S&P 500 Nears Record High… And A Flex In The Weight Loss Drug Space 6/24/25

0:00Live from the NASDAQ market side in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. Markets in rally mode. Major indices closing back in on records. What's behind this move and can the good times keep rolling and rocking higher? We'll talk to the CEO of Small Cap Biotech's Scholar Rock about how he's taking on the weight loss space and how its new drug is working with the big flyers. Plus, FedEx doesn't deliver in its latest earnings report. Payment stocks power up after weeks of weakness. And as temperatures soar across the U.S., a look at the stocks keeping the grid running.

0:30I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Dan Nathan, Guy Adami, and Danny Moses, founder of Moses Ventures. We start off with stocks surging again as investors hope that a ceasefire between Israel and Iran will hold. The S &P jumping more than a percent, closing less than 55 points off its intraday record set in February. The Nasdaq 100 actually setting a record close. And while the Dow has a little more ways to go, that index still ended the session at its highest level since early March. Meantime, oil prices plunging another 6 percent today, now below$65 a barrel.

1:02The move weighing in on energy stocks, which was the worst performing sector in the S &P once again today. And take a look at Treasury's. The yield on the 10-year hitting nearly two-month lows. Markets seeming to think the Fed is still on pace to cut rates soon. For more, let's bring in CNBC's Steve Leisman. Steve did Fed Chair Powell, in his testimony today, give any belief that that was the case. It sounded like it was not, that it was completely off the table and that it actually was contradictory in some ways to what Waller and Bowman have said in recent days. You know, Melissa, sometimes I think the market is like Jim Carrey when he says, so you're telling me there's still a chance.

1:44I did not get that impression on day one of his two days before Congress, sticking very much, I thought, to his view that tariff inflation is likely coming and the Fed should wait to see how the effects of the broader economy work out before it cuts rates. Here's what he said. We haven't fully restored price stability and another shock. We have to be careful if there's a meaningfully large and sustained inflation shock. We have to be careful about that. And so, you know, I think we're just trying to be careful and cautious. So you're telling me there's still a chance. Powell said he expects tariff inflation to show up in June and July.

2:23Note those two months that he's looking at. But the Fed could adapt policy if that doesn't happen. He noted that the most officials still have two rate cuts built in for the year. So it's just most officials think that inflation is going to get to a place where it'll allow them to cut. And by the way, markets went up and bond yields rallied. But Fed futures continue to trade very much along the lines I just laid out. July, probability still at 19 percent, but more confidence now in September and December, up north of 80 % for both of those. Obviously, the two Fed governors said they could see a rate cut in July, but several Fed officials joining Powell today in saying the Fed should not be in a hurry to cut until it understands the impact of tariffs on inflation.

3:03I'd point out again, if you didn't know, Melissa, that seven Fed officials in the forecast last week said no cuts. Nine of them, which is a majority, almost a majority of the committee, said only one cut. It was interesting to hear Barr coming out, and that's who you're referring to, I'm assuming, saying that they will have to wait, that they're in a good position to wait and see what the impact of tariffs are on inflation. It almost seemed like he was falling in line. And I'm just wondering how unusual, if it is unusual, to have Fed governors speak just days before the chairman, indicating a different stance from what the chairman was expected to say in testimony.

3:45I think it's pretty unusual. There are different reasons why they might be speaking. We can talk about those. But it also may be that that's what they think in terms of where they think things are going. They have this idea of looking through the possible inflation. In other words, they're not arguing there won't be inflation. What they're arguing is that Fed policy can look through it now and not be restrictive. I don't think that's an argument that is bought by the majority of the Committee. But it is something that's not a crazy idea. If the Fed cut in July, I think it's not possible, Melissa, if you think about the idea, put yourself in July, let's say you do get a bump up, a meaningful bump up in inflation from the tariffs, that the Fed chair steps to the podium says, yeah, inflation is 3 % and we cut a quarter because we're looking through it.

4:37Remember, Powell needs to talk tough now in order to make sure there isn't inflation on the backside. He keeps saying it's our responsibility to make sure that one-off tariff inflation does not become a broader inflation problem. That's part of what he's doing right now. Steve, given all the information we all have the same access to, cutting rates, what poses the greatest risk? Being too early or being too late in your opinion? I think being too early. I think that you want to see the inflation and what's going to happen to it. For example, my first reaction when the May inflation report came out was that there were indications of higher prices from tariffs.

