Stocks Surge As Powell Indicates Potential Rate Cut… And Nvidia Results On Deck 8/22/25

0:00Live from the NASDAQ market site, right here 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. Stocks soaring after Federal Reserve Chairman Jerome Powell acknowledges a rate cut could, could be coming or maybe not. But is today's euphoria warranted or did the markets get a little bit too optimistic? We are counting down to earnings for the biggest stock in the market. That is NVIDIA. Those numbers out on Wednesday. Will their results be enough to keep this rally going? We'll get the options action on that. Plus, crypto soaring and taking all the names in its orbit higher.

0:39And the chart master, Carter Worth, says lift shares about to lift off. Solar stocks shining bright. The name of one of our traders says is the best in class. And maybe he's talking about me. Hi, everybody. I'm Brian Sullivan. In for Melissa Lee, coming to you live from Studio B at the NASDAQ. On your desk tonight, we've got Tim Seymour, Carter Worth, Bono and Eisen, and Steve Grasso. And let us start with this monster market rally to close out the week. The Dow surging 850 points, setting its first record close of the year, and coming within a fraction of 46 ,000. The major indexes all following suit.

1:21The S &P finishing just shy of a record close. Small cap Russell 2000 leading the way. It had its best close of the year. Let's take a look at some of the individual sectors making moves. Anything tied to rates and housing, whether it's builders to flooring manufacturers to furniture stores. More news on them in a second, by the way. Seeing some gains. And by the way, on furniture, you got some new tariff threats that seem to be hitting some of these names after hours. Again, more on that in a minute. If you want to buy a house or build a house, you might have to borrow money. Go to the bank. Banks also getting a boost today.

1:59Regional and big bank ETFs seeing their best day since April 9th. And a trio of solar stocks, semi-stocks, software stocks, all seeing solid gains as well. The action coming after Jerome Powell suggested in Jackson Hole this morning that economic conditions could soon warrant a rate cut. Our policy rate is now 100 basis points closer to neutral than it was a year ago. and the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance. Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.

2:46Now, those simple words sending markets soaring. Bonds, too. Two-year yields sharply lower and a chance of a recut in a few weeks sharply higher. So did the Federal Reserve chair give the green light for markets to keep rallying for the end of summer? Let us talk about it. Let us trade it. Tim Seymour, I get it. The hopes and dreams of a rate cut sparking buyers to come in. But I just is there any part of you that thinks the market maybe got a little ahead of itself? Well, I think inflation is still an issue for the Fed. I am not surprised we got a dovish comment today, and I do expect we will get a hawkish cut in September.

3:26I do think markets have shown that they want to see this posture in the Fed. And we've seen over the last month that retail, that home builders, that anything interest rate sensitive, certainly banks have rallied on that expectation. So this was affirmation. A drop of 15 % in the VIX. Again, something that's not necessarily dollar for dollar where you have to assume the market is going to go on the long run. But in the short run, I think that was an overreaction. I think to remove all the other broader dynamics for markets is not the right thing to do. But again, weaker dollar, that's very supportive to international.

4:04It's very supportive to commodities. It's supportive to multinationals. I mean, there are trades here within the trade that worked today, and it wasn't mega cap tech. They worked, but they didn't work like the rest of the trades. And I think that's something the market should take a cue from. I want to bring out the A word, Steve Grass. So don't worry. The A word today is adjust. Because Jerome Powell said they were going to adjust rates. He didn't say they're going to cut rates. Now, he can't say that. I understand that. But he talked a lot about inflation. He talked a lot about tariffs. I could read.

4:35I read the speech. And I said easily, I could make a case for a rate hike. Not a shot. No. No. No, they're not. But I'm saying he kind of was really kind of an odd speech where he hedged both sides. Yeah, he has been hedging both sides. He's been leaning on. Well, then you're never wrong. Yeah, but he's been leaning on the most important mandate to him at this time was inflation, stable pricing, not full employment. So he's already done that. But I think today he really had to give warning to the market that September they're going. You have the jobs number. That was terrible. Then you have the PPI that shows inflation.

