Tech Stocks Slide as AI Capex, Apple Earnings and Oil Drop Dominate Headlines 11/2/26

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1:03Tech stocks now turning lower as the market rally loses steam, but how we close out the day is still anybody's guess. Hey, welcome to Power Lunch, everybody. I'm Brian with Kelly. Two hours from the close, the Nasdaq just turned lower, kind of a continuation of last week's sell-off that set many trader favorites lower. Some are still down. The next test coming up in a couple of hours. Plus, oil also lowered new hopes of a real, and we mean it, peace deal this time, the latest on the energy trade ahead. And tech titan Apple reports after the bell today on a Monday, one of the most valuable companies in the world.

1:38It's also its first earnings report with John Ternus as CEO. Investors listening for the holiday quarter outlook and whether rising memory costs could squeeze margins. What Apple says will matter well beyond the iPhone. The shares are down about 2 % today. All right. Hi, everybody. It is a very busy Monday. And you might think that the markets were OK because the major averages are still a little higher or were higher moments ago. But if you look under the market hood, as you should and we do, it is another rough day in some widely owned sectors. Look at semiconductors. Intel right now, it's down another 5%.

2:12Intel has now lost almost half its value since October 1st. C-Disc, C-Disc, SanDisc, and Seagate. I just combined them. Maybe they'll combine someday. They're lower. And Marvell, they had a deal. We'll talk about that in a moment. Down about 9%. That is not all. CoreWeave losing nearly 5%. Oracle down 6%. And AI favorites, or at least they were, Nebius Group and Supermicro, they each are down about another 4%. It's another good reminder. Just because maybe the headline averages might be in the green or were, all may not be as it seems. Let's talk about that and unpack the entire market. Kick things off.

2:49Todd Sohn is chief ETF strategist at Baird Strategas, and Jonathan Golub is chief equity strategist at Seaport Research Partners. Jonathan, I'll start with you. The Dow and the S &P are still higher, but inside, as we just showed, parts of the tech trade not looking good. When I look at that and bond yields and some of the bonds of some of these companies, I I don't think I should be forgiven for being a little bit nervous here. The internals of the market are way worse than the overall market. So when you see semis and hardware down and the fundamentals are really strong, it's basically telling you the market doesn't believe the long-term story.

3:29And then you see defensive sectors are outperforming. That's what people go to hide when they don't think things are going well. And then if you look at the bond market, You don't want to see the market up on falling interest rates and higher credit spreads. Because, again, that's the bond guy saying is I think that there's an underlying business or economic problem even in the face of good news. So there's a lot to be concerned about about the internals, even though the overall numbers are pretty good. Todd, are you concerned? I am. I am. I agree with what Jonathan just said there. You can see a noticeable shift in the leadership of this market.

4:02It's been some staples. It's been health care, energy outside of today. That is far more defensive than we've ever seen. So I think it's a great time to figure out in your portfolio, how do I manage tech risk? How do I diversify? You need to look for low-tech, low-correlation type exposures going forward. There's sort of like the near-term tactical and then the much bigger picture. So part of this is just about what's the market doing, and then part of this is about what's going on with AI. So is your thought about kind of the opportunity in AI shifting as a result of what we've learned, or is this just a period where, to quote Mark Mahaney last hour, the market wants clarity around free cash flow going positive again.

4:39And he thinks until we get that, which could be 12 to 18 months, I'm not saying it's going to be that long, but until we see the light at the end of the tunnel, it could be a rougher patch. Yeah, I look at this as very high expectations meeting with very aggressive positioning in tech. And when both of those collide and you have an unwind in positioning and expectations not being met, it results in a massive, massive unwind. So if you look at a bunch of different ETFs from the thematic space, all of them have peaked between June and September. The only thing left standing right now is just the S &P 500.

5:12It's a matter of four, but that probably starts at the column two. I like that. The only thing left standing is the S &P 500, which is a reassuring statement in many ways. Listen, S &P 500 buyers are still standing. And let's be clear, the NASDAQ's down a couple of percent off its high. It's not some huge wipeout, but kind of, Jonathan, to Kelly's point, you've got a couple of things that could be happening. Some big firm or firms is blowing up. You've got these leveraged ETFs, which are unwinding, which maybe that's related to number one. Or people have just still made a lot of money on these stocks, and they're looking to sell them to raise money to buy other things.

5:43You've got to step back and say, what's a fundamental story? That's why you're here. I appreciate that. Welcome to the show. But the earnings on the S &P are up almost 35 % year to date, and the multiple is down 25%. So are there things in the internals that are kind of don't smell right? Yes. Are we focusing on them? Yes. But if you look at the earnings estimates, they continue to be revised higher. The earnings are supposed to come in at 33 percent this quarter. And there's a bunch of pockets. And, you know, it's interesting as you look at things in the ETF space, you have like transports. The fundamentals are great.

