Stocks Jump After CPI Data… Plus Perplexity’s Bid To Buy Google’s Chrome Browser 8/12/25

0:02Live in 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. Off to the races. The Nasdaq and S &P hitting new highs today. The Dow jumping 483 points on the back of the latest inflation data. Does the new CPI print all but guarantee a cut at the Fed's next meeting? We'll debate that. And AI moves perplexity, making a big bid for Google Chrome. What's it mean for Alphabet? And does it take Apple off the table as a potential buyer? Plus, we dig into the latest results from CoreWeave and Kava. Why the chart master is changing his tune on gold miners versus gold bullion and sneaker maker on holdings running higher and taking a bunch of names along with it.

0:41The trades behind all the moves coming up. I'm Melissa Lee. Come to you live from the studio via the NASDAQ. On the desk tonight, Tim Seymour, Karen Feiderman, Dan Nathan and Guy Adami. We start off with the S &P's first record close of the month. The benchmark index rising more than a percent today, closing above the 6 ,400 mark for the first time ever. The Nasdaq also set intraday and closing records, while the Dow's 480-point gain got it within 1.3 percent from its all-time high. Today's gains come after a softer-than-expected CPI print for July. Consumer prices rising 2.7 percent from a year ago versus estimates for 3 percent growth.

1:15That news, sending short-term Treasury yields sharply lower and the probability of a Fed rate cut next month markedly higher. So did today's data give the all-clear for the central bank and for the markets? to give the all clear on the economy in terms of the impact from tariffs. Guy, what do you think? I'm not convinced he gave the all clear to the central bank. I don't think anything changed. I mean, there was something in that inflation number for everybody. The headline number people got very excited about. Then they looked at Supercore and said, well, wait a second. Maybe it's a little hotter than expected.

1:44For me, I think it sort of reinforces what Jerome Powell's been saying all along. Inflation is still a problem. Now, I get the markets are now pricing and a near certainty. I get it. J.P. Morgan, I think, has talked about four rate cuts for the remainder of this year. That's all priced in. So as much as people want to say it created this certainty and all systems are go, it's not like anything necessarily changed on the ground. I think you overlay also the reaction in the bond market and you try and figure this whole thing out. And it's a puzzle a little bit. We saw the pullback in the 10-year immediately on this report, and then it bounced higher, finishing the day almost unchanged.

2:18I think equities love this, as you said, first of all. But the obvious reasons are, while the core inflation that the Fed seemingly should be more focused on was actually the highest since the start of the year. So let's be clear. This wasn't a perfect number. This was a number that had some heat to it. But if you think about the good side of it, they actually showed that they were given ground. When you combine that with a labor market that we learned just last week has maybe some cracks in it. like like your fountain guy, apparently. Well, we'll talk about that later. OK, guy's got a fountain with a crack in it.

2:52He's trying to fix. But anyway, the point is, it leaves the Fed in a position where they can focus on the labor market. They can actually cut rates and they don't have to worry as much about inflation. That's what the markets did today. And the reason why you saw small caps outperform everything is because people sense that the places that are most interest rate sensitive and small caps are, which are up three percent today, almost three times the move of the market. That's the expectation. You have Scott Besson out there pushing the central bank as well. And I think this is something that people feel the Fed can move.

3:20So I think maybe in a different administration where there was no pressure on the Fed at all, I think there's cover there to stay the course if they want to stay the course, which is do nothing. But that's not where we are. And I do think, as Tim said, you know, there's a little bit of cover there in the labor market. So I do think they will cut. I think they should cut. I think they will. There's still a lot of room, though, between, you know, a 25 basis point cut doesn't really do much of anything. And maybe, I don't know, cools the rhetoric. And I do think there's some cover for it. So that's what the market wanted to see.

3:56And if this is the beginning of a significant rate cutting cycle, not one or two, then that is very good for the market. Yeah, it's, I would say, I don't know, a mystery wrapped in a riddle inside of enigma. I mean, like when you look at the rally today, we're talking. Yeah, I think I got the order. Close enough for government work, as guys used to say. I just say this, like what are we we're applauding their stock market? 1.25 percent GDP growth, 4.2 percent unemployment growth, 2.7 percent, you know, on the inflation front. And we still have a Fed funds at four and a half percent, which actually seems just fair.

