Closing Bell 9/17/26

0:00Some of the most important design choices are the ones that go unnoticed. The details that together make an experience feel intuitive, comfortable, and above all, exhilarating. At Acura, that means looking closely at how every detail can make your experience behind the wheel more rewarding. Every lesson learned and every idea refined becomes part of what comes next, and it lives inside every MDX, ADX, and Integra. That's precision-crafted performance. That's Acura. There are three kinds of investors that listen to this show. Those protecting what they've got, those looking for solid returns, and those swinging big.

0:32Most tools pick a lane. VectorVest doesn't. Every stock gets three scores. Value, safety, timing. You decide what matters most. Stop overthinking what to buy and sell. Go to VectorVest.com slash Closing Bell. Get 30 days for just 99 cents. VectorVest provides stock analysis tools, not personalized investment advice. Terms at VectorVest.com. Welcome to Closing Bell. Well, I'm Leslie Picker in for Scott Wapner today. This make or break hour starts with a rate hike rebound. Stocks are pushing higher and yields are moving lower as investors try to move on from yesterday's Fed-fueled sell-off. Here is your scorecard with 60 minutes to go in the trading session.

1:14You can see the Dow up about 0.7 percent, the S &P up more than 1 percent, and the Nasdaq, the real standout here, up more than 1.6 percent. Every sector is in the green with the exception of consumer staples down about one-tenth of one percent right now. Tech, the real standout with the chip stocks showing new signs of strength. Intel, AMD and Micron all firmly higher and oil pulling back. But WTI is still holding above$100 a barrel. And that takes us to our talk of the tape. Where is the market headed next following the first rate hike in more than three years? Let's ask Lisa Shalit, Chief Investment Officer at Morgan Stanley Wealth Management.

1:52And she is here with me at Post 9. Lisa, it is good to see you. Good to see you. Is today's market move indicative of just this new regime with regard to rate hikes? I think it's a relief rally. But it's a relief rally, as people have been able to digest, that the rate hikes are not coming simply from supply shocks. The rate hikes are a reaction to a strong economy. me. And the AI ecosystem trade, the CapEx, is not going to be slowed or deterred because we get 25, 50 or 75 basis points more hikes. So then why do it? What's the point? Well, I think that, you know, the Fed feels an obligation, the market box them in.

2:38They want to know that the Fed cares about trying to manage inflation. Whether they'll be able to manage inflation is another thing. But this is about conviction. It's about being independent. It's about following the data. The data has been strong. Looking through the, you know, windshield, as opposed to the rear view mirror, it doesn't look like the inflation numbers are going to improve anytime soon. And I do think the Fed acknowledged that with their guidance yesterday. So it was a credibility test. But then, you know, Wall Street consensus is that more hikes will come. So if you were an equity investor, what lens should you be looking at this through?

3:15I mean, should you be looking at inflation prints as a key metric here? Should you be looking at rates? Oil? Because it seems like they've become increasingly detached. They oil and rates were correlated. Then they got detached. Then they reattached. Then they reattached. Look, for us, what we're telling equity investors is focus on earnings. Right. Again, another 25, 50, 75 basis points is not going to derail this bull market. It's not going to fundamentally impact the pieces of capital spending that are driving this economy. So focus on earnings. Let the bond market be the bond market and the yields be the yields.

3:56The market's already absorbed this idea of another 50, 75, even 100 basis points of rates. That's what the curve is discounting today. So our view is don't get distracted by the noise. Focus on the signal. The signal is strong earnings. But at what point is it that inflation starts to cut into earnings? Because if, as you say, monetary policy is not the solution for inflation, at what point does that start to really show up in margins in a big way? Does it show off in credit quality in a big way? I think it does, but I think it shows up in pockets. Because I think that, again, big parts of the economy are interest rate and inflation insensitive.

4:40We've seen that with the margin improvement so far year to date. So do I think this is really bad for small caps? Yes. Do I think it's bad for certain consumer discretionary stocks that are very sensitive to commodity and input costs? Yes. Do I think it's not great for housing? Yes. A lot of that stuff is known. A lot of that stuff is obvious. But again, the pieces of the market that have been strong, I think, are going to stay strong. Do you think that the market has shown appropriate discipline thus far with all of the various cross currents that are affecting it? BTIG's Jonathan Krinsky saying he sees broad complacency out there.