6:21The stocks aren't performing. And it looks as if there's a bargain waiting to be had unless there's something that's breaking the economy. and I'm not sure I see it. I was going to say, if we, a situation where you would have earnings up 30%, like you said, multiples down 25 would usually mean it's because we think or we are at a top, right? That's what they always say about memory stocks. The multiples are lowest at the highest point of the cycle. So if that's not true, then it's, then this is a great opportunity. And overall, I think it is, but you have to make sure that you're checking to see that things aren't falling apart.

6:52The one thing I'm concerned in earnings season, fantastic earnings numbers. They're only surprising, normally beating by 2%, which is really low. So there's some things to watch for. If you had to make a bet, I would bet on the upside, but I'm focused on some of these issues. So beating by 2 % is the new not beating? The average for last decade is 7.5%. And last quarter, it beat by 12.5%. So it's not a washout, but it's something that makes me at least... Todd, so what do we do? What is Baird Strategas recommending to its clients right now? Go more equal weight over cap weight, right? What does that mean?

7:30You want to favor health care. You want to favor a little bit of energy in there. And then I think if you're trying to get more opportunistic, okay, what's the, if oil continues to decline, go into consumer discretionary and go into the airlines. You see if you have jets, that's the pair trade, right? If you are skeptical, oil can maintain elevated levels. Go into the stuff that's really sensitive to oil, consumer and leisure, right? That's what we're doing. Well, I know somebody that talks a little bit about oil, just throwing that out there. And I would say that the next 72 hours are critical because we don't know what's going to happen.

7:59Either there's a bunch of peace deals being sent back and forth between intermediaries, and maybe something happens, maybe it doesn't. We've been here before. Been here a lot of times over the last eight and a half months. Or something actually gets done and oil goes back down to 75, 65 a barrel. Let's hope for the latter, right? Because then that means peace. But if that's the case, then you're saying buy cruise lines, buy airlines, buy what else? All the stuff that has not worked, right? PEJ is our go-to for consumer discretionary exposure. It is full of PEJ. Yeah, it's an Invesco ETF. It's full of travel and leisure companies that are sensitive to the price of oil.

8:33Of course, the other variable is rates, but we'll leave that on the back burner for now. I take the other side of the trade. I mean, if you look at what's really working fundamentally in terms of earnings, Big chunks of the industrial space, hardware and semis, the fundamentals are terrific. The stocks are not moving along with that. If you're going to, you know, the consumer is stretched. Consumer confidence, you know, is weaker, even though the employment picture is pretty good. I would fade the consumer. I'd go long industrials. And on energy, at the end of the day, it's not a flows issue. You're making a bet on the outcome in the Middle East.

9:09I'm not sure that that's a bet I'd put in a portfolio. But that was the point I just made. We just don't know what's going to happen. But I think what Todd is saying is that if, and I don't want to put words in your mouth, you're sitting right here, is that if that does happen, that's what you would do. So let me ask you this. You just mentioned some of the names. Bring up Intel, guys. Bring up the SMH. They're down today. This is not a good market day, even if the S &P 500 is mildly in the green. Is Seaport, is Jonathan Golub, are you buying today then? I would be buying. Do I think that there's some noise here that may have a little bit of downside?

9:43But there's nothing broken with the fundamental stories. I mean, if you look at the GDP came out at almost three and a half percent growth. That's like an insanely good number last week. And if you look at the internals, the internals look more like the economy is growing at five percent. So we're not heading into a you know, we're not heading into a recession. And this should all pass through. But you have to take a watchful eye on it. But the one group, I would not be betting that the consumer is in terrific shape whether or not oil prices come down a couple nickels. You have taught a fragile five that you're watching, if I'm not mistaken.

10:18You know, the places where there might be high short interest or things like that or some of those just levered parts of the market. Yeah, I think if you're looking for capitulation on semis and tech, watch inverse ETF volume. Because the entire levered space, levered notionals down about 25 % since the peak in the summer. That's good, right? Painful, but good in the right direction. We saw a spike in inverse ETF volume Friday, shy of where we were, say, for Silicon Valley Bank for tariffs last year and for the US-Iran conflict. But that is when you get the kind of the tap out in terms of - Well, people betting, I'm sorry, people are betting against, so they're betting against the market.

10:54Short semis, short NASDAQ 100. The bulk of the leverage space is tied to tech. Are those retail or institutional? It's a mix of both. It's a mix of both. It's a lot of institutions trying - Because if it's Bob buying five shares of an inverse leveraged ETF, I'm like, okay, hey, Bob's taking a bet. If it's Citadel making a billion-dollar bet on a leveraged ETF, that's a whole different ball of wax. It's a big mix. It's a lot of Asian retail, right? I'm going to be there later this week, so I'll get you on the ground information. But if you're looking to express a high conviction short, there's no better way to do it than inverse ETF.

