10AM Hour: UBS CEO on U.S. Growth, Russia Plague Risks, Nuclear Power Deal 10/6/26

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0:43and 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 marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts. Good Tuesday morning. Welcome to Squawk on the Street. I'm Sarah Eisen with Carl Quintanilla and David Faber. We are live, as always, from Post 9 of the New York Stock Exchange. S &P 500 and Nasdaq touching record highs this morning. The S &P's first since early August. We'll talk with longtime market watcher Ed Yardenny for his read on the rally.

1:15Also ahead, the CEO of UBS is with us. We'll talk about the company's wealth management push, and we'll get his take on the volatility in the European bond market and how long that could last. Plus, we'll talk with an infectious disease expert as President Trump offers to assist Russia following the death of a lab worker at a plague research institute in Siberia. Also, Undersecretary of Defense Emile Michael will join us after just being named to President Trump's super intelligence force. We'll talk about what all of that is about. But guys, I wanted to start in Europe because everybody is now watching French bonds.

1:49I mean, this has become the sort of center of the storm. And they're coming in today, which I think is providing a little bit of a rally. Yields lower. That's a little better. But what everybody started to notice is that these yields had surged and cost more to borrow in France than in former debt hotspots like Greece and Italy, which brings back bad memories, right, of the European debt crisis. And I'm not saying that there's anything like that right now. But, you know, we watch it. And it certainly has been a point of nervousness for the markets. Here, if you look at the one-month change, for instance, and what's happened with the 10-year French debt relative to other major economies, and you can see it's very elevated.

2:31The cost of insuring for credit default swaps for some of these banks in France, for instance, have risen above other banks in Europe. France has more than a trillion dollars in debt coming due by 2030. Next year, it's set to sell a record$380 billion in debt into a market where, you know, there are questions about reliable sources of demand. And there are also questions about the politics there and difficult decisions. We've seen a number of prime ministers. There's an election for the presidential election that's coming in, what, six months or so next spring, where Marine Le Pen, far-right leader, is out this morning promising deficit measures.

3:07But also, you know, France has not been able to rein in its deficit. I mean, this has been a spending story and a sprawling welfare system that has conditioned the public to expect high levels of government spending. And so when you start to move toward extremes in politics, the market gets 5 percent of GDP. The deficit is around 5 percent of GDP. Yeah, right. And it's supposed to be 3 percent, according to your. Where are we, by the way? Well, Le Pen says she's trying to get to three by 2032 at the latest. in her words. Yeah. By the way, we're going to talk to Ed Yardini in a moment, who had a great chart this week of all the major economies where the 10-year has risen the most in a year.

3:45France is number one. You want to guess what number two is? We are. The United States. Yeah. More than Italy, more than Japan, South Korea, Greece, India, Germany, Ireland, Taiwan, you name it. Yeah. I mean, like, our deficit is above 6 percent. It is. Right now. But in the U.S., it's a good thing to have the reserve currency. It's exactly we have the reserve currency and people don't worry about defaults and that sort of thing. In France, I think there's a little more concern. I mean, look, here's a quote, Marine Le Pen, on the new budget proposal, Carl, that you just mentioned. If the French do not choose a political break, France is heading toward default.

4:21President Macron failed to anticipate the slightest economic, financial, or budgetary policy capable of preventing the noose of interest payments from strangling France. Right. Well, it's that old spiral, right? Your cost of borrowing goes up, your interest payments It's become a larger component of your overall spending. Yeah, now we're at the highest. And then you just keep spiraling down. Although, I do know another country that has that going on. Yeah. Where they spend more on interest than they spend on virtually anything else. Virtually anything else, yeah. Yeah, so we watch the rising bond yields, you know, as a test of the discipline that ultimately needs to be imposed by these governments.

4:58What's it mean for the euro? And what does it mean for the euro zone? And what does it mean for any aid that might come their way? A lot of people are watching the euro. If there is aid or buying their bonds, I don't know. Well, it dropped sharply yesterday, and it has been dropping today, a little bit of a comeback. But that's the question, right? If there's worries about contagion spreading beyond France's borders, then you'll see that in the euro. There's also always concern when you have extreme governments polling well about the fragility of the euro. You know, you haven't heard Marine Le Pen talk as much about that this time.