5:21What there weren't were indications that those higher prices had bled into other areas. You still have the service inflation coming down. You may have some help from housing and there's an offset there. But look, we don't know what the president's going to do July 9th. We're waiting for the employment report July 3rd. The chair did say that labor weakness would be something that would change the calculus. Then you have an inflation report July 15th. So there'll be more of that information that you're talking about right there that will help the Fed make the decision and probably make it more clear what the Fed should be doing.

5:55Steve, great to see you. Thank you so much. Thanks, Melissa. Steve Leisman. So what do you make of the market reaction in particular? The move or very little move in bonds in yields. That is yields came down a little bit. Dollar came down a little bit during his testimony, Tim. I think it tells you what the first of all, the lack of volatility in the bond market is something I think the equity market loves. And I think the fact that you're somewhat range bound here in terms of the 10 years, not terribly surprising because, again, inflation expectations haven't really changed. They've been kind of in line.

6:25I would even look at the, you know, the deck Fed fund futures. and we've moved about nine or 10 basis points in terms of the short end of the curve. So it's not like you've suddenly priced in runaway. But I thought Powell today, unofficially, of course, ratified the Fed speak of the last few days and certainly Waller and Bowman. And I think this is a case where when he's asked in question, hey, could you guys move in July? And he says something along the lines of as long as inflation measures stay contained, that gives the market all they need to know. And again, war is war and it's awful. the market is more focused on the Fed and has been for the last three or four trading sessions.

7:02I think that on the margin, he was a little bit more dovish, actually. And the reason I say that is he's basically saying if I get lower inflation rates, which is what he's been saying, but we get one this Friday, PCE, right? We have Fed minutes July 9th. Normally, that's a nothing burger. You know, it already happened in the past, but you get a better idea what was talked about in that meeting. And my whole thing is this. The meetings are every six weeks for the Fed. So if he doesn't do anything, he can go 50 basis points the next meeting. So I'm with you. I wouldn't cut yet because we don't have enough information.

7:29But he basically said he would have already cut 100 basis points potentially. That would be what would be built in if it weren't for the tariffs. Yeah. To your point, we have CPI July 15th and we have the Fed meeting July 30th. And we know that the favorite thing. Are you going to be in Jackson Hole late August, guy? I won't be the big Fed confab there. And that has been historically something where you see a bit of a shift. Messaging. Yeah, messaging. And Tim just mentioned what we've seen in the CME FedWatch tool you've seen. I think it was pricing in maybe at 14 percent or something like that.

7:55Now it looks like a 20 percent of a 25 basis point cut at the July meeting. I mean, there are a couple scenarios where you can see a slightly more dovish tone here and there, a little bit more pressure from some of these other Fred governors. And then all of a sudden it looks like maybe it's a toss up. You know, what will the stock market be discounted, though, at this point if we're at 6150, 6200 or something like that? It might be a bit of a sell the news. And then you have to go back and say, what are the reasons in which they're doing this? Last year in September they were doing it because they were worried about the jobs market.

8:23You know, Guy and I just had a conversation with David Rosenberg, Rosenberg Research, Rosie. He thinks there is considerable weakness in the housing market, in the jobs market, that is not being reflected in some of the data that we've seen. And you may say, well, he's, you know, does that from time to time. Well, he's done it a couple times from time to time, as long as I've been following him, when he's been actually spot on, when no one else has actually recognized some of the things that he's doing. So, again, the jobs is going to be important, some of the inflation data. And he's not even worried about inflation, by the way.

8:49He just thinks some of the underpinnings of the economy are pretty weak. How would that weakness be masked? Well, I mean, he'll break down just some of the data as it relates to what the Fed chair is saying about the employment picture and what he sees below in some of this sort of softer data, if you will. And he thinks it's going to become hard data in the not so distant future. The home builders suggest exactly that. But getting back to the market, I mean, 400 points ago, Tim on the show said the pain trade is going to be higher. And here we are with 50 handles away from an all time high. I mean, that's clearly been the case.

