Nvidia’s Rough Week… And Why Users Start & Stop GLP-1 Drugs 1/31/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. Under pressure, NVIDIA shares sinking over 15 % this week as deep-seeking trade fears roil the semi-sector. Is this finally the start of the great rotation out of tech? We'll debate that. And a new study into the reasons patients stop and restart using weight loss drugs. We'll talk to the lead author to find out what it could mean for the GLP-1 market. Plus, shares of deckers get decked after earnings. The chartmaster lays out his potential breakout stars. And the NASDAQ 100 turns 40.

0:35how the index has changed over the years and what it says about investor appetites. I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Courtney Garcia, Dan Nathan, and Carter Braxton Wirth. We're going to get to the NVIDIA sell-off in just a moment, but we do want to start with a sweeping announcement from the president that sent stocks sharply lower late in the session. Trump confirming the tariffs on Canada, Mexico, and China will go into effect tomorrow and promising levies are coming for chips, energy, and metals. CNBC's Megan Cassell has got all the latest.

1:04Megan. Melissa, we just finished hearing from the president from the Oval Office, spent about 30 minutes talking to reporters and clarifying his views on all of these points, saying that, yes, those tariffs will be taking effect beginning tomorrow. It's going to be 25 percent on Canada and Mexico, 10 percent on China. He says it's going to be entirely because of the flow of fentanyl. He also said, quote, we are not looking for a concession, suggesting that at this point there is nothing left that any of the three countries could do in order to escape those tariffs taking effect within 24 hours.

1:34He also said the tariff rate could increase substantially, but it also could not, leaving the door open for some changes there. He also said that on Canadian crude oil specifically, he would probably reduce that tariff rate to 10 percent. All other Canadian goods will see a 25 percent tariff, but Canadian crude is likely going to see only a 10 percent tariff. He then spent a lot of time talking about many more sets of tariffs that he is considering that are likely to take effect in the future, specifically on oil and gas. He says around February 18th, they're looking at putting tariffs on oil and gas from all countries.

2:07It sounds like he also mentioned chips and things associated with chips, steel and aluminum higher than he imposed in the first term. He also said copper, but said that one would take a little bit longer, presumably because it requires an investigation. And then he spoke about various forms of medicines and pharmaceuticals that he wants to see tariffs on as well. He also was asked whether he's thinking about putting tariffs on all goods coming in from the European Union? And he said, absolutely. He sees a lot of issues with that trading relationships with the EU. So more to come on that front as well.

2:37And then finally, he was also talking a little bit about any reaction to the tariffs. He says that he's not concerned about market reaction to these tariffs. He says tariffs don't cause inflation. In his words, they cause success. And that while there could be some temporary short-term disruption, people will understand that, Melissa. So a whole lot there to sift through on tariffs. And then just one final headline to bring you, since we just hit 5 p.m., CBS News is reporting that Trump officials are putting a pause on most federal government websites beginning now at 5 p.m. We are seeing some beginning to come down, presumably that's so those agencies can begin to scrub their websites for anything mentioning diversity, equity and inclusion.

3:14So more to watch on that front as well, Melissa. Megan, thank you. That was a lot. Megan Casella from Washington, D.C. By the way, Trump also said we'll be doing something very substantial and terrorist with the European Union. So we are seeing sharp reactions in the currency markets to a lot of these headlines, peso, Canadian dollar, as well as the euro taking a hit on the back. But what's your initial take here? We sort of knew this was going to happen. We didn't know it was going to happen in quite this way. We didn't know it was going to. But here we are. We didn't know Saturday. We heard March 1.

3:45I thought March 1 was the headline this morning for Canada and Mexico. Actually, we started to digest that yesterday. China, we've had this number out there. 10 percent on some level has already been in the market and already kind of a relief. The concept of this being to reverse flow of illegal immigrants and illegal drugs is, you know, one way to get going on it. I mean, there's a lot of different rationale out there from the administration as to why these things are happening. Ultimately, it's really about a competitive balance that they believe anyone who's in deficit, we're in deficit, too, should be tariffs put on them.