5:15I think for him, he had to really show that he was willing and able to cut rates. And that's what he's going to do. Now, is it 25 or is it 50? That's the question that we're going to have to make. But where's the neutral rate? Is it 3 percent, 3 and a half percent? So that's going to dictate. What does that mean? How aggressive where it's no longer inflationary or deflationary where the Fed sits. So that's your neutral rate. So we're at 4.3%, basically, smack in the middle of the Fed funds rate. So are they going to cut down to 3.5%, 375? How much are they really going to cut and how aggressive do they want to be?

5:58I think the first cut, we'll get some of that. Yeah, I mean, I think they're trying to determine what the neutral rate is. And, like, he's admitted, listen, we're mildly or modestly restrictive, I think he used. I mean, perhaps don't quote me on that. I think he acknowledged both sides of the risk. I think you're very spot on in terms of saying that he's been leaning more towards full employment. There's an argument on both sides. I do realize that that most recent jobs number is certainly concerning. And I think essentially today was him acknowledging that. I think it would have been tough essentially for him to walk up there and kind of give us the same speech, not acknowledging, particularly if you're saying that you're data dependent.

6:32You've now had some glaring data that perhaps are showing you that there needs to be somewhat of a pivot where I think the markets got it wrong. Tim mentioned it in terms of the VIX. I think essentially it's not just this one cut. I think the market is essentially saying that we're now in an easing cycle. And I'm not sure if that's right. I think that's a bit premature there because, as you mentioned, PPI, we're still seeing some goods inflation. Now, services have kind of weighed against that to kind of balance things out. But there is still this kind of bubbling under the surface. And we will get to a point where they're forced to factor in both sides.

7:07Admittedly and probably right. I mean, I don't have a crystal ball, but it does seem that it was appropriate for him to give some credence to at least the labor market showing signs of deteriorating. That is somewhat preemptive. And until we see that that is actually rolled over and if they're doing their job and they're preventing that from actually being an issue, I think the likelihood and the necessity for future rate cuts should be called further into. Clearly, they're more concerned about jobs than inflation. Carter Worth, though, listen, coming into today, as we talked about on this show last night, there was a I think it was a 74 percent chance of a rate cut, according to CME's FedWatch tool.

7:46It's now 87 percent. So it wasn't that big of a delta between the two. I mean, it wasn't like we were at 20 percent of a rate chance yesterday and now we're at 87. You know, 73 to 87 is not that big of a percentage change. Is it why was that enough to move the market almost a thousand points on the Dow today? That's the fickle nature of the thing. Think about this, Brian. In May, just as recently in May, there was zero odds, in fact, that higher for longer nonsense was getting to be sort of popular again. In fact, if you used AI to search for that phrase, use of it, which is you can do for any word, any phrase, it started creeping into the vernacular, into written work, into spoken interviews.

8:28And yet, never once has the 10-year yield been above 5%, except for a brief 15 minutes in October of 2023. Not in the past three years, five years, 10 years. Last time we were above 5 % was in 07. And yet it's this lurking thing. Somehow we're going to 5.5, 6. I think today, in many ways, is important because it puts to bed the nonsense that rates were going higher. Does it? Well, I mean, the market would say so. Yeah, the market did say so. So you know who was there and actually talks to the Fed chairman and knows exactly what's going on? It's a guy named Steve Leisman, who's been working since about 4 o 'clock this morning.

9:11So we're glad, Steve, that you hung around because it's been an ultra-long day. Markets loved what the Fed chair had to say. Was it correct in what we said in that the focus appears to be a lot more on jobs than it does on inflation or no? Well, it's a touch more nuanced than that, Brian. Essentially, that's correct. But the nuance I would tell you is there was a line in the speech where he said he's not concerned at this point that you would get wage inflation because of tariffs. And that's because of the soft job market. That for him was a real it's very much adopting some of the ideas of Fed Governor Chris Waller, who has been in favor of a rate cut.

9:54And if he can get rid of that risk, he can kind of clear the way for, I agree with what we said earlier, a hawkish cut. But Brad, a couple questions I think surround this cut, surround this speech here. The first is, did the market hear it a little bit more dovish than he intended it to be? There were some folks who thought maybe they went a little bit further than they ought to have. There is still some doubt about whether that happens. And that comes from the last bullet point, will the data cooperate? It's the August data that will give you the September cut. You've got to watch out for that.