4:34You know why? Because the stock market is trading at all-time highs, trading about 22.5 times, maybe 24 times forward. So, you know, cutting rates, we saw what happened last fall, not a whole heck of a lot. I mean, like the economy was able to kind of deal with 4.5 percent, you know, Fed funds rate over the last year or so. So I just find today's behavior really odd that you have, and Tim just mentioned what went on in the small caps. It just kind of suggests that the economy is starting to fleck and that the market participants have to chase that right here. And we're going to go over a bunch of stories today.

5:07All of them speak to, in my opinion, a bit of over exuberance or the unwind of exuberance. So looking at a Cava down 20 percent, that stock has lost 75 percent of its value from high. I know we're going to do it. Whatever. But I'm just going to jump in. No, I mean, but I think these things are important. And for the last block of the show, final trade guy, we'll talk about my phone. All right. We'll get to it. Right. Anyway. But my point is, it just this seems like today's price action in particular, when you have the 10 year going nowhere, you know, all this sort of stuff. It just seems really odd to me.

5:39Really odd. Well, I think also there's a question as to, you know, I get the Fed controls are short and not the long end. But it's long and that the administration would really like to see lower. And the reaction today's session doesn't indicate necessarily that that's going to happen. And the fact that the German, what is it, the 30 year yield reached its highest level since 2011. There's the rest of the world to consider in terms of where yields are heading. Yes, agree. Totally. Like they don't have any control over that part at the moment. But I do think to the extent that they fund the government with, you know, shorter paper, that that that does that does actually help.

6:16So I think there's something to that. And I think that the market really thinks that this is the beginning of a cycle of a cutting cycle of some significance. How do you position, then, if you believe that? If you believe that it's the beginning of a cutting cycle and that the impact will really be seen in rates. I think that's what the market's been pricing at all. Remember, it was this time last year, maybe a little bit, maybe it was September of last year, when the market was pricing in six rate cuts for this year. We've clearly backed off of that. The market was significantly lower back then.

6:51And now here we are pricing in maybe three or four for the balance of the year. So you tell me what the market is pricing in. I think we've already sort of jumped that. I think we've crossed that river. Yeah, the market's definitely pricing a lot in. The market's pricing in more than September 25 basis points. I think there's even a sense they can do 50. Again, Treasury Secretary Besson out there saying, hey, they should have gone to June or July. So why not adding an extra 25 and calling September 50? The stock market has done that. And if you think that the labor market isn't really falling out of bed and that actually we haven't really felt major impact from tariffs.

7:28I'm not saying we won't. And, in fact, I think companies are at some point going to absorb that impact, and it will hurt margins. Maybe we haven't seen that yet. If you're an equity market that's trying to discount at least lower interest rates without the bad side of it, it makes sense. And just from market leadership, be clear, you've got the NASDAQ leading and leading with authority. You're getting Apple in the picture. You have Microsoft in the picture. NVIDIA is unstopped. They are now really the next target because we do have NVIDIA earnings coming up. So I just think that markets are absolutely pricing on an interest rate dynamic, and they're not thinking about the long end.

8:01Besson was even saying that he hopes to get Meyer in and confirmed by the next meeting, which would really change the dynamic a little bit in terms of that rate cut, maybe the size of it. Right. And you guys all sound a little pessimistic. As a silver lining guy on the desk, I would just say that there's, you know, you got that dollar coming off here. It doesn't actually seem to budge. If you are pricing in now 100 basis points, maybe 150 basis points, and you think that inflation is going to embate, and you think that 4.2 % might be the higher print that you see in the, I get it, but you actually need to see now S &P earnings start to inflect also.

8:33And if you look at like the rest of the S &P 500, X these top 25 names, you're getting low single digits earnings growth right now. So a lot of things have to happen in the regular economy outside the AI economy for that to make a whole heck of a lot of sense. So to me, you know, what's being priced in here, I just again, I go back to that mystery inside. It seems like a very confusing time, at least for the economy, definitely for the markets. But investors actually there's just no caution at all right now. And I think that's probably a bigger problem. All right. For more today's CPI, Perin Societe Generale Head of U.S.