5:23So there is an element of complacency when you look at index level metrics like the VIX. You look at put call ratios. You look at some of those things. But underneath the surface, there has been extraordinary differentiation. There's been extraordinary discrimination in valuations. We've seen the credit market actually, you know, quote unquote, punish some of the hyperscaler issuance and price it through the average IG spreads. So to us, we were very skeptical in January about complacency, about how concentrated the market was at 22.5 times forward P.E. Fast forward to today, we've got a 19.4 forward P.E.

6:13We've got a lot less concentration. We've got more breadth. We've got much better earnings revisions and earnings revisions breadth. So this is a healthier market where I do think there's discipline, albeit I understand why some folks look at it at an index level and say this is too complacent. We're looking at it at an individual issue basis, and we think that there's some very good dispersion of performance that's tied to fundamentals. And I know you've said that Wall Street is about to enter its, quote, silly season. Yes. Do you think that investors should then be taking advantage of dips and buying them and being fully invested?

6:53Or do you think this is more the time to hedge, given just the volatility you can see this time of year? Yes. So, look, what we always like to prepare, our clients are long-term investors, and that's what we encourage. We like to prepare folks when we see windows that could be extra volatile. Our position is always to try to have some cash to be opportunistic, but not to try to get too cute about hedging, not to get too cute about being defensive, trying to time these things. It's just not worth it in the long run. We're going up and to the right. And, you know, I think long term investors should should stay invested and stay put and ride this bull because it's far from over.

7:38Well, today we're certainly up and to the right. We'll see what the future holds. Lisa, thank you. Of course, my pleasure. Now let's bring in Invesco's Brian Levitt and Crossmarks' Victoria Fernandez for more on the markets today. Brian, speaking of kind of the structural bull market, you say it remains intact despite shifting interest rate expectations. Why and what are you looking for in terms of thwarting it? What thwarts it? I mean, at some point you would need an environment where either the hyperscalers are pulling back. You would need some bad bond issuance in those markets. You would need earnings being revised lower, disappointment.

8:16So we're not seeing any of that. We also don't have a very over-levered economy. I don't think inflation is as big as a problem as other people say. The expectations in the bond market are very contained. So those are the types of things you would be watching for. Look, at some point, all cycles end, and it'll end this one. I don't think it's going to end with higher Fed funds rate necessarily anytime soon or higher oil prices. It's going to end when something breaks in the AI trade, when, you know, again, a hyperscaler pulls back on investment or the market deems the amount of investment to be overdone compared to expected return on invested capital.

8:52But that's not the current environment that we're in. I do want to ask you, there was this Holtec IPO postponement that was announced today. That's a nuclear company. And one of the reported reasons for postponing their IPO has been just the pushback on data centers, concern around the AI space. And I wonder if that could be in the future a canary in the coal mine for other AI exposed offerings that are in the pipeline, whether it's SB Energy or OpenAI or Anthropica. I mean, we've been watching them really closely. And here we have one that actually has taken a step and postponed its IPO as a result of all the noise.

9:26Well, we are in an election environment, so we're in a very politically driven environment, and our lawmakers and those running for office are very focused on this right now. So the actual environment is not perfect for that. We'll see where we are in 40-whatever days. Is the focus still there? Ultimately, I think that these data centers will be built, these data centers will be built with concessions to different communities, or we'll find ways over time for them to be built more efficiently or with less water usage. So ultimately, this gets built. I think we're just in a moment right now. AI is having a moment right now where there's concern, there's pushback, there's a lot of not in my backyard going on.

10:09But I don't think that's the end of the story. Victoria, what do you think? I mean, would this be a big market moment if we saw more of these postponements, delays pulling altogether? Well, when we look, Leslie, at kind of what's been driving this economy. It is all of this AI related information, right? It's the CapEx component coming from that. It's the data centers. We've seen that rotation in the market and those sectors kind of take the lead previously. So if all of a sudden that's pulled away, I do think it gives the market a little bit of a pause. I think it's going to be time for people to say, wait a minute, if we're not going to have that tailwind to the market, who is going to step up?

10:44What sector is going to step up and take the lead if it's not going to be energy, if it's not going to be tech, and we're not going to have that capex, then I think you start wondering more about the pipeline that's coming with inflation, with higher prices. Then maybe that's going to have something that's more of an effect on the economy when you don't have AI capex to buffer that. Well, the question about that, though, is, is that a tail risk or is that a base case? And given where we are right now in the hyperscalers' intention to spend over the next few years, the fact that the demand for artificial intelligence continues to grow, the models continue to get smarter, and the cost of the models continue to decline, you can see demand go up pretty significantly even from where we are right now, particularly as we contemplate a move towards more agentic AI.