11:25So I think that is where you're going to get the capitulatory signals from in this environment. And it's good to know we got close, but we're not quite there yet. Close, but not capitulatory yet. All right. That's a bad sign, by the way. Which one? That we're not—we want capitulation. You want that washout event to kind of clear the way to go higher. And that's all he's saying is we're not quite there. It's trickle. Yeah. We're getting closer. After an event like Friday, you know, it feels like we're maybe getting closer. Well, safe travels. Thank you. I'll report back. Todd Sohn. Jonathan, thank you as well.

11:55Jonathan Golub. We're just getting started here. WTI crude slipping below 100, well below 100 a barrel today. It's at 96 amid hopes for an Iran peace deal. But we've seen this before. So will the piece premium stick this time? Plus Apple and Palantir both reporting after the bell. Do you buy them before the print? Talk about risky business. A shareholder weighs in. After the break, Morgan Stanley's Brian Nowak on Big Tech's massive CapEx tab. Don't go anywhere. We'll be right back. Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that.

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13:13Download the latest episode and subscribe at schwab.com slash marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. It's the holiday season at House of Burl, which means that it's the perfect moment to review some key rules. Rule number five, more style means more celebration. Number four, buy gifts, but remember to treat yourself too. Number three, there is no dress code, but always leave them talking. Number two, show off different outfits. No party remains unattended. And rule number one, have it all without spending it all. Happy holidays from House of Burl, Burlington.

13:53Apple is reporting after the bell today, which feels a little abrupt because it's only a Monday. But we've already gotten some massively important earnings from the hyperscalers who are responsible for funding the AI build out. The print's not calming investors' concerns so much about the AI trade being on shaky ground. One of the big questions is whether the CapEx spend will be justified. Here on set with us to dive into that is Morgan Stanley's head of U.S. Internet research, Brian Nowak. I said it in my head. I said no walking, by the way. You nailed it. Yeah, thank you. Thanks for having me.

14:25It's so great to have you here on a day like this, especially, because what would you say is the reason why the AI trade has been breaking down? I think there are growing concerns about the ROIC or the revenue that can be generated by all of this capex. You know, investors are saying, which companies are going to deliver faster revenue growth? Which companies are going to actually be spending the money across the economy to drive all this revenue across tech. And so I think we're sort of at a chasm or a crossroads where investors are saying, we understand the CapEx is big and going to get bigger, but where is the ROIC going to come from at this point?

15:01That's what the market's going to look for as we go into 2027. And the big picture people, like we said, we talked to Howard Marks and these folks last week, they say, good, it should. I mean, this is how we know we're not in a bubble. Right. I mean, but in some cases, there is good signal. You know, when you look at Amazon's results last week, look at the hyperscaler's results last week, You saw Amazon Web Services, Microsoft Azure, Google Cloud. All of those businesses accelerated very nicely. Tell us the numbers again. Do you have them off the top of your head? Wasn't it like 75 % in some cases, or am I imagining things?

15:29In the case of Google, you have the non-TPU business growing over 70%. Crazy. In the case of Amazon Web Services, you're now accelerating to almost 40%. And they are talking about how they have line of sight toward 40-plus percent growth for the next two years. This business is like 20 years old. Okay, maybe that's an exaggeration. maybe 10 or 15, and it's growing 40 % right now? Correct. It's crazy. Accelerate to 40%. You have them talking about confidence in two years of 40 % growth in 27 and 28, and for the first time, giving a periodicity of when they can get to a trillion dollars of revenue, saying in the next five to 10 years, you're going to see Amazon Web Services get to a trillion dollars of revenue.

16:07So I would actually argue that you did see a lot of signal come last week. It's just the market's kind of digesting that. Okay, so you used the word signal twice. So I know these are not your companies. These are covered by your colleague and friend of our show, Stephen Byrd. Some of the companies that literally power AI, right? The powered shell providers, or Kelly's got her own term for these companies. It was like AI landlords, which is easier than powered shell providers. But the names that we know, right, that we've seen. Some of these stocks are down 40, 50, 60 % in the last 90 days. Is that a signal about any of the companies you cover or is it its own thing?

16:47I think it is almost sort of a symptom of the market being concerned about the ROIC. When you think about how you invest in tech cycles, you make the most money early historically in the semis, the silicon, the hardware, in this case, the power, powering AI. So when you think about sort of moving through this cycle, when the market gets concerned, is there going to be enough revenue in the end to justify all of this spend in the beginning? It's the first place investors move out of. And so it sort of is, I think, two dynamics for these power names and for the beginning of this investment cycle, the semis, the hardware, memory, et cetera.

17:27One, we do need to see more revenue and more ROIC come from the software layer or the infrastructure layer. We do. We do. And then secondly, we need the CapEx numbers to be cleared up. And we still think there is one more significant step up in CapEx to come in 2027 from the hyperscalers because there is good signal. There is go ROIC. We are still compute constrained. And I don't think everyone's going to slow down spend as of right now. So I keep asking quarter by quarter, is this the quarter? Is this the quarter? And you're saying no, all of 2020. So is that like in fourth quarter of this year for 2027?