9:05Rate Strategy Subhaja Rajapa is here on set. Subhaja, great to see you. What did you make of today's action? I know you're you're not on the equity side of it, But to see markets rally to record highs and to see not too much happening in the bond market in terms of by the end of the day, what did you make of it all? So to me, if you came into this report thinking that goods inflation is going to show up, tariffs are going to show up in goods inflation, you just didn't see it. I mean, you saw a modest increase in goods inflation, services inflation was broad-based gains. So to me, that is a bit of a concern.

9:42And I know you were talking earlier about whether the Fed should be cutting 50 basis points or whether they should be cutting three times this year. My view is that they should cut maybe once, maybe twice this year, given the fact that inflation is a concern. This is just the beginning of the feed through from tariffs into inflation. And it's only going to start ramping up in the second half of the year. So this idea that you should be front loading cuts in this environment doesn't make a lot of sense. And to your point earlier, I mean, financial conditions are extraordinarily easy. Today's price action shows exactly that, is that the market's still looking at aggressive path of cuts and equities are responding.

10:25You speak very rationally, and that is in the rational Fed world, the rational Fed dynamic. But we have the political overlay, the possibility that Stephen Myron may be appointed and confirmed, I should say. to join the Fed. We have the possibility that we've got a bunch of governors who are basically auditioning for the part of Fed chair as well, who will probably want to flex their very dovish views at this point. So how do you overlay that with what you think the Fed should actually do if it is bound by the dual mandate? So I think ultimately reason will prevail. You're looking at a committee that's making a decision.

11:01Yes, you're going to have more dovish leaning members in the committee going forward, but that doesn't really change the dynamic that you're going to need to have to build consensus across, you know, a variety of not just governors, but also Fed presidents who are going to be voting. So I think ultimately reason will prevail and they will, you know, probably cut rates. But again, a 25 basis point rate cut is not a lot for the market. And my concern is that if they do cut rates by 25 basis points, and let's say the 10 year actually moves higher, that's not going to do a whole lot of good for the mortgage market or other markets that are interest rate sensitive.

11:35So they're going to have to weigh the pros and cons of being aggressive on policy. Let's just go back to tariffs for a second. So how much or how little it sounds like of tariffs do you think we've seen already? And given that some of the tariffs have been sort of delayed and so the start time hasn't really worked through the economy yet, one could argue, and that would be a very reasonable argument. Where are you thinking that pressure will be ultimately when it's fully felt? So it's actually a very confusing picture on tariffs. You are seeing some components of showing higher prices, for instance, electronics, apparel is, of course, a bit volatile, footwear.

12:16Those prices went up, so that could be related to tariffs. But really, a lot of that could be absorbed by the corporations. So to get a picture on what's happening, you need a few more months. Earlier on, I think corporations are going to absorb the costs. Over time, they're going to push back. They're going to pass those costs on. For instance, groceries. I mean, there's very little margin there. They're going to, you know, your tomato prices are going to go up because they can't really absorb, you know, those prices. It's just a matter of time that the tariff-related inflation starts to show up in the data.

12:52I think it's still a little too early because we just don't know how much the tariff rate is going to be ultimately when the dust settles. Well, Subhadra, fortunately, Tim grows his own tomatoes, so he doesn't worry about that. I do. Why are you joking about that? I'm not joking about it. Do you see me smiling? Anyway, your question to Subhadra. My question is, where are 10-year yields going? Because that super core number was hot. The market obviously, maybe it was paying attention to it in the form of the bond market. 10-year yields up a little bit. Are they just sort of stuck in the mud here, or are they headed higher or significantly lower?

13:24I hate saying this, but I think almost everywhere in the yield curve, 10 years in, is kind of stuck in a range. I think the two year is probably going to be between three and a half and four percent because the market's already very efficiently priced in for a very aggressive policy easing path. Ten year, probably between four and four and a half. And the third year, to me, is a little bit more on hinge because that's more dependent on what happens globally. You know, if global bond yields start to rise, the third year starts to take off, then the third year in the Treasury market is also going to rise.