10:23And then there are several remaining hawkish members of the committee with the legitimate questions whether or not now that the chairman has spoken, do they fall in line or they maintain their hawkishness? I'll tell you that right after the meeting or right after the speech, we interviewed Beth Hammack, the Cleveland Fed president, kind of stuck to her gun saying September is not the time. So remember, there are seven Fed officials who in the June forecast did not forecast a rate cut this year. Now, maybe that job support changed it. I would just say the market is not mispriced in terms of the futures market for this.

10:56But there remains some doubt something still have to fall in place before that September rate cut. And don't get carried away that it's an easing cycle. I wonder, though, Steve, I think it is. And correct me if I'm wrong, please, because I very well might be. On Thursday, is the PCE? Is that true? I think we have a PCE, which is the Fed's most preferred measure of inflation, according to a guy named Steve Leesman. And that number is coming out, I think, next week. What if that number is red hot? I mean, I'm not trying to throw holes or water on this market. It's great. People are making money.

11:30But all I'm trying to say is if the number is red hot, does a lot of this excitement get tamped down a little bit? Look, Brian, I think it's our job. It's not the trader's job. It's our job to sort of when a market goes up by 900 points in a day to ask the question, was it the right move? I think that's perfectly in line with what we're doing here. It doesn't say it's right or wrong. It just says here's some holes. One thing about PCE, Brian, is we're pretty good at forecasting it. The street is anyway. Powell actually in his speech gave us a number that he thinks it'll be 2.9%, which is up a tenth.

12:04And you do raise an interesting question, which is that you will have a Fed chair cutting with inflation above his 2 % target and forecast to remain there for a little bit. So to quote a song, the Fed is going on a feeling here. And that feeling essentially, Brian, is that these tariffs will be one time price increases. They can give it a quarter because they're still restrictive. But if that inflation doesn't start heading towards the 2 percent target, I would not count on additional rate cuts beyond, say, another quarter or so. Well, I would add a Boston in that because at least today there was more than a feeling.

12:40Steve Leesman, thank you very much. All right, we've got some breaking news. Yeah, Friday night breaking news. It's on Intel. Intel stock is higher by about 6%. On news, the U.S. is going to, or maybe already has, taken a 10 % stake in the company. Eamon Javers covering the story. Eamon joining us from the White House. Eamon, what do we know? Well, we know that the U.S. government already has taken that stake, according to officials and the company itself, now putting out a press release. Let's start with the president of the United States, though, who just put out a social media post just a couple of minutes ago.

13:13He says, it is my great honor to report that the United States of America now fully owns and controls 10 % of Intel, a great American company that has an even more incredible future. I negotiated this deal with Lit Boutin, the highly respected chief executive officer of the company. The president goes on to describe some details here of the deal. He says the United States paid nothing for these shares, and the shares are now valued at approximately$11 billion. This is a great deal for America and also a great deal for Intel. So on that point of the president saying that the U.S. government paid nothing for the shares, we now have a release from the company itself.

13:54You see the rest of the tweet there from the president, building leading-edge semiconductors and chips, which is what Intel does, is fundamental to the future of the nation. Make America great again. Thank you for your attention to this matter. So the press release, Brian, from Intel gives us some bullet points here in terms of how this deal has been structured. And it does look like the president is correct in the sense that there is no new money going into this deal. This is previously committed CHIPS Act money and previously committed funds from a program called Secure Enclave, which was a Biden-Harris administration program that committed three plus billion dollars to Intel in those years.

14:34So what Intel is saying here, if you can call up these bullet points, is that the government has agreed to purchase 433.3 million Intel shares. And the price they're paying is$20.47 a share. You can look at the current market and see how that shakes out. The equity stake is funded by the remaining$5.7 billion in grants that were previously awarded under the CHIPS Act. So that's previously granted money. And then also$3.2 billion awarded to Intel as part of the Secure Enclave Program. Again, previously awarded money from the U.S. government. So when the president says the U.S. government paid nothing, what he's saying is that money was already committed to the company.