4:16It's interesting to think about the currency markets because going into this, you can make an argument that the U.S. dollar was already strong and that there was a lot of pressure actually potentially on multinationals in this country because of the stronger dollar. We started to hear about that in earnings season. When I hear that, at least at this stage of a cycle, it doesn't really bother me as an investor for a lot of these companies. But for the European Union, which had a 25 basis point cut this week, ECB, if anything, was rumored to maybe they could go more, they will go more. I think we're breaking parity here.

4:45And I think and I think it will be just to be clear, I think that will be a mitigating factor on inflation. I think a stronger dollar certainly will have more buying power and be helpful. But we don't really know what the impact of all this. And it's just interesting to see how quickly tariffs have come back into the market, which closed on the lows today. But think about where we were a week ago. Yeah. So, you know, he said that he doesn't expect the markets to be affected and that it's not going to affect inflation. I'll just make this point. We just got this GDP number at two point three percent.

5:11This is after two consecutive 3 % GDP prints, you know, quarterly. And so the economy was kind of limping in to the end of the year. I think expectations were higher than that for Q4. So one of the things we can be fairly certain on, if these sorts of tariffs stay on some of these key industries, it is going to weaken economic demand here. It just will. And so at the end of the day, you know, the president uses the stock market as a report card. But if the economy starts to weaken, the S &P is going to start to anticipate that. I mean, the dollar obviously is such an important thing. The sector, of course, or the area of the market that has the biggest exposure is tech.

5:45I mean, bar none, right? So obviously the big consumer staples, the big energy names. But technology is the highest sort of exposure to a weak or strong dollar. And it's no nonsense when the S &P is doing one thing, but the tech now down on the year. You've got semis struggling. And I think a lot of it has to do with not only the great appreciation that preceded this start to the year, but the dollar. Right. Yeah, and I think a lot of this, too, people were wondering, are the tariffs just going to be negotiation tactics or are these actually going to come on? And clearly we're seeing these are coming on.

6:16And this is why the bond markets have been pricing in inflation. I mean, this, whether it's tariffs, whether it's tax cuts, I mean, a lot of these are inflationary policies. And that is why markets are concerned about where inflation is going. So they're optimistic about deregulation. They are worried about inflation. Markets are kind of up and down as they're trying to figure out where that's going to go. But I would expect that's going to continue to affect the markets as this news continues to come out. I mean, we've been thinking about oil and gas and commodities and so on in terms of the impact of tariffs.

6:43But when you think about pharmaceuticals, you know, you think about the inputs into drugs that are manufactured here in the United States, but the inputs come from abroad, that's where you start thinking maybe we have not yet really fully digested the impact of tariffs and the ripple effects that it can have across several different industries. Well, and that's it. And we hadn't really heard a whole lot about the impact for health care, but certainly for pharma specifically. And so that's part of where the market's uncertainty around really what's going to what's coming next. What kind of teeth will there be attached to this?

7:13You know, the other side of what we were hearing before we heard about starting Saturday with Canada and Mexico is that, OK, there'll be some offsets. There's going to be a lot of trading going on between the lines and that, you know, maybe the headlines will be busier than than actually the reality of this. So I get back to markets, which today also had to digest a PCE number, which most people know is a big a big number for the Fed to follow, which came in significantly higher. against all relative than expected. So to the extent that inflation is something that we're still fighting, we had a Fed this week that pretty much kind of said as much.

7:44They argued that the change in the language was really just to clean up the statement a little bit. But the reality is inflation is still an issue here. And markets, especially the part of the market, Carter's referring to the tech world. I mean, let's be clear. Mega cap tech should be the most insulated from inflation here. And that is what seems to be struggling. Yeah, let's talk about that here. because NVIDIA really closed out a rough week here. The stock unable to rebound from Monday's deep-seek scare. It is down nearly 16 percent since then. That is its worst week since September 2022. NVIDIA now off more than 21 percent off-record highs.