11:36And so the question becomes, does the supply capacity ever catch up to the demand? So when we think about data centers or we think about, you know, the political challenges around it, is that a tail risk? Yeah, sure. Is that the base case right now? No, I don't think that that's the base case. Is it a base case that demand will continue at the pace that it's been going? Because you have the leaders of these AI companies coming out and saying we need to slow the pace of development. I don't know what that means for CapEx. I don't think anybody does at this point in time because it depends on what the slowing down means for the end user.

12:12But has it become more than just a tail risk, given what we've seen over the last week or so? I don't think so. I mean, if you look at usage rates, so what percentage of businesses are deploying AI effectively, you're still relatively low. When you look at, you know, there's 8 billion people on planet Earth. What percentage of them are using agents? You're still relatively low. So demand for these things are likely to continue to accelerate. The models have gotten substantially better, substantially smarter. So I don't think we're putting that genie back in the bottle. And even if it were to slow here, we still have a pretty significant bill just to catch up with, you know, just the demand increase.

12:55You could see from billions of people around the world moving to agentic or agents working for them 24 hours a day, seven days a week. But, you know, an interesting component of that is if it does slow down, what does that mean in terms of the debt issuance that we're seeing from them, right? We've had this tremendous amount and there's a component of the higher yield story that it's coming from that, that competition for capital. If that pulls back, then I think you do have secondary effects in the bond market as well. And perhaps you actually see yields come down a little bit. So the question on that, so you look at the hyperscalers and you look at the capital expenditures that they've put forth and you compare it to the cash flow from operations, they still look quite healthy.

13:36And so, you know, the question on that with regards to what's going on in the bond market, if they're going to pull back, if we're going to slow down here, look, those stocks have been beaten up to some extent on concerns about what CapEx could be. Perhaps you might even see a little lift there. I mean, a company like Apple that hasn't invested is actually trading at a higher multiple. So I think it's a question of does this bull continue or is the cycle coming to an end? I consider this, you had mentioned cross currents. I consider this another cross current, but not how this thing ends. But Victoria, you're watching it for what it means for the treasury markets, specifically in the potential crowding out dynamic that we may have seen as a result of all of the hyperscaler issuance.

14:20Maybe if that does slow down a little bit, that could provide a better case for Treasuries. Yeah, if you think that that's one of the reasons that's pushing Treasury yields up, then I think it's a small component, but it is there for sure. And that's kind of when you saw everyone get really concerned when all that debt issuance started coming out and saying, wait, what's happening to free cash flow? What does this mean for these companies going forward? Obviously, they have huge balance sheets, But it does mean that there could be a risk going forward in terms of pulling back in that debt market.

14:51And then the demand that we have seen there, where does that demand go in the bond market? Maybe it goes back to treasuries. I don't know. We'll see. But it could have an effect there, a secondary effect. Thank you so much, Brian Victoria. I really appreciate your perspective. Big inflection point that we're in right now. So it's helpful to get your thoughts here. As the market does digest the Fed's rate decision, one big market voice says they should have done more. Here is what Double Line's Jeffrey Gunlock told Scott Wapner yesterday on Closing Bell. I actually would have dissented and voted to raise rates 50 basis points today.

15:30And I would have called that stun and done and give the market a little bit more of a truing up with the Fed funds rate. Here with his reaction, Alian's chief economic advisor, Mohamed Al-Aryan, good to see you. Do you agree with Gunlock? Should they have done 50? I do not. If anything, had they been in control of the outcomes, which they hadn't because the market had boxed them into a corner with a 92 percent probability of a 25 basis point hike, Had they been in control, I think the argument for hiking was really, really balanced. And I myself would have preferred that they don't hike.

16:15Do you think that the inflation picture is solved by 25 basis points? Or do you think that this was simply a credibility test, trying to see if the Fed did remain independent and what they would do in the face of a Washington, an administration that has pushed for lower rates. So the signal certainly is that this is an independent central bank. And the fact that the votes were 12 to 0 reinforces that message. Look, for all the talk about credibility tests, about inflation concern, If you really look at the 10-year and if you look at measures of inflation worries, they haven't moved that much over the last few days.

17:01They've been in quite a narrow range. And the reason is what you discussed earlier. Neither the credibility of the Fed nor inflation worries were the factors behind the surge in yields. The surge in yields comes from an imbalance between increasing demand, especially from the hyperscalers for bond financing, and fewer reliable buyers and holders because of what's happening in China, in Japan, in the Gulf countries, and in Norway. Right, the deglobalization extending to Treasury demand as well. You recently wrote in The New York Times that powerful forces allow the U.S. economy to bend without breaking.