15:14The company is saying here that ultimately this deal is now worth 9.9 percent of the company. And Brian, our eagle eyed folks on the CNBC News Desk at CNBC Global Headquarters are calculating that the U.S. government is now the largest shareholder in Intel. it's fascinating and and and again i'm not countering anybody who's making what we call decos of the graphics but i think that that graphic below you you can't see it but i can says u.s takes 10 stake in intel is not exactly accurate because it probably should say u.s buys 10 stake in intel should it not i mean you know that's a good question right because the president is saying no new no money here the president is saying the we the u.s taxpayer got this for nothing but there's a cost per share at which the shares are being granted to the US government on the basis of money that was already committed to Intel right the money was initially committed to Intel with no strings attached and what the president has just just done is retroactively attached strings to money that was already going to the company so is that taking the the stake I mean or is it buying the stake it wasn't buying the stake at the time the money was committed it's certainly taking the stake now and renegotiating the deal after the fact.

16:30And that's just the reality of the situation. Yeah, it's hard to know, but it sounds like from your reporting, there is some consideration being paid on the stock, we think, or maybe they're issuing new shares at that value, which would be very dilutive, but cost something. We're not, it's not clear. Is that correct? I, you know, I'll have to go through the fine print here a little bit in more detail. I don't know if these are new shares or shares that Intel itself held previously, but what Intel says in this press release that just went out is that the U.S. taxpayer is getting a discount on the shares.

17:08And there you see where the shares are trading now. So the taxpayer is not paying full freight for those shares or not getting them credited to the U.S. government at full price. Fair enough. We thought it was going to be kind of a slow summer Friday. It was anything but Eamon Jabbers, we've got to wait a little bit for your tweet. Weekend, it's not here yet. Not too long, Brian. When this camera goes off, I'm going to hit it. It's fair enough. Takes, buys, gets a stake. All right, for more on reaction to today's monster rally and more, let's bring in another voice. Peter Bookvar, chief investment officer at One Point BFG Wealth Partners.

17:47Did they take or buy it? Hi. Okay, we'll move on from that. Did the market overreact to the Fed News today? The market's been trained, the stock market's been trained to rally whenever the Fed tells you they're going to cut interest rates. It's just that knee-jerk reaction. But we knew that coming in, didn't we? Oh, I agree. We're sort of rallying again on the possibility of rate cuts. We've been pricing in two rate cuts for months now. So, but Jay Powell basically - Goldman Sachs is at, like, I think three rate cuts. I don't understand why the market reacted this way when everybody and maybe everybody's mother was saying that we're going to get rate cuts.

18:24Some of it was positioning. I think we were down five or six days leading into today. Fair enough. The September rate cut odds going into the speech got down to about 66 percent. It was above 90 just a few weeks ago. So part of this is just there was the positioning going in and Powell's stamp on, yes, we are cutting in September. So, Peter, when you look at this, the market is always, what have you done for me lately? So if you go back historically, in a non-recessionary time period, the Fed cuts 188 basis points. recessionary 400 basis points is 188 basis points on the on the docket for the Fed or is this a one off?

19:04I think we're in a rate tweaking cycle, not a rate cutting cycle. And you had mentioned the three percent neutral rate. Well, the three percent neutral rate in nominal terms is only a neutral rate when the rate of inflation is sustainably at two percent. Three percent is not just the number. It's only when inflation is at two. Well, inflation is at three instead. In other words, the neutral rate, according to the Fed dot plot, is one percent. So if inflation is two point nine and the core PCE confirms that on Thursday, well, three point nine percent technically is where the Fed funds rate should be.

19:39Well, one or two cuts gets you there and not much more. I'm not I'm not again. I'm trying like it's Friday. The weather's beautiful here. It's been raining all week. I want to be happy. OK, people are making money today. Do you? Doesn't feel that way. The longer this show goes on, the less I do. But I will say this. Yesterday, I mean, I'm old enough to remember 24 hours ago when we got the Fed minutes, and they were fairly hawkish. Now we get this speech, which is fairly, I guess, dove-ish-ish. But what happened between the Fed minutes were from a meeting just a couple weeks ago. We kind of feel like we're all over the place.

20:17I'm sorry. Yeah, that was the perplexing thing. And Powell spoke three and a half weeks ago and didn't tip his hand to any of this. And then the minutes, as you say, reading through it, several, many, most talked hawkishly within that meeting. And so there was no sort of hint. And that's why the rate cut odds were only 66 percent going into today. So they kind of fooled us. And maybe Powell just woke up on a different side of the bed this morning and changed his speech to being more dovish than hawkish. maybe he just didn't want to fight anymore. I don't know. Tim Seymour, you got a final, you got a hot take on the Federal Reserve today because they, listen, they moved the markets in a hot way.