5:28But in the past, she has campaigned against the euro. Also, there's been some discussion on how the ECB's tools work. They don't click in when one country's or one member country's spreads blow out. They kick in when monetary transmission gets broken. So there's an element of fear. Although there has been a pattern in the past where the ECB has stepped in to calm bond markets when they feel like when it's been unruly in the past. I mean, they've used those tools like the Fed has used the tools. We'll watch it. The rebound today, I think that's what's given permission for everybody to rally. But, you know, these are levels that certainly have caught everyone's attention.

6:05And just, you know, on the subject of politics matter to the bond market and to the markets overall, I don't know if you guys have been following what's going on in Brazil, but huge rally in the Brazilian stock market yesterday after, I think, some surprise results. And this was a first-round election where Bolsonaro, the right candidate, had a big comeback and beat the Lula, you know, faction. and therefore this goes to a runoff in the end of October. But there's a lot of optimism there, much like I think we saw in Argentina. Well, it's his son. I know that's funny. It's Bolsonaro. He's in prison.

6:38Right. This is his son. For attempting a coup. Yes. But I think 47 percent of the vote versus 45 percent for Lula. That was a surprise and considered more pro-business and pro-growth. So politics matter right now for the markets. Well, let's talk about that broader market as the S &P and the Nasdaq hit record highs, is bringing Ed Yardeni. Carl just mentioned him, president of Yardeni Research. Good morning. And I guess, you know, Sarah's been talking about the French bond market and I expect we'd start there, but we might as well. I'm kind of curious as to whether you have any thoughts on what's going on over there and how important it may be.

7:13I think it's very important. Clearly, they're on the edge of a debt crisis and it's not clear that their political system is in a position to do very much about it. Kind of very reminiscent of what happened in 2010 during the Greek debt crisis. You know, when you get a crisis, basically it's my friends, the bond vigilantes kind of running wild and basically demanding that there's a political solution to reducing the deficit. It's very easy to reduce the deficit. All you have to do is increase revenues and lower outlays. But getting that through a political system is the tough part. And that's very difficult right now with the political chaos that's going on in France.

8:00There's another political system that's not exactly delivering results and has enormous budget deficits and a huge national debt and interest payments that exceed every part of the budget. But yet, you know, what are your thoughts when it comes to the U.S. bond market? Well, there's kind of a spectrum of possibilities here in terms of what's pushing bond yields up in the U.S. I'm inclined to think that it's still mostly about better than expected economic growth, better than expected productivity. We clearly have an economy that's getting boosted by ongoing resilience of consumer spending. The baby boomers are retiring with like$110 trillion of net worth and their spending and And they're helping their young adult children, I think, cope with the affordability crisis.

8:53And then we've got capital spending boosted by AI. And, oh, by the way, we've got a federal deficit that's$1.7 trillion. So the economy is operating basically in all cylinders. It's very strong. And I think the Fed and the bond market have concluded that the neutral interest rate at which the economy can grow with stable prices is higher. It's not lower, as was widely thought at the beginning of the year. At the beginning of the year, Fed officials were saying that the federal funds rate was still mildly restrictive. Now the last comment on that was from Fed Chair Walsh who said, we just removed the dose of accommodation, implying that they have to increase rates some more.

9:36And I do think they got at least two more rate cuts ahead of the next six months. So I would put a kind of a happy face on a kind of concerning situation in the bond market and say it's mostly because the economy is doing so well. But on the other extreme, of course, as you said, there's similarities between what's happening in France. So, Ed, the Times took a crack at that yesterday, arguing that the AI spend appears immune to any kind of reaction from rates. And that's a bit of a conundrum. Meantime, housing is in the doldrums. More than half of the Russell 3000 is in a bear market. I mean, how much can they work on the strong part without really breaking the weak part?

10:26Well, the strong part is, as you said, is not that sensitive to rising interest rates. Even the consumer, all these retiring baby boomers, when they see that interest rates are going up, it's a positive for them because the money that they have in money market funds or even in bank deposits, those yields are going higher, so they're not particularly upset about that. But as you said, the housing market, which has been in the doldrums, has been in a recession for a while. That's not coming out of it anytime soon. And then, of course, we have the potential for some weakness in the auto industry.