8:19Hit the start of the month, putting it firmly in bear market territory. But while tech and semis put pressure on the broader markets, there were some winners here on the week. Communication services, staples, health care, financials, posting solid gains. We saw this on Monday, too. We saw good breath in the market outside of technology. So is this the start of a rotation that may stick here, Carter? Well, the one thing about communications is they change. We know as AT &T and Verizon, what they got in there is Google, Netflix. Those are tech. So certain tech, let's just call it tech, is holding up well, whereas semis and AI and some of this stuff is struggling.

8:52So a very mixed bag on that score. But it is important that the things that really led us are starting to churn and struggle. Yeah. What do you make of the sort of rotation that we saw this week? Yeah, and this is really what we've been looking to do the last several months. I don't necessarily think that there is some downturn that's coming in tech or AI. I think some of this that's happening with D.C. is probably a little bit overblown here. But I do think you want to be looking at those other areas of the market. You want to be looking at things like banks and things like cyclicals. I think a lot of those are going to continue to do well here.

9:22And I think when you look at AI, especially with the news this week, if it really is as cheap and as quick to create as they're saying, And I know there's a lot of questions about that. The way to play that is with the other 493 stocks in the S &P of F100. If it's going to become much more accessible to these other companies, it's going to really increase productivity. It's going to make them much more efficient. Yes, it might be a longer term play, but I think it's going to be a good thing for the markets in the long run. But the overall market is not just those seven companies. And by the way, it's not just DeepSeek on NVIDIA.

9:49It's tariffs, right? So if they have faced further curbs in terms of the kinds of chips they can sell to China and their revenues will be limited in that respect. on top of the DeepSeek scare. I mean, there are a couple of reasons why you might be scared. Yeah, and before DeepSeek, we were already starting to wonder if there was an overbuild as far as infrastructure is concerned. A lot of these companies that actually need the chips and are building out the data centers, I mean, they had been ordering fairly aggressively. At some point, you're going to see a drop-off in that order. We've already seen deceleration of growth in NVIDIA.

10:16I mean, a lot of folks have been waiting for this in NVIDIA. And again, down what, 20 %? You just said from the highs. You know, go back to last summer into early August. NVIDIA was down 35%. So this is kind of the run-of-the-mill sort of move for NVIDIA, except this time it really does seem about something fundamental. The last time it was technical. It was momentum-driven. It was very crowded. I think since then we had some of the guys like Marvel and Broadcom join the party because some of NVIDIA's largest customers had been contracting with them to make specialized chips for products and services.

10:48That was always going to happen, right? What we didn't see is AMD and Intel join the party, right? So the semi-trade was very, very narrow. The last thing I'll just say is that, you know, Microsoft and those results, I mean, we haven't even mentioned that yet. Down 6%. It's been a massive underperformer. Microsoft was one of the early beneficiaries in the stock market early 23 from their partnership with OpenAI. So think about everything we learned here. Maybe these hyperscalers don't need as many chips to train the models and make new models. All right. So that happened this week. Then we have a situation where OpenAI and Microsoft, their relationship has been fraying a little bit.

11:23OpenAI is a big customer of Microsoft's Azure cloud, right? And so at the end of the day, you know, there's definitely some push and pull there. Last thing, OpenAI is in the market to raise tens of billions of dollars right now that SoftBank is supposedly going to kind of leave. So a lot of things, a little bit for everybody. To me, it really feels like this trade is cooling a little bit. And in terms of rotation, which is obviously always a part of markets trying to figure out where you can win or deliver alpha, the biggest single rotation in your data, of course, is Europe, right? And that's value, right?

11:52So you're talking about the stocks 600 in Europe, our equivalent S &P, is a 15 PE. It's up 7.5%. The DAX, the big player, Germany's up 8.5%. And so there's very little tech there. There's very little AI. There's very little anything except big, heavy industrials, banks, energy stocks that have lagged. And money has gone there. That's the biggest single rotation going on. I agree with that. I run an international ETF. I mean, I see the European banks with, I think, balance sheets that are as good as the American ones. People think that Europe's a mess. It is in terms of the public side of it. But again, the private banks, even though you can argue Deutsche Bank is a quasi sovereign.