13:53So I think the 10 year probably stays in a pretty range bound for the remainder of the year. Subhadra, great to see you. Thank you. Thank you. Subhadra Rajapa. So if we only get 25, what happens to this rally? Well, as I said, I think the market's been rallying on predicated on four, five, six rate cuts this year. That's clearly not happening. If we only get 25, I think the market is trading on more than just the Federal Reserve right now. There are other things that work clearly. There's passive investing, which continues to sort of be de rigueur, as the French say. and the market is looking past any valuations.

14:30And more importantly, I think any of the metrics that we looked at back in April where we're at oversold conditions we hadn't seen in a decade, those conditions out of the upside are equally bad. So the market doesn't care, though, when things go higher. I think the rhetoric or whatever Powell says after, you know, is he dovish, is he hawkish, I think that's going to be more of a tell than what 25 does or not. Right. The next step beyond the 25. Tim didn't like my French there. I saw you say that. Well, Jim Mappel, Timote. So, you know. You know, there's one other point I think is really important.

15:04I want to watch French person here, I guess. I think this is an interesting market where I think that retail investors are kind of in the driver's seat. They didn't get shaken out in April. And now it might be an institutional chase. We were remarking at the end of April and May how many of these billionaire hedge fund managers were talking about, we're going to see a retracement, this is going to last longer. And I think that could be one of the things. because you look at a day like today and institutional investors are looking around. It's not retail chasing the Russell 2000 right here. So they're looking for opportunities in places.

15:33And once you start seeing if energy takes off, if pharma stocks take off, you know that people are looking for places to play catch up. And that, to me, would be institutional. Meantime, Goldman Sachs jumping 4 percent, hitting a fresh record high today. The banking giant up more than 30 percent this year. But the performance isn't enough to impress President Trump, taking issue with the firm's analysis of the impact of tariffs on inflation. He posts on True Social today, David, meaning David Solomon, the CEO of Goldman Sachs, should go out and get himself a new economist. Or maybe he ought to just focus on being a DJ and not bother running a major financial institution.

16:11The piece is from Jan Hatsias over the weekend, basically saying what we are saying here, and in terms of the impact of tariffs have yet to be felt by the consumer. They've been being born by corporations, by exporters, et cetera. And eventually that will shift to the consumer. So that impact is yet to come. Thoughtful note. They're entitled to their opinion. I'll say this about David Solomon. He can keep spinning records all he wants because under his leadership since, I think, 2018, his CEO stewardship has probably had the best stock performance in the history of Goldman Sachs as a publicly traded company.

16:43So he's doing something right. Also a big fan of the show. Of course, he's probably watching right as we speak. But the question here is, is we've seen CEOs come under scrutiny by the White House. And as banks are vying for a piece of potentially one of the biggest IPOs of history, Fannie and Freddie, what do you do? Do you try and avoid these sorts of. I mean, it's not a great position to be in if that is a business that you're trying to get a piece of. Yeah. And I'm sure David Solomon, as he does every single day of his life, he'll probably handle this deftly and will not overreact. I think it's a case of we know the White House.

17:24We know President Trump has a view on many things. Ultimately, I don't think Goldman Sachs is going to change what they do. And you're right. The IPO calendar is fascinating in some place that I think many of the banks will be involved and they should be involved. Get back to the banks as a sector and as a group. They outperformed disproportionately today because the sense is that the yield curve is steepening. I think net interest income is the most important part of investing in banks, at least right now. Yes, IPOs, and yes, that sense that the liquidity we've all just talked about are great.

17:56And look at the outperformance of the weaker players. It's not surprising in a bull market. Bank of America, Citibank are dwarfing over the last three months, J.P. Morgan, and it's not because they're higher quality. Coming up, shares of Corwee and Kava on the move after reporting results. Kava getting crushed after hours. What's behind the falafel fallout that's next? And Gold's Rally getting outshined by names doing the digging. But do the technicals point to a change in the trend? Do not go anywhere. Fast Money's back in two.