11:06But the AI industry looks as though it's just, as you said, interest rate insensitive. And on the other hand, the federal deficit is becoming increasingly interest rate sensitive. So I think right now interest rates are basically back to normal. People have been using the phrase higher for longer for interest rates. And I think that this is the point that actually interest rates are back to normal. Who knows what normal is anyway these days? And I mean, it's been a while. So I talked about Brazil. We talked about France and the politics mattering, especially when the fiscal situation gets a little dicey.

11:48Do you think there'll be an impact into midterm elections or out of midterm elections on overall markets because of all this? Well, it's interesting. We're almost undoubtedly going to have more gridlock as a result of the midterm elections. Clearly, if the Democrats will get a majority in the House and or the Senate, There'll be a lot more gridlock, a lot more partisanship than ever before. And in the past, gridlock has been bullish for the stock market. Investors like it when politicians can't do too much damage by kind of not being able to agree on things. But if we get into a debt crisis mode and we need a political response, We need legislation to convince the bond vigilantes that we're putting ourselves on the right course with regards to the fiscal budget.

12:42And we can't do that. That would be very good. That would be not a happy scenario. I just think the resilience here is just worth highlighting, you know, just how the not just the U.S. The global economy has been able to absorb tariffs. Everyone thought tariffs were that was that global recession. That was it. Higher energy prices, you know, up to one hundred dollars a barrel. Forget it. Guess what? We're at record highs now for the market. And now higher interest rates as well. Well, the U.S. economy and you're absolutely right. The global economy has been hit by a lot of shocks really since the beginning of the decade, starting with a pandemic.

13:22And through it all, we really have not had any downturn in the U.S. economy or the global economy. It is something that a wonder to behold. I haven't really been that surprised by it. We've been talking about the roaring 2020 scenario for the U.S., but it seems to be playing out for the global economy. And now we'll see if the stress test that the global economy is facing, whether the higher bond yields are finally going to have a negative impact on the global economy. I don't think so. I mean, it could in France, it could maybe in some other areas where there's vulnerability. But all in all, I think the AI trade is a huge global stimulus.

14:08And, you know, we've got a lot of emerging economies with emerging middle class consumers who are very aspirational. And I think that's also keeping the global economy very much in time. Ed, thank you. Always appreciate it. Thank you. Here's our roadmap for you for the rest of the hour. After the break, the CEO of UBS joins us here at Post 9 as the company makes a push to grow its U.S. wealth management business. We'll, of course, get his take on the market here and abroad as well. Plus, David Ellison's Hollywood mega merger becomes a mega buyout official today. It is done. We'll have you some new details on that deal in which Skydance bought Warner Brothers Discovery.

14:48And we'll assess these reports of a plague risk out of Russia following the death of a lab worker in Siberia with a top infectious disease doctor. All-time highs here at 7830 as Squawk on the Street continues. Legacy credit scores only look at a brief snapshot in time, and that limited view often leaves millions of qualified credit seekers out of the picture. Vantage Score is changing that by modernizing credit scoring. Vantage Score uses 400 % more credit and alternative data to create a fuller picture of financial behavior, including trended credit data, rental payments, and timely utility payments.

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16:07Make work less work. Try Google Workspace with Gemini at goo.gle slash workspace with Gemini. 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. and 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 marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. Welcome back to Squawk on the Street.

16:47UBS is one of the largest wealth management firms in the world with over 73 billion dollars in net new assets in the first half of 2026. Now looking to boost its wealth management business even farther away from the companies from the company secured a U.S. bank license earlier this year. It's been doubling down in the U.S. Joining us here at Post 9 and the CNBC exclusive is UBS CEO Sergio Armadi. Welcome back. It's good to have you. So talk about the strategy in the U.S. Because, I mean, I know it's been important to you for a while, but why now do you think it's a good time to go even further against some of the big competition that you have here?

17:23Well, first of all, we have been here in the U.S. We manage almost half of the five trillion assets we manage globally. And last year, the U.S. has added 1 ,200 millionaires a day. 40 % of the millionaires in the world lives in the U.S. So as a truly global manager of wealth, you need to be in the U.S. to be successful. And we continue to see growth alongside with Asia in terms of creating value. And so we are further investing in capabilities to stay competitive. Is that because the AI boom is happening here in the U.S.? No, no, I think it's, you know, you look at the dynamics, it's GDP growth, but also at the end of the day, it's through innovation, it's creating monetization opportunities, which is a big driver for us in terms of value, net new assets creation.