12:26The end of the day, ECB is probably still the place you'd be most worried. European banks are paying high dims. They're cheaper. SAP, Siemens. I mean, think about the industrial spot across Europe, which has underperformed over the last couple of years. Remember, the underperformance of the Mag 7 or at least the top five tech companies in the world is partially a partially at least what was a big impact to the headwinds on investing around the world. Again, there was a crowding out effect. So I like that call. I continue to think that you could look all the way back to March of last year and say semi's peak there.

12:57I mean, outside of NVIDIA, you could look at AMD. I mean, AMD has hurt a lot of investors over the last 18 months. It happens to be the A in band, by the way. So it may be a different year. But anyway, I think it's a fascinating time. You wanted broadening. You're getting it. All right. Meantime, well, stocks ended the month on a down note. Our next guest says the markets and Fed are overly sanguine on growth and overly pessimistic on inflation. Jack Genesiewicz of Natixis Investment Managers joins us now on the Fast Line. JJ, great to have you with us. A week ago, we didn't have all this cascade of tariffs coming down the pike on Saturday.

13:31We didn't have the deep-seek scare. Does your view of the market change? You know, I think you still have to look at the underlying dynamics here, and the fundamentals of the U.S. economy are still very strong. You know, and we're looking at nominal growth coming in probably closer to 4 % for the full year, slowing from 5%, and that's still above trend levels. And so when you think about that backdrop, that's still pretty good for, I think, corporate earnings here, and that's still what it all comes down to. So look past a little bit of this geopolitical noise, and really the underlying story here is the foundational economic backdrop for the U.S.

14:04economy is still pretty robust. I completely get that you can say it's noise. I mean, the ExxonMobil CEO on the conference call actually said, you know, tariffs are just speculation that it's been driven higher by the media. So there is that point of view. But corporate earnings, in some respects, I mean, it's backward looking. Granted, the guidance is forward looking. But right now, the snapshots that we're getting is the reflection of an economy that is a capsule in time that is no longer the economy we now have with tariffs in place. How do you interpret the impact of tariffs, even if it is in the next three to six months?

14:37Because the next three to six months impacts the guide that companies are giving now, as well as a guide for the rest of the year. And that's going to be a wild card, I think, going forward, right? Because, you know, we've heard starts and fits, right? On day one, we were supposed to get tariffs. We didn't. Then we were going to see Columbia being tariff. Well, they backed down on that one. You know, then it was, well, March 1st. Now it's February 1st. So, you know, a lot of this is still a lot of headline news coming out. So it's really difficult, I think, to really adjust portfolios here because the bottom line, tariffs are still probably going to be a negotiation tool.

15:08You're going to start high, ratchet it back down until you get something. But that number, if we end up having to implement tariffs, probably going to be something much lower and maybe less impactful. So I hate to say it, but you almost have to be reactionary with some of this stuff rather than proactive. And Jack, this is Courtney here. Thanks for coming. I'm curious about your outlook on inflation. Right. So you actually mentioned here that people are overly pessimistic with inflation. And I'm curious here if inflation kind of stays where it's at. We have this higher for longer rates. They're not going up and not coming down from here.

15:36Do you see that as problematic or can the economy continue to do well with where rates and inflation currently are? You know, I think we're in an OK spot. You know, I certainly would like to see rates continuing to come down something closer to the low fours or the higher threes with the tenure. But when I take a step back and look at the inflation backdrop, I think the big picture level says it all. Right. And we're seeing the labor market slow. As a result, you should expect to see wage growth continuing to come down. And then, you know, from that perspective, where do you get the demand pull from?

16:08And then you start looking at what's going on with regard to housing. You know, you look at all the real-time indicators, and that continues to come down. So between those two things, I certainly have a hard time seeing inflation reaccelerating. Maybe it comes down slower than expected, but I think it still heads lower. And that, I think, you know, basically plays to the idea that maybe we should be expecting more cuts than hikes in here over the rest of 2025. Jack, great to speak with you. Thanks for your time. Appreciate it. Thank you. Jack Janosiewicz, do you agree with JJ? Well, you know, cuts as we get back into the second half of the year may be a reality.