17:59Or you mean quarters into next year, you think they're still going to be raising CapEx? I think they're raising CapEx significantly one more time in the fourth quarter, because at that point, all of them will give visibility into 2027 CapEx. You know, for perspective, when we look across all of the hyperscalers CapEx numbers, they're going to spend about$900 billion to a trillion dollars this year, 2026. We think that goes to$1.5 to$1.6 trillion next year. So you're still talking about 60 % growth. Now, we are significantly above consensus in some of those. People watch you. They listen to your CapEx forecast.

18:34That's why I'm glad that you can... We try to do it on a bottoms-up basis where we work with all my colleagues of how many chips and racks are coming through the system. How much of these are going to cost? How much does it cost to build a data center? How much does it cost to build the power for the data center? When you do that, you reach this conclusion that there is at least one more big step up in CapEx coming for the market to handle when we get to January. Pushing back respectfully because those hyperscalers, bring up all the names again. We say the term hyperscaler. It just means Google, Meta, Microsoft, the big companies.

19:06A lot of them use some of these other internet power companies that we've talked about, right? They use the TerraWolfs, the HUD-8s, the Cypher Digitals, the EROCs. They use those companies. So if those companies are down, is the market, to your point, expressing concern that that CapEx you just referenced is going to be cut, because otherwise, I don't understand why those, and I don't cover them, why those stocks are down. There's beneficiaries of the spending of the companies you do cover. Yeah, the market is concerned that the CapEx numbers in the near term are not going to grow as much as we think they will, or the market is also looking ahead to 28 and 29 and saying, when is the cliff on the spend going to come?

19:50Now, that is sort of another discussion where We do think that while there's a big step up in CapEx in 27, I think the step up in CapEx in 28 is much lower for a variety of reasons, constraints around power. But it's not a cliff. It's not a cliff. It's just not going to grow as much. And so that's part of what's also being priced in some of these power and hardware, send me these memories names, is the question of when is the last big second derivative step up in that spend? And we think that's 2028. You know the question I want to ask you, and I don't know if I can ask you this question. I certainly don't think you can answer it, but I want to ask you anyway.

20:22Like if you were making a portfolio for your kids or something and you're thinking, I know you're talking the language to investors and professionals about that second derivative that they care about and that will move the stocks. But if I just said, what are the three companies that you think can be the biggest and create the most wealth over the next 10 years? I mean, I would love to know your answer to that question. Yeah. Well, our top idea right now is Amazon. I think that what we're really underappreciating on Amazon is that Amazon Web Services is going to be a critical enabler of Gen AI diffusion across the economy.

20:57When you think about whether it's Morgan Stanley, healthcare companies, retail companies, industrial companies, when they are adopting these models, tools, it all runs through AWS. It all runs through Microsoft Azure. So I think we're still underappreciating the value of their hyperscale business. And then their retail business, we don't talk about it enough, but they're still taking up a bigger and bigger share of overall retail, and they're only becoming more efficient from Gen.AI advances, including robotics. Can I ask you if you would – are you going to cover Anthropic when it's public or Open.AI?

21:29We can't talk about that. Not sure. Okay. Because I want to know what they make the look. He's never even heard of Anthropic. His lawyers, his compliance people, folks, he's never – Anthropic. Like, ooh, what? Foreign language. What are you? Yeah, yeah. We'll circle back up in December or whenever. Brian, thank you so much. Thank you. Really appreciate it. Brian Nowak of Morgan Stanley. All right, still ahead. Can Apple and Palantir earnings reboot the tech trade? The numbers you need to watch as the NASDAQ takes a leg lower. We're back right after this.

22:03John Ternus, the new CEO, preparing for his first ever earnings call as CEO. Mackenzie Segales has details on what we can expect. Mac, what's kind of the one or two headlines we're looking at? So, Brian, so far we've mostly seen John Ternus speaking to hardware enthusiasts. But today is his first Wall Street grilling, and he has been on the road with this new device, Charm Offensive. More choice than ever with a touchscreen MacBook, Apple's first foldable phone, and a push into home tech, all while clearly trying to move customers further up market. Unfortunately for Tertus, that is happening in what is shaping up to be the worst year on record for both smartphones and PCs.

22:43So pricing is doing a lot of the heavy lifting. This fall, lineup of iPhones runs from$1 ,200 up to$3 ,200, while iPads and Macs have seen price hikes across the board. Now, Evercore estimates that that shift toward more expensive iPhone models could boost revenue by 20 % plus. That's helping shore up margin, especially with unit growth expected to fall this quarter. But the real focus today is the December guide. Ternus is up against a record quarter with headwinds like surging memory costs, plus questions about how quickly Apple can ramp the duo and whether it can keep quality control tight as those display failures continue to pop up.