18:34Welcome back to Fast Money. shares a core weave dropping after its second earnings report since going public. The AI cloud company posting a loss of 60 cents a share but beating revenue estimates as it says it is rapidly scaling. The call kicking off kicked off the top of the hour here. CBC's Christina Parts Nevelis is here. She's been listening in. Christina, what's the latest? So there was three main points that I've heard just so far. The first one is that they spoke about just the fact that even financial institutions are getting in on wanting to get some of their infrastructure. They named Jane Street, Goldman Sachs, et cetera.

19:02So they're talking about just everybody trying to invest in that. The second point was that he did bring up access to capital. They have raised a lot of debt most recently the end of July. He said that they're going to continue or the access to capital remains robust and they will continue to access less expensive capital, which I think was important that he used. He added the word less in there. He also just spoke about CapEx just moments ago for Q2. It was at$2.9 billion, which is up a billion dollars quarter over quarter. But he's saying That's because there's so much demand. Therefore, they have to keep spending.

19:34So that is could be a concern for cash flow for this company. And we also know that it's operating at a loss. And then the one other point, they did bring up core scientific. So for our audience that doesn't know, it's a nine billion dollar deal to buy core scientific so that they could actually be the landlords of said infrastructure. They would take hold of about 10 data centers. However, there's been some opposition over this deal, especially the nine billion dollar valuation. on the call, a CEO saying that they believe it'll add value for both shareholders and owning the infrastructure will allow them to scale.

20:06So there's a lot going on right there, but it means they're saying that growth is continuing, but they're going to have to continue with the level of debt that they're accumulating and that they believe core scientific should be part of their portfolio, even though there's some opposition. Yeah. And Karen might be able to speak to this, like cheaper debt might be something that converts and that sort of thing. And if there's demand right now, you might as well and do that sort of thing. We've seen some zero-coupon sort of stuff way out of the money. But anything, and I know this is probably more Q &A, but I know this is something you've been tracking pretty closely, customer concentration, anything there?

20:38They didn't get to that. The CFO was still talking about just the CapEx numbers. And so maybe them talking about these different verticals, like financial services, helps that. Well, they'll probably point to the fact that OpenAI during this quarter signed a$4 billion deal, but that still leaves concentration within Microsoft, OpenAI, presumably Google, Alphabet is another customer as well, but they haven't openly said that. But that is the presumption, especially because Google's logo was on their website at one point on the homepage. But, yes, that is possibly a big concern. So what do you think is disappointing?

21:10Because if you look at what the expectations were, it looks like they had pretty good sizable beats on revenue. Yeah, and I saw some headlines saying that the loss was larger than expected. But we're not comparing loss because they use gap numbers. The analysts are comparing to use non-gap. So then that comparison is a little bit off. So maybe that headline's misleading. Perhaps the other overhang is more of the technical timing. You have the IPO lockup that expires on Thursday, and that's almost 83 percent of Class A shares that could potentially, you know, they're not going to go all out and flush their sales, but some people are definitely going to exit.

21:41So that would dilute current shareholders on Friday morning. And then the other overhang was just that core scientific deal. So an M &A that the uncertainty is confusing and people say the valuation of nine billion dollars might be too high, given you had Corweave try to buy it just last year at a billion dollars. So that's a huge increase in just one year's time. Christina, thanks. Christina Parsinevelis. What do you make of this, of how it's trading? Well, and again, Corweave, with a currency that's also appreciated rapidly since last year, it's still, it's probably cheaper for them to buy it on a relative basis to when it was last year.

22:14I'm not surprised at this move. We'll see where it settles. In fact, if it was a down 8%, that wouldn't surprise me, And that wouldn't be indicative of any anything in the numbers that was awful. In fact, I think the biggest issue is what we've addressed here. It's the lumpiness. It's the infrastructure build out that quarter to quarter is very unclear. And that's part of the story here. And so, yes, is are there concentration dynamics with clients? The valuation is far from cheap, but there's nothing that we've heard not only here, but from anybody that these themes around networking and AI and sovereign build out and all the places where they would have more clients is is abating.