18:25You mentioned the$73 billion we generated so far. They were mainly coming from monetization or M &A activities. How does that compare with Europe and what's happening there? Well, Europe is definitely not growing and not creating a lot of wealth. Europe is rather using and consuming wealth. And this is one of the topics that we see having to address. We manage more Europe as a gaining market share rather than taking the opportunity to grow because of wealth creations. Are you worried? I highlighted what's happening with French bond yields this morning. Are you worried? Are you having any kind of deja vu about the debt problems over there?

19:11Well, we went through similar situations in the last 10, 15 years in Spain, in Italy, in Greece, in Portugal. And it's quite funny to see how these countries that went into a big crisis now, they are the best performing countries in Europe. So most likely you're going to need to see something similar developing in other parts of Europe in order to restore a credible path to growth. You mean austerity? It needs to go through hard measures. So I don't think it's incremental. Small changes are not going to be enough to resolve the big debt pile. Are their travails more acute or intense than the other examples that you mentioned that we managed to get through?

20:01It's the size. The size. The size of the French economy, in that case, about France. And, you know, the historical social topics. If you think about all major social developments in the last 30, 40, 50 years, they've been starting from France. So you see them going on the street no matter, very, very fast and creating also a lot of political pressure. So do those fears, does that all just plow money into North America or the U.S.? I mean, are we benefiting from some of their turmoil? Not necessarily that one. What the U.S. still benefits from is the fact that the dollar remains the currency of reference.

20:53And if you want to invest and diversify globally, you need to go through the U.S. and you need to go through the dollar. So it's not necessarily because of this situation. You know, I'm curious in terms of hearing you talk about Europe and obviously the growth opportunity here in the United States. you're under some pressure from the regulators i guess in switzerland in terms of capital levels to make sure there's not another credit suisse problem obviously you dealt with that by buying it and help them some shareholders suggest this idea that you could either split both into international and then u.s or the rest of the world or even move out of switzerland is that a real possibility well of course i i don't really want to comment on the many ideas or views or opinions on the matter, other than saying that some shareholders, rightly so, are concerned about what happened.

21:48And we fully understand at this point in time, our focus is really to try to do the best out of what we have. And we do believe that being based in Switzerland is for the good of the Swiss economy and for our clients and our shareholders. But of course, you know, we will need to consider what needs to be done in the future in order to preserve and take care of the interests of our shareholders, our clients, but also our people. So does the capital level at a certain point make you less competitive than many of your competitors? Yeah. Now, you know, higher capital requirements in a still fairly global financial world is like having higher tariffs than if you are an importer or an exporter.

22:39So, of course, higher capital means higher cost of the services you give to the economy, to clients, and therefore it may impact our ability to compete. This is the 90 percent CET threshold that basically, I guess, was a surprise that the the upper house one in conjunction with the government proposal? What do we need to know about Swiss banking law? Well, you know, what you need to know is that Credit Suisse didn't fail because of lack of regulation. It's because the regulation was not properly implemented. And this was not just due to the lack of focus by the board or the management, but also the fact that they got regulatory concessions that we're allowing the firm to go on for too long.

23:31I'm curious as to how you think about the capital markets in this country. Obviously, we talk about your advisory business or the old Payne Weber and all those assets. But are you seeing significant flows there? Your expectations that we're going to see a lot more business being done, and you're going to be able to take a share of that, a significant share? We hope so. I mean, the demographic, I mean, if you look at the secular trends supporting our industry, wealth creation, the fact that people, demographic trends, aging population that needs to save more money, you know, drives the necessity of our capabilities in wealth management and in asset management.

24:12So we continue to see that momentum playing out. And as we mentioned before, innovation is also a big driver. I mean, innovation drives monetization, new investments, and being at the center of this dynamics of entrepreneurs growing their own businesses and then potentially monetizing it. It's where we want to be. Well, you guys were part of SpaceX, I believe, right? We were part, yeah. So, I mean, it was a huge deal. I guess, what does the pipeline from here look like? And obviously, we're expecting two other biggies with Anthropic and OpenAI. Is that ultimately a good thing for the capital market?