23:22Guys? Mackenzie, thank you. Thank you, Mackenzie Sigalos. Appreciate it very much. Let's talk a little more about this now. Apple's not the only key company reporting tonight. Palantir is also on deck after the bell, and the shares are up 50 percent over the past three months after a rough patch of their own. Apple's up 10 percent in that stretch, down about 2 percent today. Our next guest, optimistic on both names, but Apple has the higher bar to clear. James Demert is the CIO at Main Street Research. It's great to see you. Talk us through Apple a little bit. What are you thinking? Yeah, turn us first go at it.

23:52And I think that this should be good for the AI trade. They almost never... What do they have to do with the AI trade? Well, they never miss, right, if you go back. And I think that for tech investors in general, we need to have positive revenue guidance. I think we're going to get a lot of it on that Apple call. I think the key here is investors are concerned about the margins for Apple with the memory prices. So I'm really interested to hear what they're going to have to say around that and also in their guidance. I think that since Ternus is more a product guy, maybe he can give some visibility for the next few quarters of new product development.

24:28I think that would be good for the stock. It's really been a safety trade. Thank you. Thank you. I was going to ask, but you either read my notes or read my mind. The first one will be weird. The second one will be weirder. Is this a safe haven stock? Is this other stuff gets sold. Let's park our money in Apple. Even if we don't care about Apple, it's just we know Apple's, I don't want to say utility, but not unlike a utility. A bit. They would hate that probably, I know. They're away from the AI CapEx ROI drama that we've been through, which I think the market's completely overblown. But one should think about this, when we think about it as a safety trade, it's trading at 35 times earnings.

25:14It's not cheap. So it's really important when they talk about margins, those margins, which are about 15 % on the iPhone, they can maintain those. I think the stock is vulnerable if they cannot, but we own it and we're bullish. Palantir, what are your thoughts? Carpent Company. Boy, I think they're going to double revenue. When? That's a big number. I think they're going to print this quarter. That's year over year. It's a big number. You know, you think about the stock went down 50 % this year. So it really got clobbered. They threw it out in the SaaS-pocalypse with everything else. Brian's favorite term, by the way, SaaS-pocalypse.

25:52No, no, no. Staycation is my favorite term. SaaS-pocalypse was second. Staycation. To Cyber Monday. Yeah, exactly. SaaS-pocalypse. Wait, double revenue from when? Quarter over quarter? Year over year. Year over year. A doubling of sales. Yeah, we think they'll hit it. And what's fascinating is that even though it's a high P.E. stock, they're growing like crazy in the government space. Very interested to hear what they're doing in the commercial space because they seem to be getting more and more growth through health care and financial services. Now, at 80 times earnings, that is not cheap, but it's one of the first times you've been able to buy the stock at a P.E.

26:30lower than its growth rate. So we're bullish. Lower than its revenue? No, which growth rate? Growth rate revenue. Right. Yeah. Okay. No, because it's a striking statement. Yeah, yeah. Well, if they hit it. If they hit it. And that's why it's Carp and Company's show to show us. And I think that, again, this would be another one of those, what this market needs. The sentiment in tech is so awful, right? We've probably seen this a couple times this year. We need a few companies. I think AMD maybe this year or this week. We're going to see that come. Arista tomorrow. We need a lot of these companies to really beat and give this market some revival.

27:05All right, James. Thank you. Great to have you here today. James Demert with Main Street Research. All right, coming up, oil is also down. Hopes growing for a peace deal in the Middle East. Is this the sign of real progress? We mean it this time, or yet another market head fake. We'll talk more about that coming up. Oil prices, they're down. In fact, crude oil is down over 7%, dropping below$97 a barrel, again, on the paper contract. But that decline comes as senior American and even Iranian officials signal they are open to a possible diplomatic solution. Secretary of State Marco Rubio says President Trump prefers not to use military force against Iran.

27:46But folks, you all know this. We have seen this play out before. Oil falls on hopes for a peace deal only for the momentum to fade as attacks resume. And as I have reported a lot, it is still unclear really who's in charge or speaking for Iran. So are today's headlines a sign of real progress or another head fake? Joining us now is Richard Goldberg, senior advisor for the Foundation for Defense of Democracies. He previously was national security advisor in the first Trump administration and helped craft some of the toughest sanctions imposed on Iran. Richard, you've been dealing with Iran off and on for over a decade or longer.

28:25You know the country well. I know the leaders have changed for obvious reasons. Where do we stand? Are you hopeful there is real chance of lasting peace? Or is Iran just sending the same exact stipulations and conditions as it has every month for the last eight months? Yeah, I mean, I think it's clear the president is sort of exercising his maximum optionality here. He's letting the Qataris run wild with the diplomacy while you see a lot of forces moving into the region, clearly being prepared in position for a military action as well. I have yet to see anything out of the leaks of these Qatari-Iranian negotiations that shows any terms that the Iranians say they're agreeing to that are materially different than that summer memorandum of understanding.