21:02It felt like this was not based upon hard data. This didn't feel data dependent. I think if we had the same Fed without some of the pressure that we've seen on them, I think the PPI was hot. I think the first statement or early in his statement today, and I don't know if Peter's still here, but the fact that he said he's shifting the risks, he sees the risks in monetary policy shifting, that's significant. And that now needs to qualify very much this dovish statement with a hawkish cut. Peter, I don't know. Yeah, I agree that it should be interpreted as a hawkish cut because I don't think they have many cuts left if a 1 % real rate is that true real rate that is in the dot plot.

21:55So I know a lot of people say the Fed's going to cut to three because that's the neutral rate. But it's only in the neutral rate when inflation's at two. And inflation's not at two, let alone now, but on a sustainable basis, too. So I don't think they have many cuts left. It's one and done in September. Kind of what Steve Leishman said. We're going to get the one. Powell gets Trump off his back, sort of. I think he'll throw in maybe one more in December because the economy is legitimately slow. Growth is 1%. The labor market is slowing. So I understand his desire to cut. But that 3 % sticky inflation rate is going to limit his ability to cut too much from here.

22:34Well said. Peter Bookbar, thank you. Thank you, Brian. Thanks for coming in. All right. It is not just stocks. Crypto and all its cohorts also surging in today's rally. Tokens, stocks, they're all going higher. But how much higher can they go? We'll talk it. Plus, a deal on the diamond. What we know about ESPN's potential pack with Major League Baseball. What it all means for the streaming wars. Don't go anywhere. Fast Money, back in two.

23:07All right, welcome back to Fast Money. Some home goods stocks, furniture-type companies. They're falling right now after a big day today. But it all comes because a few minutes ago, President Trump announced a tariff investigation on furniture coming into the United States. Shares of Williams-Sonoma, Wayfair, RH, all down about 6 % or 7.5 % Carter worth in the after hours. There's a lot, like a lot of things, we still don't know. You have a take? Well, I mean, it just speaks to, again, the fickle nature of it all and the knee-jerk reaction to headlines. But more importantly than these, these are very small companies.

23:46We're a lazy boy. You know, it goes on and on. But the home-building stocks act well, and that is a much more important data point than this sort of idiosyncratic. William Sonoma, bigger, but a lot of these are not very important companies in terms of their market cap vis-a-vis the overall market structure. Yeah. Anybody else around the table got to take on because we don't know. I mean, the stocks went up today. Then you get this tariff announcement. Then the stocks go down today. It's probably all good for Ashley Furniture based up there in Arcadia, Wisconsin. But other than that. Well, again, I mean, I can understand why the markets rallied again.

24:19I just think they're getting ahead of themselves. So you look at the Russell, for example, which had an enormous day today. And you compare that to where it was in April, just now getting back to those levels. And I understand these smaller companies are likely going to be funding at the front end of the curve. So any kind of easing of rate pressure helps them. The real question is, is this really where you want to be investing the incremental dollar here? It just seems like if you're going to argue that markets, the market valuations are stretched and you're arguing that we've already had this run and you're going to then argue that these are rates, sensitive pockets of the market.

24:51Is this really where you want to be investing the next dollar? And I think that that's really a tough do for me. All right. Let's move on to crypto Coinbase strategy circle. Robin Hood, Steve Grasso, all doing well. But you would argue that some of the cool kids have moved on to Ether and others because there's just not enough volatility in Bitcoin? Yeah, I think that's the key is that Bitcoin has got not that Bitcoin can't continue to rise. It's just if you look at what was up today, what was the number, 4 % or thereabouts? and you look at ETH, ETH was up anywhere between 12 % and 15%. You're going to get a larger volatility spots with the smaller coins.

25:31And if you look at ETH, that has some use cases to it. So Bitcoin just becomes digital gold. If you are not investing and you do have the 21 million ultimate supply, that's the base case for Bitcoin. But when you look at Ethereum, the rest of the crypto space is built on Ethereum's platform. So there's use cases behind this. So this one can really have that tailwind and that torque to trade multiples higher than where it's at right now. All right. Well said. Listen, everything, pretty much everything went up today. All right. There is a lot more fast money still to come. Here's what's coming up.