9:18But, you know, at what point? Clearly not now. But do valuations and potentially a slowdown matter? Because we have gotten ourselves back to 23 times next year's earnings in terms of the S &P 500. We just heard from FedEx. I'm sure we'll talk about it. The home builders suggest something else is going on. A variety of retailers are telling a similar story. I just think the market, just in terms of risk reward and being expensive, is at the wrong end of the ship right now. For Warren Powell's testimony, how the Middle East conflict factors into the Fed's thinking, let's bring in FedWatch Advisors founder Ben Emmons.

9:52Ben, great to see you. I first want to ask you about bond yields being at 4.29 on the 10-year. And I'm just wondering because we saw this is a day when the markets rallied. We saw oil come off precipitously. All the risk premium got taken out of the oil market at this point. And we didn't have much of a move in the bond market. So at this point, is it really the Fed and the notion that there will be a cut very soon that is holding bonds in place? I think so, Mel. It's a good see as well, because, you know, Powell did open the door, I felt, for the rate cuts. You know, at the press conference, he was a bit more stern about it.

10:26But in this testimony, he sort of outlined the paths and how it can get to these rate cuts and that he sees this tariff really the reason why they're holding off. He also quantified that if there were no tariffs, then rates actually could be as low as 100 basis points from here. So I think that keeps the bond in place because if you were to cut faster here with more, likely yields are going to rise again, like we saw last year in the fall. So I think to Danny's point, like the Fed may have here an opportunity to cut a little bit more in September. There's all this data ahead of them and then make that decision to do a larger cut.

11:02So I think this keeps the yield a bit for more falling further than rather than actually rising. I think it actually is more pressure to rise if the Fed goes faster and sooner. Ben, it's amazing what an equity rally can do for the rhetoric around, you know, what happened to people were no longer going to be buying treasures? What happened to supply, the technical issues in the treasury market that were going to trend it towards four and three quarters? You know, certainly a few days after Iran and, you know, some of the rhetoric, if you read in the global press, is that the U.S. is no longer a reliable partner and that people would be stepping away.

11:37And all we've heard of for four months is what in terms of foreign buyers of treasuries might be thinking and what global central banks are doing. Have you changed your tune on that at all? And again, I think you've been quite balanced on this, but it's amazing how we're not hearing that discussion about the long end of the bond market right now. That's true, Tim. And I think my view is still the same there, that, you know, there was a bit of a move away from treasuries and people are wary of that. We have still this big budget bill in the Senate now, through the Senate, but through the House.

12:08We obviously have this energy shock that will somewhat come through. We have tariffs. So there's a lot of pressure there under the long end that we could see higher yields that make people wary. So this counter rally we're seeing currently may be really driven by more domestic players that were perhaps short, other technical factors. But I think the story in itself hasn't really changed. So I think we're going to continue to have this higher pressure on the long end of the yield curve, really because we haven't really dealt anything away with the deficit or with inflation for that matter. If, in fact, there's more risk now than anything, even though we put a ceasefire in place, it seems actually quite fragile, to be honest.

12:47Oil markets could pop back easily and therefore put pressure on long-term yields. So, Ben, let's shelve treasuries for a second and focus on the dollar, because last I looked, we're looking almost like a three year low in terms of the DXY or whatever you want to look at in terms of U.S. currency. What story is that telling, do you think? Yeah, I think it's still about like where whenever we get a bit of relief in markets, it seems that then the economies that benefit from sort of the tariff relief or from this geopolitical relief that those currencies rally, why the dollar is in bid. So as you can saw today with the euro, for example, touching 1.16, the ECB has been cutting now eight times.

13:27The economy in Europe is not that strong, but I think it's really about if there is relief from geopolitical crisis and it seems to be going to other currencies that benefit from this, in addition to that euro and Brentos quite linked to each other, but Brentos really the contract for Europe. So I think that's really what's playing there, Guy. It's maybe not so much about the flight out of the dollar, but I do think it's related to Treasuries that if Treasuries get more under pressure, the dollar will likely get weaker. Ben, good to see you. Thank you for your time. Ben Emmons, FedWatch Advisors.

