then? Is that why I thought it was interesting the way you spoke in what almost sounded like a more personal way about the company and Jensen Wong? That's because of how close your firm is to the employees there. We work with a lot of engineers there. I think, again, a lot of our clients have been at the company for a long period of time.

47:30They've had significant concentration in the company. I don't think our clients are necessarily worried about moves up or down. I think they're really worried about taxes and tax implications if they're getting out of any concentrated positions there. But what we're telling them, I mean, again, same thing. I think it's too early to tell. We do believe in NVIDIA over the next 12 months, but short term, there might be some volatility.

47:48Scott Wapner: That's an interesting inside view from you. I appreciate you sharing that with us, too. What about elsewhere in the market? What do you like? You know, I like health care. I think, you know, I was out here in mid-August talking about health care names. Health care has rallied about 13 % since we talked about that. Yeah, going into the end of the year, Energy's been a rock star all year. I do think that there probably will be a sell-off in those names, so I'd be taking games there and rotating into some of these other names that have gotten beat enough. All right. We appreciate you being here. They're going to ring the bell as you hear, and there it goes.

48:17Scott Wapner: It's going to ring us out red, obviously, and video remains a considerable story. We'll follow Corley's earnings in overtime. I'll send it there with Melissa Lee and Mike Santoli.

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