17:44And that supports the conventional wisdom for investors to be fully invested right now. But do you see anything on the horizon that could break that trend? So I see three different characterization of the economy. One is a consensus. It's incredibly robust. It will mean revert all the time and therefore stay fully invested and buy every day. And that has worked well. The second one is saying, wait a minute, that equilibrium is getting more unstable. We're running down oil inventories. We're running down the balance sheets of the consumer. Be careful. And then there's a third element, which is the transformational transition that you just talked about in AI in particular, but also in geoeconomics.

18:31So the bottom line is that we have to get used to living in the in-between. And that's our reality for a while. There is no dominant scenario. And investors should expect a much wider range of possible outcomes. Does that mean you expect more volatility? I do. I expect more volatility and more dispersion because what we are seeing is structural uncertainty. So, yes, more volatility, more dispersion. Given all of this and what you heard from Chair Warsh yesterday, do you feel like financial conditions are tightening? I know he said that, you know, he was basically removing some accommodation in the 25 basis point hike.

19:12But how would you assess the financial conditions right now? Talk to anybody in housing and they'll tell you that not only are the financial conditions tightening, but they're already tight. and Chair Walsh has pointed out that there are certain places where financial conditions are tight and there are other places, and he points to the markets, where financial conditions are loose. And that's the issue for monetary policy. It's a very blunt instrument. And the worry I have is that if the Fed validates what the market now expects in terms of further hikes, at least three by mid-year next year, that would be really bad news for the economy.

19:54Why? What do you think would be the outcome of that? We would weaken the interest rate sensitive sectors, autos, housing. It would undermine the low income consumer and all that without really relieving any of the stress on the longer end of the curve because AI demand for bond issuance is inelastic. It's being driven by a historic CapEx cycle, and that's not going to be sensitive to the Fed's interest rates. So we've got to be careful not to use an overly blunt instrument. There are other ways of doing it. The most important would be, for example, either going after the choke points that are created, the higher oil prices and lowering the deficit to make room for this historic hyperscalation.

20:48Right. None of which is a monetary policy solve, of course. Mohamed, thank you so much. Appreciate it. Let's send it over to Christina Partsinevelis for a look at the biggest names moving into the close. Hey, Christina. Hi, Leslie. Well, Generac shares soaring after the company signed a long term deal with Amazon to supply backup generators for its data centers. Initial deliveries are expected to total just over$2 billion in 2027 and 2028. And that's how you're seeing shares up 18 % pacing for their best day since July 2025. Shares of Arm Holdings also popping after CEO Rene Haas, this is a chip company, told CNBC's Jim Cramer that he's increasingly confident that his company will meet its$2 billion revenue goal in customer demand for data center chips.

21:34That's why shares are up almost 8%. Last but not least, Paramount Skydance, Moving in the other direction, down about 3 % after Barclays reinstated the stock at an underweight with an$8 price target. Analysts citing growing financial and streaming growth challenges. The analysts also warned that the proposed merger with Warner Brothers Discovery faces massive operational risks. Leslie? All right, Christina, thank you. We are just getting started. Up next, sounding off, Palantir CEO Alex Karp fired up over the recent string of AI safety fears. What he thinks is really driving the debate will bring you his exclusive commentary.

22:11We're live from the New York Stock Exchange. You're watching Closing Bell on CNBC.

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23:04With higher predictability and greater access to credit, everybody wins. Get started at VantageScore.com. Some of the most important design choices are the ones that go unnoticed. The details that together make an experience feel intuitive, comfortable, and above all, exhilarating. At Acura, that means looking closely at how every detail can make your experience behind the wheel more rewarding. Every lesson learned and every idea refined becomes part of what comes next, and it lives inside every MDX, ADX, and Integra. That's precision crafted performance. That's Acura. There are three kinds of investors that listen to this show.

23:38Those protecting what they've got. Those looking for solid returns. And those swinging big. Most tools pick a lane. VectorVest doesn't. Every stock gets three scores. Value, safety, timing. You decide what matters most. Stop overthinking what to buy and sell. Go to VectorVest.com slash closing bell. Get 30 days for just 99 cents. VectorVest provides stock analysis tools, not personalized investment advice. Terms at VectorVest.com. Welcome back. Palantir CEO Alex Karp sounding off today on the growing course of AI fears. Our Kate Rooney has those details. Kate, this is, couldn't look away from this interview.