13:59Where do you think yields are headed? There are a lot of push-pulls. You can make the case either way. The one thing the guy just mentioned, the dollar is the one thing that didn't make sense today in all of this. You would have thought the dollar strength with U.S. reasserting itself. So I'm not sure, but I would say this. If the Fed were to go too early, I think the long end moves higher in terms of yields. But there's something else going on here, I felt like, today. So there's Other things, let's not forget. And let's also not forget one or two days of a bad market or down market and how illiquid these treasuries tend to trade.

14:25It'll change the whole mood and tempo on the market, in my opinion. So I think we're kind of fair value on the 10-year yields here, but I think the move is higher. Yeah, just back to the equity market, just looking at some of the things that led today, you know, semis, like it was just a dash for trash. When you see like an Intel up 7%, there was a lot of names that didn't have any real fundamental reason to be rallying, especially when you see an S &P. No, it's the analog names. Yeah, I mean, there was just a lot. But semis as a group aren't trash. I mean, semis as a group were up for a few. No, but I'm talking about the ones that really have not been in focus for the generative AI trade.

14:53Like we could, you know, kind of look at an AMD or an Intel or a bunch of other names here, global foundries. I mean, there's plenty of names that I think have not been a straight line to what has been working. But my point is, when you see this sort of outperformance that you see in the stocks up nearly 4 percent versus an S &P is up one and a quarter percent or less, you have to start saying to yourself, obviously, it's risk on. But where is the connection between where fundamentals are in valuation with the S &P right now? they seem to be disconnected. Real quick, if we could put an S &MH chart, I know that's not the greatest ETF of all time, but you'll see it was last June it made an all-time high, had a huge move lower at 272 wherever we closed today.

15:30We're right back up to those levels. And it looks like the S &P chart, by the way, and that makes sense. But what happens here? Do you get that acceleration through or do you get a pause here? That's going to be fascinating. All right, let's get to FedEx now. We've got an earnings alert here. Shares dropping after hours by the top and a bottom line beat. The conference call kicking off at the top of the hour. Frank Holland has been listening in. Frank, what's the latest? Hey, Melissa, right now on the call, Steve Raj Raminian was talking about some of the weakness in U.S. manufacturing and the industrial sector, really weighing on the company's higher margin B2B business.

15:59But right now you see the stock is down significantly. That seems to be caused by current quarter guidance. That really seems to be what's moving shares of FedEx lower right now. The revenue guidance for the current quarter, that was actually better than expected. As you can see here, the EPS guidance was$3.40 to$4, making the midpoint right around 9 % below the overall estimate of over$4. And after such a strong beat on profit this quarter, the question really is what does the company see weighing on EPS? On the call just now, again, CEO Ross Romanian named a number of headwinds, including geopolitical tensions and also big shifts in trade policy.

16:32Of course, right now we're in the middle of a tariff pause. But overall, for the quarter that just reported, strong results in FedEx said business actually improved through the quarter, citing strong U.S. and international import volumes, likely from the pull forward in freight ahead of tariffs. And retailers really looking to stock up before the end of the pause. Again, a lot of uncertainty about trade. One down note, the margin miss on Express. Deutsche Bank out with a note this week saying rising volumes from Chinese fast fashion retailers, those were actually a drag on margins. FedEx has also renewed its business with Amazon, another low margin business.

17:01But then at the same time, FedEx saw growth in daily volume for the second consecutive quarter after two quarters of being flat to lower since the The company combined its Express and Ground Units, again, tried to optimize this network. One other important note, CEO Rouse-Rouge Manning was also talking a lot about R. Brad Martin, who's going to become the new chairman of the board after the passing of the legendary founder, Fred Smith, over the weekend. He's going to succeed him, I should say. You certainly can't replace him. And just a really legendary figure and really a great guy. I got a chance to know him quite a bit while covering FedEx.

17:31Frank, thank you. Frank Holland. Going to the quarter, the expectations were low. They got lower. They got lower. The numbers were cut. Price targets were cut going in here and a disappointment still. And they talked about reducing capacity from Asia to U.S. And there's there's an element here of cyclicality. But this is a FedEx story. To me, this is not an economic story. And I know we're all doubt theorists. Scott, you're a doubt theorist, right? I mean, I was around to that school, right? Yeah. So so I think much is often made of how the transports lead and FedEx certainly should do that and has.