16:42I mean, the Fed's going to be watching the labor market, you know, laser focused on the dynamics that I think looked kind of weak last fall, which put the 50 BIP moved out of the gates. I think the markets right now are certainly trying to digest where we've had a tremendous headwind from things that we just don't know about. I think this week shook markets to their core. You had a challenge, at least to the whole ethos around the chip world and the infrastructure spend around it. You also had dynamics around tariffs that we didn't think. I also just think the strategic war with China as it relates to chips, how important companies like Taiwan Semi are in the global sphere and how worried we should be in the U.S.

17:19if some of these things get a lot worse. That's what this week was about. We came into this week feeling almost breathless and without any concern. And, you know, welcome to reality. Yeah. You know, listen again on the inflation stuff. If tariffs come in and they stay here and they cause the economy to weaken, inflation is going to come down. I mean, like that's just going to happen here. And again, you know, we were worried about stagflation. But look at the numbers that we put up last year with inflation on a cumulative level still pretty high. So at the end of the day, you know, we went from talking about rate hikes maybe in the back half of this year to possibly going back to if I'm looking at the CME FedWatch tool, I'm looking at June.

17:55And it's still pricing about a 50 percent probability of four and a quarter on the upper band. So that would be another 25 basis points. You know, like it's a coin flip. So at the end of the day, I just think that inflation probably topped out is my guess. And, you know, now it's up to the economy just to try to hang in there a little bit. Coming up, more on tariff turmoil in the energy sector. Oil closing out a losing week and two energy giants commenting on the moves in their latest earnings reports. More on that next. Plus, hitting the deck, the parent company of UGG and Hoka plunging despite raising full year guidance.

18:27The details on that disconnect right after this. This is Fast Money with Melissa Lee, right here on CNBC.

18:44We've got breaking news on charges against a former Fed official. Steve Leisman's got the details. Steve. Thank you, Melissa. Yes, the Justice Department just the last hour charged a former senior Federal Reserve official with conspiracy to commit economic espionage. The justice says a 63-year-old John Harold Rogers is alleged to have passed, quote, sensitive trade secret information from the Federal Reserve to co-conspirators in China. Rogers was sent specifically to solicit briefing books for governors, proprietary data sets, and sensitive information about FOMC deliberations. Apparently, he printed this info out or sent it to his personal email in violation of Federal Reserve rules in preparation for trips to China.

19:27Rogers allegedly made false statements to the Federal Reserve's inspector general about accessing and passage of this information, as well as an association with co-conspirators. He worked as a Fed senior advisor in the Division of International Finance from 2010 to 2021. These alleged actions ran from 2013 to 2025 in the indictment. says that's even after he left the Fed. The Justice Department says the info was passed, that Roger's past was, quote, economically valuable. They went on to say that the data provided could allow China to manipulate U.S. markets. He provided info, quote, under the guise of teaching classes.

20:09The indictment cites two unnamed co-conspirators who worked, who the indictment says worked for the Chinese intelligence apparatus and presented themselves as graduate students. He was paid$450 ,000 in 2023 as a part-time professor at a Chinese university. The Fed declined to make any public comments about this, and the Federal Reserve Inspector General, who was involved in this but is quoted in this, could not immediately be reached for comment, Melissa. Wow. Steve, thank you. Steve Leisman. Pleasure. A pair of oil giants dropping after their earnings reports this morning. Chevron missing Q4 profit estimates with the company's refining business, posting its first loss in four years.

20:46Meantime, Exxon beating on APS but coming up short on revenue. These moves coming as President Trump plans to put tariffs on oil from Mexico and Canada starting tomorrow. What did you make of interesting moves here, especially Exxon Mobil? Well, I thought the moves in the stocks were very overly sensitive to the refining margins and the refining misses because Exxon is the same thing. The upstream beat, first of all, the free cash flow beat in both places. And I still think that that's what you want to be most focused on along with CapEx if you're an investor in the integrated. I like the European ones even more.