24:19It was absolutely fascinating. Yeah. Leslie, that's right. It was one of those wide ranging interviews with Palantir's CEO, Alex Karp. He is often outspoken. This was on CNBC earlier, squawking the street. He did argue that AI companies should bear liability for what they're building, as we, of course, talk about a lot of the AI risk lately, especially this week. But Karp did call out a liability and a risk that most investors are not talking about. You're assuming that there will be an S1. Okay, maybe there will be. The only way to deal with this kind of liability is to go to the government and say, nationalize us, please.

24:58You know, a lot of times in business, people don't say what they want. They're leading you to the conclusion. Every investor, and there are a lot of people who think they're going to make money. They're like, oh, the businesses are the mark. What is the first lesson in poker and in life? If you think the other person's the mark, you're the mark. You are the mark. And it will be nationalized simply because of the liability issues. Leslie, he also talked about things like data retention, some of the pushback around Anthropics customers on that particular topic, and then discussed how complicated it is to actually regulate AI.

25:37He said in part because, as Karp put it, seemingly everybody who understands this tech is on some payroll out there. So it's a complicated, nuanced way to do it. And the experts work for a lot of the AI labs. So you want it to be owned by the regulators. in theory nationalized, but it is still complicated to regulate it. I want to get your thoughts on the whole issue of liabilities and what it means for these types of companies, because the liabilities here, it's not a new issue. And these companies have gone through multiple rounds of private funding where investors have presumably done due diligence on the liabilities and the risks to the company.

26:15How do they think about them in Silicon Valley, especially as they underwrite trillion dollar valuation, potentially even a two trillion dollar valuation in an IPO for one of these companies. It's such a great point, Leslie. And of course, this company in venture capital and private markets has raised hundreds of billions of dollars, close to a trillion dollar valuation. Investors that I talk to are well aware of the company's stance on safety, the way it thinks about risk. And they've talked about the AI safety risk really from the get go. And the company has tried to make this their entire brand and tried to come out as the most safety conscious in the group.

26:54I would also go back to Karp's interview where he talked about Dario Amadei, called him shrewd, but also really complimented him in terms of regardless of what you think about his politics or the way that he thinks about safety. He's been very consistent and it has worked well with AI researchers. So he has been able to recruit the best researchers out there because he has done this and really done this in a consistent way that investors are aware of, that researchers are aware of, and that has boded well for Anthropic. He used this example of maybe they were number five starting out when it comes to AI models.

27:27They have launched to the top of the list in part because Dario Amadei has been consistent on his views on safety. Investors are well aware of it, although I don't think anybody that I've talked to in the multiple years I've been covering this company has even mentioned any idea that this company would be nationalized or that that is in any way the goal of this. I think Carp's point, too, was more about liability. The only way, given the immense risk that you're talking about, if this is really capable of wiping out humanity in the worst case scenario, the only way to protect against that, he is saying, would be to be nationalized, although unclear that the company wants that in any way.

28:03It would destroy a lot of shareholder value. I'm sure the venture investors listening to this, not excited to hear about that possibility. Yeah, I can't imagine the government taking on trillions of dollars in nationalization funding for these types of companies because you couldn't just nationalize one, presumably. You'd have to nationalize all of them. Kate, thank you. Yeah, the steel industry, I would say, Leslie, is a good one. Good analogy. That's a perfect analogy. Kate, thank you. Coming up, top tech analyst Mark Mahaney raising his price target on one Mag 7 stock. The name and what's behind the bull call.

28:39Closing Bell is back in tune.

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29:32Find becomes part of what comes next, and it lives inside every MDX, ADX, and Integra. That's precision-crafted performance. That's Acura. Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that. You get Google's AI built right into the premium versions of Gmail, Docs, Sheets, and more. No new tools, no extra logins, just one subscription that gives you personalized AI right inside your actual workflow. Make work less work. Try Google Workspace with Gemini at goo.gle slash workspace with Gemini. We are back on the bell. Evercore raising its price target on Alphabet today, pointing to a strong outlook for Google Search.

30:18Joining me now to discuss is Evercore's Mark Mahaney. Mark, good to see you. So you say that Google has actually strengthened in search leadership and that Gemini has gained share. What does all that mean for the fundamentals of the company? Explain kind of the flywheel effect that Alphabet generates from these types of trends. Well, let's not forget that search is still, you know, 50 percent plus of revenue and probably 70 percent plus of the profits at Google. So, you know, what happens in search really matters. We've gone through kind of a three-year trend here where we had like a U almost.