18:05But I think this is a story of integration of Ground and Express. This is Network 2.0. This is a company that's made so many missteps and is trying to transform very quickly at a difficult time. People like me that have been trying to make a compelling case on valuation, and it is cheap. It's not been the right way to go. You can't look at it in terms of valuation. And I'm with Tim on this. It is predominantly a FedEx story, but I think it's come to some economics as well. But the quarter was fine. That guide is an atrocity. I mean,$3.40 to, I think,$4-ish. Drive a truck through that, no pun intended.

18:38The street was at$4.06. And to the earlier point, the margins were disappointing. So it has not performed in the last three years. There's nothing in that guide that suggests it's going to start doing it now. All right, let's be clear. Last night, 24 hours ago, I think we went around the horn guy. I thought myself, we were like, you know, it's probably okay. But we did say one. There was a caveat. You probably got to go the opposite way here. And who knows how this shakes out. And I think for all the reasons that you guys mentioned. I don't think I was. I think I was mildly bullish, too. So you can throw me under that same bus.

19:06I did. No, I did. I said we went around the board. There was mildly bullish activity here. But, you know, listen, they had the mulligan. I mean, they had multiple mulligans, and they kind of pulled them out. So it's kind of hard to see whether it's specific to them. I'm sure there's some truth in what's going on there. But this one's going to be, what, clear as mud for a while. Danny wasn't here. He was probably bullish, too. I was throwing him under the ground. It rallied into the quarter a little bit, but it gave back more than that. True Danny. Don't throw Danny under the bus. Why not? You know, by the way, can I say how nice it is to be here on an update?

19:39You know, I don't get those all the time here. It's great to be here, Mel. Thank you. We get them every day. MasterCard making moves how the credit card giant is sliding into the stable coin space and who they're teaming up with to make it happen. The deal details next. But first, a hot utility trade, how triple-digit temperatures sweeping the United States could be a boon for the sector, but a scorcher for the consumer. Don't go anywhere. Fast Money is back in tune. Welcome back to Fast Money. Millions of Americans hunkering down under scorching temperatures this week. And as people crank up the AC, what's it mean for utility companies, the grid and consumers electricity bills?

20:14Let's bring in CNBC's Pippa Stevens, who's got some answers. Hey, Pippa. Hey, Melissa. So more than 160 million Americans are under extreme heat warnings or advisories. And as the central and eastern U.S. see triple digit temperatures, it could be a boost for utility companies since more power sold increases revenue and earnings power. But not all utilities are created equal, and the independent power producers could be the biggest winners from record heat. Companies like Vistra, Constellation, NRG, and Talon operate in restructured markets and own generation, so when demand rises, they sell more power.

20:47On the regulated side, it's a little more complicated since it depends on whether there's usage-based rates. Exelon, Alliant Energy, American Electric Power, and CMS Energy all operate in markets where rates are not decoupled and so do have upside to extreme heat. And while it might boost utilities' earnings, it is also boosting consumer bills. This summer, Americans are projected to spend$784 on cooling, the highest in more than a decade. Melissa? Pippa, thank you. Pippa Stevens. Fortunately, oil prices are down, so there's an offset in in energy is, you know, in consumers' energy bills. No doubt.

21:22But there's a focus on things we talk about, clean energy and natural gas. And if you look below the surface, things are happening. For you acronym fans out there, Mel, and I'll throw you what, Tim? Yes, the E in my tube. Take a look at what EQT has done over the last month and a half or two months. We're approaching levels we last saw, I want to say, almost 10 or so years ago. So the trade is absolutely working for all the reasons we just talked about. The utility sector trades with 10-year yields for the most part, all things equal. So yields coming in is a positive for the sector in general.

21:53But Tim and I both know, and you guys have talked about it ad nauseum, about nuclear. And this feeds into that thing. Yes, we're not going to build those plants for quite some time, but they're getting built now, commissioned now to start. And so this is another, I think, positive for the uranium trade. The AI trade is going to force the hand of this. So CCJ has been on fire, so Cameco's own nuclear. But then back to utilities, you know, Constellation Energy, I think, was misunderstood in terms of both the Calpine deal being a major driver for their exposure, not only to Texas, but again, NatGas and nuclear.