29:18Obviously, back then, the president would have seen the Iranians having more of an upper hand. No oil was flowing out of the Strait of Hormuz, the energy market in great stress, and he went into that MOU. Today, he's used the U.S. military to reopen the Strait of Hormuz without a deal. And there's a blockade in place. So if they're just offering some sort of dressed up version of the last MOU, it seems hard to imagine the president saying yes to that. Unless, Richard, and I don't know if you saw, you know, the comments over the weekend from Tucker and others warning that nuclear attacks are next in all of this.

29:53I mean, do you do you think that those kinds of escalatory moves are seriously on the table if this diplomacy doesn't work? I've never heard any discussion of the use of a nuclear weapon. I don't think that is on the table. It would shock me greatly for me to wake up to that sort of news. There's been talk of the mother of all bombs, the MOAB, being used potentially on a site called Pickaxe Mountain. But that's the most advanced, the largest conventional weapon. Listen, I think there is an open question, and that is whether or not Central Command, the U.S. military, has a new approach to underground facilities.

30:29We saw during major military operations repeated strikes on missile cities, command and control bunkers. We never saw a strike on that pickaxe mountain because of how deep it is. If we think the military has come up with a new solution to try to penetrate these bunkers, then you have a lot of options on the table to do damage to their missile capabilities that they have retained in those underground cities, go after leadership, and, yes, take out remaining nuclear sites. If you can't do that, I think the options on the table are very different because you'll have to be prepared for the retaliation across the Gulf.

31:06We know Iran is selling little to no oil. We know their currency has imploded. Do we really know anything about the actual condition, Richard, of the Iranian economy? What we have to go on in the open source are public statements and certain leaks that have come out, statements from the Trump administration. When you hear Scott Besson say they're not paying their people, not paying their soldiers, I actually take that comment on its face. I would imagine they're getting a lot of intel in the White House about the financial situation and what's being done to try to triage inside of Iran. and I assume they are not making payroll.

31:45And so one of the best the president probably has is they're going to get to election day. You've heard them speak to the Iranian leader saying, I know you think that if Democrats take control of Congress, somehow the game is over, you win. That's not how it works in our system. And so on the Iranian side, it's possible. They've been telling their people, just hold on, just hold on to November 3rd. Trump's gonna have to come to us hat in hand, just hold on a little longer. I know it's hard. What happens on November 4th when they wake up and see Donald Trump, still president, controls the U.S. military, and the blockade is still in place.

32:18That's something I think the president wants to see play out as well before the consideration of major military operations. What do you think would happen in that scenario? What do you think their response is likely to be if they realize, OK, the potential change in control of Congress doesn't amount to much? Well, there's two options. One is they say, OK, this is not going to work. We do need to cut some better deal. The other is that they say, hang on till January. The Democrats are going to be sworn in and then they'll try to cut off the money for this operation. Just hang on a little longer.

32:50At that point, I think you see the president opt for some sort of military strategy. All right, Richard, great to have your perspective today. Thank you. You bet. Richard Goldberg. Let's get over to Frank Holland now for the CNBC News update. Hi, Frank. Good afternoon, Kelly. A group representing nearly all major automakers is urging Congress to pass a permanent ban on the sale of Chinese vehicles in the U.S. A Senate committee already passed the bill back in July, and a House version of that measure has more than 100 co-sponsors. The Alliance for Automotive Innovation, which represents General Motors, Toyota, Volkswagen and others, says Chinese imports, they carry a national security risk.

33:27The Massachusetts mother accused of killing her three young children will be back in court in two weeks as the judge considers her legal team's bid to get that case thrown out. Lindsey Clancy's trial earlier this year had ended in a hung jury. Her lawyers say she should not be held criminally liable for those killings because she was suffering from postpartum psychosis. And Cleveland Guardians pitchers Emmanuel Clachet and Luis Ortiz went on trial today in New York over charges. They allegedly rigged pitches to help gamblers win money on prop bets. Both players have pleaded not guilty and are on non-disciplinary lead without pay from the Guardians.

34:00Kelly, back over to you. Frank, thank you very much. Coming up, a rare interview with Mark Davis. Our Michael Ozanian sat down with the Las Vegas Raiders owner to talk private equity, sports franchises, and what's next for the business of sports and maybe for the Raiders, too. Stay with us. Fresh office team's 38-33 victory over the powerful New York Jets. Las Vegas Raiders owner Mark Davis just sat down for a rare interview with CNBC. Mark's dad, Al Davis, bought the team in 1966 for a cool$180 ,000 today. I imagine. Yeah, I know. Well, you had to have$180 ,000 back then. Today, the Raiders are valued at$13 billion, according to CNBC data.