30:55We had a decline in market share for Google as a preferred search engine because of the phenomenal rise of ChatGPT. You saw that. We saw that in our data up through the beginning of 2025. But since then, it's reversed. And we've seen Google kind of regain share because Google search product got just dramatically better. Thank you to the competition from ChatGPT. And Google remains kind of the leader when it comes to kind of commercial search queries, You know, where do I first go when I want to plan a vacation or when I want to look for a restaurant or, you know, things like that. So they still keep that position.

31:31And then we've also noticed when we specifically ask about AI agents that Gemini has really kind of clawed back in a zone within like three points of ChatGPT. I mean, I think all of this competition is wonderful for consumers, but it's really important for Google because the stronger the search position on the platform, the better the ad revenue. And again, this is over 70 % of the company's profits. If there's a problem with Google search, there's a problem with Google stock. Our takeaway is there isn't a problem. In fact, their search position seems to be strengthening. How sticky is it? I mean, we've seen over the past few years the back and forth between OpenAI and Google search, as you mentioned, and the strengthening of the Gemini product.

32:10But what's to say it won't just flip back again and go back to OpenAI as it strengthens its search function? Yeah, it could. But, you know, that's I guess there's no nobody's guaranteed any leadership position. I mean, Google does have such a strong position to begin with. So, I mean, they could screw it up. But, you know, they've got enough talent in the company and enough financial incentives and enough pressure from Wall Street that they probably won't. But, yeah, these things can switch back and forth. We obviously saw that in the last three years. I'm just struck by the fact of how well Google was able to kind of counter Chachi and kind of get back to where it was before.

32:45Now, going forwards on Google stock, you know, there's a couple of things we need to look for. We need to see, especially with the dramatic rise in MetaMuse, you know, that's something where Google needs to get its game together. The Gemini Spark is just not as good, nearly as good of a product. They need to improve that. We need to get their next-gen Frontier model, Gemini 4, out. We don't know when that is, but sometime later this year. And then we need to see this real traction with TPUs, their chips. But all three of those, like, that's a product cycle. There's three product cycles. It's another reason why we like Google here as a stock, and we see something like 30 % upside to our price target.

33:22As we think about the product cycle, as you mentioned, particularly as it pertains to model development, how should we think about Gemini in light of the news this week, given the concerns broadly to slow the pace of model development? Google's DeepMind CEO supported this call as well. Well, yeah, all of these companies better make sure that they have safety barriers and bars around their products. And you also just need to have, I don't know, more sober, maybe somewhat mature management and some of the comments that have been made by senior management of some of these companies in the last, call it six to 12 months.

34:01I think Google has generally come across as pretty responsible. That's why they haven't also been sucked into a lot of the controversy here. But, yeah, you've got some very powerful tools with AI that need to be well handled. I thought there's a great example of a new product that was rolled out with a lot of safety features embedded was Metamuse. Google needs to make sure that its next version of its own product, Gemini Spark and Gemini 4, are also introduced in the same sort of consumer user safety first approach. I think they'll do that, and they've been able to do that in the past. So, yeah, the bar is high here for safety.

34:39So far, and what I've seen out of Google and Gemini over the years, they've been able to clear it. All right. Well, it's definitely something to keep an eye on. Mark, we know you will be doing that as well. Thank you so much for your help explaining your latest note here. Appreciate it. Up next, we are tracking the biggest movers as we head into the close. Christina Partz-Nevlus standing by with that. We were just talking about chips, but we've got some price hikes on AI chips, stocks on the blockchain, and a big bet on smart glasses. Three stock movers you'll want to see next.

35:1415 minutes until the closing bell. Let's get back to Christina Parts Nevelis for a look at the key stocks to watch. Let's start with Nebius shares, because they're up today after the company said it's going to raise prices, or specifically rates on a range of AI chips. The hike is going to be on-demand compute prices, including an increase of about roughly 20 % on several NVIDIA GPUs, set to take effect on October 1st. This is a neocloud, and so that's why shares are up almost 3%. Robinhood. Shares are also in the green after the SEC granted temporary exemptions to trade tokenized U.S.-listed stocks.

35:45The five-year innovation exemption allows qualified companies to offer trading in blockchain-based stocks, paving the way for potential future integration of digital assets to major markets, which would be a big move. And that's why shares are up about 4%. And SnapShares. Lower after yesterday's partnership with NVIDIA, AWS and Salesforce. It looks to really bring its augmented reality glasses to the enterprise markets. Shares were initially up well over 5%. We can see just really reversing course down about 1 % now. Leslie? Yeah, quite the intraday move there, Christina. Thank you. Up next, the trade on housing following the Fed's first rate hike in three years, plus a target cut for one beaten down food stock.

36:28That and much more when we take you inside the market zone.

36:38We are now in the closing bell market. Zone Mike Santoli and Palumbo Wealth's Phil Palumbo are here to break down these crucial moments of the trading day. Plus, Oliver Rennick standing by live from the CBO Global Markets in Chicago. Diana Olek has a read on housing from the annual Zellman Housing Summit in Boston. And Brennan Gomez is watching shares of McDonald's after a target cut by Citi. Let's start with Mike Santoli. Mike, kind of a relief rally after yesterday, huh? Yeah, I mean, often, Leslie, as we talk about, you get a little bit of a rethink the day after a Fed reaction. You did have the reversal.

37:13I think it got an extra little push by, you know, oil coming in. That allowed for a nice little rally in bonds, too. So Treasury yields coming a little bit out of the danger zone, above 5 percent for 10 years. And, you know, you had a pretty broad response, I think, for equity markets, too. It's very concentrated in terms of the magnitude of gains in the kind of AI hardware bellwethers. But it's about 70 percent upside volume. The S &P 500 vaulted above the level where it was right before the Fed decision yesterday. So you've gotten it back. That being said, I don't think you've really changed the overall trend of, you know, sideways for a few months here.

37:49A lot of parts of the market have gotten oversold. They're responding today. But once we got that opening pop in the S &P and a little bit of, you know, wobbling around that area, we've been flatlining for a few hours. So I think people are happy that this volatility opportunity has been sidestepped again with the Fed decision. But I'm not sure that it necessarily changes the overall setup heading into next week. And what's on deck for overtime today? Well, among other things, we have the deputy CIO for BlackRock for global fixed income. And he's going to tell us whether bonds at last actually have real value here at these yield levels.

38:26Interesting. We'll be watching. Mike Santoli, thank you. Now to Oliver Rennick at Sebo Global Markets in Chicago. Oliver. Hey, Leslie. It's been a fairly raucous session for a rally down here. VIX reversed in a hurry today after hitting the highest since July yesterday. And right now, at-the-money calls in the S &P 500 are going for about$2 higher than puts as demand for options takes a U-turn to the upside. Traders are ditching hedges and instead piling into big tech. Intel, arguably the stock of the week, options volumes three times the one month average, with bulls reaching as high as the 115 strike expiring October 2nd that still needs another 7 % plus to pay off.

39:10We saw similar activity in AMD, crowd strike to name a few. But then about an hour ago out of nowhere, SpaceX options lit up the tape with more than$600 million in puts likely sold on the session, mostly across a litany of trades expiring tomorrow that look on net to be a bullish $200 million position as the stock retakes$150 million. Yeah. Risk on, Oliver. Thank you. Diana Oleg is tracking the latest headlines in housing and joins us from the annual Zellman Housing Summit. Diana? Well, Leslie, a lot of housing data this morning. August housing starts, building permits and pending home sales. Suffice it to say that all of them are being hit by higher interest rates.

39:55And that's all anyone is talking about here at this conference. Now, the average rate on the 30 year fixed today came in at seven point one nine percent this morning. That according to Mortgage News Daily. I spoke earlier today with Pulte Group CEO Ryan Marshall, who said higher rates are a major headwind. And that's why the company is now pushing the move up buyer and focusing on Gen X, which is somewhat less rate dependent. As for the Fed's move yesterday, raising its rates, Willie Walker, CEO of Walker and Dunlop, he had a lot to say. The Fed raising by 25 basis points yesterday, it was consensus.

40:35So a bunch of smart people said, hey, we need to raise rates. But I sit there and look at what's driving inflation right now, price of oil. And oil and the 10-year treasury have been inextricably linked. And so as oil has gone up, so have rates gone up. And so they raised by 25 basis points. It's not as if the Iranians said, oh, great, now let's open up the Strait of Hormuz. It's a foreign policy issue. It's not a monetary policy issue. And so Warsh and the Fed went out and raised by 25 basis points. I don't know what they expect to accomplish. Walker also said he's concerned about a wall of shorter-term real estate debt coming to maturity, not so much because of higher rates, but because of what those rates have done to property valuations.