34:46Joining us to talk about more on this and more is CNBC senior sports reporter Michael Ozanian. Not a bad return on investment. No, pretty good. That move from Oakland to Las Vegas has worked out really well, Brian. But one of the things I did want to ask Mark about, and we discussed at length, was with the influx of private equity money now coming into the NFL and several teams taking private equity money, Mark Davis has chosen a different path. He's brought in an entirely different group of investors, none of which has been private equity. Take a listen to his reason why. I think the private equity has brought a lot of value to some of the teams, teams that probably want just investment versus help or added value.

35:36For me, that wasn't the case. I wanted people to come in that were going to add value on top of the investment. If you like YouTube, you'll love YouTube Premium. It's destroying athlete, creator, and YouTube Maxer. YouTube Premium enhances how I use YouTube with awesome features like offline downloads so I can download my favorite training videos before I hit the gym. So no Wi-Fi doesn't turn leg day into loading day. Plus, I get ad-free videos, background play, and so much more. YouTube Premium is like YouTube got some extra gains. Try YouTube Premium for two months free at YouTube.com slash premium.

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36:18Oh, look. You just got added to a meeting about coordinating another meeting to prepare for the pre-meeting ahead of the follow-up meeting, which will, of course, require a recap meeting and then another meeting. Hit your booking point, book with Southwest, and enter airplane mode.

37:07at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts. Now, I mean, Mark Davis is, this is a great get to use the TV speak, Mike. So you're talking about private equity there, but there's so much more to talk about when it comes to the Raiders and the coaching and the staffing and everything, all the changes that they've had. Well, of course, I asked him whether or not Mendoza was going to be playing anytime in the near future. He had some very interesting thoughts on that. He's not going to rush Mendoza. The interesting thing are the type of investors Davis has brought in.

37:41The Raiders had the third highest revenue in the league in 2025. Yet Mark thinks there's much more room for growth. And if you look in the investors, he's brought in very tech savvy. He's also brought in guys from TKO Holdings who own the mixed martial arts UFC. So he really thinks there's a lot of room for revenue growth. And Mark said one of the key things is you need to know what you don't know. And that's why he's brought in these investments. Listen, my Chargers are 0-7. They stink. They're the worst team in the league. So I'm all in on the Raiders at 4-4. We had Ice Cube on the show the other day.

38:13I joked, I said, can you buy the Chargers? He said, I'm all in on Raiders Nation. They're a team, maybe, what else? Dallas Cowboys, Pittsburgh Steelers, and Raiders are probably the only three national football teams. That's a great point. Because everywhere you go, there's Raiders Nation. That's a great point. You go to look at your Jet game yesterday. Not my Jets. Tons of Raider fans there. To your point about it being a national team at the game yesterday, if the family was there, it was all Raiders fans. I think that might say much about the Jets. They travel well, and they live everywhere, too.

38:47So Mark has got a national franchise. I think it's fair to say, right? Absolutely. Absolutely. And that brand, that national franchise, is something he can expand on. Look, how's the Death Star doing? The stadium, that's what they call it in Vegas. Oh, it's doing great. I mean, you look at what they do in concerts. Most NFL teams, the national revenue, which is what's equally shared, is about 65 percent of total revenue. Local revenue from the stadium is 35 percent. The Raiders have flipped that model. They draw so much from tickets, luxury seating, concerts. They have that operation year round at the stadium.

39:28Yes, they do. Mike, I think there's going to be a lot of interest in this interview. The full thing doesn't drop till Thursday. That's right. Yeah. Look forward to catching that. Thanks for joining us. Thank you. Highlights, Mike Ozanian, our senior sports reporter. That interview will be Thursday on the CNBC Sport Newsletter, so make sure you don't miss it. Coming up, I-bonds are back with yields topping five and a half percent. Should you buy them? Sharon Epperson is here with the tips. You might have seen the headlines. I-bonds are back with a 5.5 % rate for the first six months. That rate is higher than the 10 and 30-year yields on the U.S.

40:01Treasuries, but the rate can change with inflation. And the question is whether this deserves a place, as we say, Sharon, in the portfolio. Yes, joining us for more is CNBC senior personal finance correspondent, Sharon Epperson. Yes, I'm a little burned by my personal investment in I-Bond, Sharon, which we ejected as I watched a market go 40 % at the same time. Anyway, what would you tell people about that? Well, I think it's really important to think about what you're gonna need the money for, because that is something to consider with I-bonds. But what people are looking at now, I think, is safety.

40:29They're concerned about market volatility. They're looking at 5.5%. They're saying that's pretty decent. But what they should be paying attention to the most is the fixed rate. Even though 5.5 % is the highest rate we've seen in I-bonds since November of 2023, if you look at a chart going all the way back to 2000 or so, we are seeing now I-bonds fixed rate at 1.4%, the highest that we've seen in 20 years. And that's for the life of the bond. It will keep drifting higher, Will. Isn't it some sort of average of— So the fixed part will remain at 1.4%. It will. What changes is the inflation-adjusted part, and that will vary every six months.