41:20We'll also have a live interview with, of course, Ivy Zellman to wrap up the day. That's coming up on Fast Money. Leslie, back to you. Great stuff, Diana. Thank you. Now to Brennan Gomez, who's tracking the move in McDonald's. Hey there, Leslie. Shares have been under pressure, hitting their lowest level since July of 2024, now down roughly 27 percent from its high for the year. Now, Citi cutting its price target on the stock this morning to 310 from 345 while maintaining its buy rating. Now, Citi saying U.S. same-store sales remain a show-me story. In its most recent quarter, McDonald's significantly lagged its peers in that key operating metric.

41:55The firm also trimmed its 2026 and 2027 earnings estimates, slightly citing those softer sales numbers. Now, investors' concerns turning to the company's next chapter. And McDonald's Investor Day is right around the corner. on Wednesday next week. Focus will be on value creation, menu innovation, GLP-1 resilience, and any details around the upcoming U.S. remodel cycle. Shares are down around 20 % year-to-date so far. Yeah, plenty of headwinds in the restaurant group right now, Brandon. Thank you. Now let's bring in Phil Palumbo of Palumbo Wealth Management. Phil, good to see you. Look at a tape like this.

42:30Is this what you were expecting after yesterday's decision? Yeah, so I think what happened is the Fed finally built some credibility. We cut interest rates. That's what was expected. But the market needed to see that he's serious, that he's independent, and he's going to try to do something to control inflation. That's why we saw yields come down. I kind of disagree with what the gentleman said before. I mean, oil is passing through the economy, which is a problem, and it's keeping inflation up higher than we want it to be. Then you have tariffs. Then you have AI hardware. Then you have computer hardware.

42:55All of that is bringing services up and the good side of the equation. So a hike and rate shows the Fed is serious. The big question is, is this going to be a long-term hiking cycle, or is it one and done or two and done? And that's a big thing that we have to wrestle with as investors. What do you think? I believe it's one and done, two and done maximum, because I don't think we're in such an inflationary environment that we have to be concerned about like the Volcker years. So because of those reasons, I don't think it's going to be this long, long interest rate cycle where you have to hike aggressively to control inflation.

43:26Inflation's not spiraling out of control. So for those reasons, I believe it's going to be a short cycle, one and done, maybe two and done. And given that, would you say that now is the time to be potentially hedging more in certain rate-sensitive areas? Or given the market's resilience and the reaction today, do you feel like it's maybe not even necessary? Yeah, well, the past couple of years as a firm, we reduced duration in fixed income. So that's our way to hedge out our concern about yields rising. The second thing is putting on hedges here on the equity side of the equation in the event that the Fed gets aggressive with hiking interest rates, are two things that investors can be doing to protect downside risk.

44:06In terms of diversification, we talked about energy. We talked about the AI build-out. How difficult is it to get true diversification in this current environment? It's very difficult because if you have rates up, you have stocks down, right? You have stocks and bonds going down together, which has kind of been the case really since 2022. So we build out multi-strategy hedge funds, incorporating option strategies to protect downsides, shortening duration, incorporating private equity to the portfolio. When you incorporate those other asset classes that have lower correlation to traditional stocks and bonds, that's really how you build diversification.

44:41Plus, owning high-quality risk assets are really important because they'll survive through any major downturn if it were to happen. And you like opportunities with Costco and Meta specifically. Yeah, so Meta is the king of social media, with 3.6 billion people that click on their apps every single day. Their spending in AI is coming through. You can see it in top-line revenue and ad spending at 27%. Top-line revenue for the company is 28%. Impressions are 14%. So you're seeing their spending working. Plus Muse, which is a product that is really positive reviews. If you look at it right now, that 4.9 in terms of reviews, There's over 2 ,000 people that reviewed it in a very positive way.

45:22So Muse is an investment you're going to see come out. I think it's going to be like an optionality in owning Meta. And then Costco is Costco, right? It's the most stable business, I think, out there. If you look at their membership, there's a 92 % renewal, 10 % growth in that. Same source of comp sales at 6.6%. So for Costco, it's off its high 12%, 13%. It's trading at valuations we haven't seen in a very long time. It was a forward multiple of 60. Now it's around 39 times. So we think Costco is very attractive, which is part of our core performance. Interesting. Gas prices are expensive. Rates are going higher, essentially.

45:58Those are two names people can look at. Carl, thank you so much. Thank you. Important day here. Looking at the sector moves, the clear standout for the day is information technology of about 2.3%. Financials. The lag are here down about 1%. But you can see the moves in the NASDAQ really leading. to the upside. That does it for closing by Let's Unin to Overclass with Marissa Lee and Mike McCoy.

46:48That's precision crafted performance. That's Acura.