41:05But, you know, it's pretty good to know because we haven't seen a fixed rate that high for people who are interested in it. Here's the thing that you have to keep in mind. There's several restrictions with I-bonds. You have to—you can only put in about$10 ,000—not about. You can only put in up to$10 ,000 each calendar year. So if you want to be savvy, some financial advisors are saying, do it now before the end of the year. Do it again at the beginning of next year before the April 30th. Yeah, exactly. And then the other thing is you have to hold it for 12 months. So this can't be money that you're anticipating you're going to use for the down payment on the house that you want in the next six months.

41:41No, this is money that you're going to keep in that account for at least 12 months. And if you take it out in under five years, you will lose three months interest. So these are all things that people say, well, maybe there's a better way to go, whether that's a high-yield savings account, whether that's a one-year treasury. Yeah, and when they kind of became in vogue suddenly a few years ago, when we had inflation for the first time in years, a lot of people bought them then. Does the rate vary? And I thought at the time the inflation rate might disappoint. It might go back down. No, it just—the yield keeps going higher.

42:15So can you capture that benefit if you bought them back then? Or do you have to, would you want to wait if you think that? Well, because we've seen the inflation adjusted part fluctuate and that fixed rate was so much lower than it is right now. You know, I think a lot of people felt like, well, OK, 9 percent, but it was a 9.62 percent in May of 2022. That was great. And that's when everyone was flooding in. But then you realize what some of the restrictions are. And quite frankly, in this economy, when people need their cash, they waited a year. they took that money out because everything else, the price of everything else went up and they needed the money.

42:50How do we buy them? Like, where can you buy an iBond? You have to go on treasurydirect.gov. That's the only place that you can go. And you need a strong drink and maybe an AI agent to deal with that website because it is not easy. And you have to have ID.me now. They want to make sure that you're identified with the way that you would have to do if you set up your account with IRS, with the Social Security Administration. So it's important to do the ID.me anyway to deal with government websites. but it can take a little bit of time. You mean like the same identity thing we have to do for like pre-check?

43:21No, it's different from pre-check. Different. It's different from pre-check. Go on there. Have fun with it. Take a look. Have fun with it. Is that your idea of fun, Sharon? I don't know. What do you want to do tonight, honey? Let's go on treasurydirect.gov and play around. Instead, you should figure out, okay, this may not work for me. I need to figure out what's going to make my savings go further. And so you're going to go to the Money 101 newsletter. You're going to sign up at CNBC.com slash Money 101 and get my Money 101 newsletter. That's fun. And you can do that with your wife and your kids and have a blast.

43:53I can't wait. You can't wait. You just, that's my Friday night. Sharon, that's my Friday night. You've got to send it to all of them. Send them QR code. I love QR codes. They work, by the way. And it's a much easier sign up than it is for Treasury. Much easier. We've never seen Kelly so rage filled. You're talking about selling the I-bonds too early or something. We're out. We objected like we're skydiving. Get me out of there. Sharon, thank you. Sure. Sharon Epperson. All right. Thank you, Sharon. Let's get a quick check on hotel stocks. Hotel stock shares are higher after stronger third quarter results and full year guidance from Marriott and Choice Hotels.

44:29Look at that. Marriott's up today. Choice, Hyatt, Hilton, they're all up. Hilton's up about 2%. But Marriott and Choice, they're all doing well. By the way, you know who used to, well, I think, are we promoting very sternly now or after the break? We're going to do it after the break. Coming after the break, I'm going to tell you what's coming up after the break. The tease. But tomorrow on this show, speaking of hotels, Barry Sternlich, the CEO and chairman of Starwood Capital Group, is going to be our guest. Kelly, it's going to be a long-ranging interview. We could talk about what? Real estate, hotels, consumer, midterms and more.

45:04Barry doesn't hold back. This will be – I'm really looking forward to hearing from him. He always is able to shed light onto what's happening in the economy broadly too. Speaking of, I don't know what we say, tourism, real estate, hotels, all of the above, this image might be familiar to some of our viewers. It is the famous Blue Lagoon in Iceland. If you've ever been, you know what I'm talking about. I mean, to Iceland, because everybody goes. It's a geothermal spa, actually started as a way of treating psoriasis by a doctor. Plans to raise$115 million in an IPO on Nasdaq Iceland. They're looking to cash in on the country's tourism boom and would become their only publicly listed tourism group.

45:40Brian, they tried to do this a few years ago, had to pull it because of volcanic activity. I think we should get Bjork on the show. I think we should get Brooke Shields on the show. I think we have to go. It's a fun trip, by the way. Iceland's cool. You got to go just for the ride to the airport. Iceland's cool because its name is Iceland. Thanks for watching. It looks like the moon. Closing bell starts right now. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab provides an information-packed daily market preview on stock updates, U.S.

46:11and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast, or find Schwab Market Update wherever you get your podcasts.