24:57It depends. It's going to depend on valuations. I think that as we speak, things have become a little bit less enthusiastic, if I can say so, around IPOs and valuations. There is a lot of questions around how feasible it is to really go on at that pace. If you go back historically in comparison to the TMT bubble, and if you go back even to the 1929 crisis, the level of this IPO as a percentage of market cap is mind-blowing. So do you have concerns about valuations? I think one has to be concerned. And for sure, what we are recommending our clients to stay diversified, both in terms of geographic diversification and sector diversification.

25:50And also, in that respect, not to really take too much exposure on single names or single situations. Can I finally end on cyber? When I talk to some of your peers who run other financial services companies and or board members, that is always one of the, if not the most significant concerns, particularly given with the advancement of AI right now and the tools. How are you thinking about it at UBS in terms of the risk of some cyber hack that could cause significant problems in the financial system? Well, it's quite interesting that if you go into banking nowadays, we spend as much time talking about market risk, credit risk, as we do about cyber risk and suitability risk.

26:35if you look at what's going on. So the so-called non-financial risk is becoming a bigger issue. In terms of cyber, maybe two aspects. One is the classical cyber risk being attacked, but also the physical protection of your digital assets, data centers. You know, in an environment, particularly in Europe, where you see much more, you know, classical war. So what does it need? You know, also protecting the physical access to data and the ability to reduce as much as possible the recovery time. It's not about trying to be 100 % protected. It's about how fast can you recover your data in any incident, being a classical cyber attack or a physical one.

27:27So you mean online, from a drone, anything. That's what you're referring to. Exactly. Finally, you know, I remember talking to you after the crazy deal of Credit Suisse, just in terms of how that was put together so quickly during the rescue. But it was 2023, and you said, you know, you came as the fix-it man, right? You came because you got the call. How far along are you? Is that integration done? And what is the... Three months to go. Three months ago, 90 % of the synergies we wanted to realize had been done, delivered. So we are finally going to be finished by the end of 2026. And then we move forward.

28:08And you stay on board still for now? For the time being, yes. Yes. I remember asking you that question during that dramatic moment as well. Sergio, thank you for coming in with an update on the business. Thank you for having me. Appreciate it. With that new U.S. bank charter. That's Sergio Aramadi, CEO of UBS. All right, up next, Paramount closes its deal to acquire Warner Brothers Discovery. That is closed this morning. You can take a look at the new company that represents all of those assets. It is Skydance. Later, we'll also get to the action in Marvell. It's surging this morning. That is, its shares are having an investor day.

28:43We'll tell you some of the things the CEO had to say there. Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that. You get Google's AI built right into the premium versions of Gmail, Docs, Sheets, and more. No new tools. No extra logins. Just one subscription that gives you personalized AI right inside your actual workflow. Make work less work. Try Google Workspace with Gemini at goo.gle slash workspace with Gemini. Weren't agents supposed to take things off your plate? Building another to handle the others is a bit much.

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29:57and 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 marketupdatepodcast or find Schwab Market Update wherever you get your podcasts. It is done. Paramount has concluded its acquisition of Warner Brothers Discovery, that, we'll call it almost$110 billion deal, of course, that we have been reporting on for much of the last year. It is closed at 31 and a tiny bit more, 31.0166, for those of you keeping track. I can retire the file now, guys, so, you know, that's always a nice thing.

30:44That's a big file. We do a little ceremony. We're tired of the file. But it's always fun to go back and look, particularly back at some of the earlier notes when$22,$23 seemed like a price that perhaps this thing would go at. No. Obviously, Netflix coming in unexpectedly, perhaps, and competing with and, in fact, having that signed deal before Paramount came with what we call a hostile offer and succeeded at$31 all cash to acquire the company. not without any number of different obstacles, including late in the game, those lawsuits from those 11 state AGs who tried to oppose the deal on competitive grounds but settled recently, allowing for the close.

31:24Now it's up to David Ellison and Enon Kreis to deliver on the$6-plus billion in synergies they're talking about. Combination of technology integration, migrating, combined company to single enterprise resource planning, corporate-wide efficiencies. I'm just reading some of the things here. Optimize and combine real estate footprint, any number of other things they'll be focused on in terms of delivering, because, of course, they're going to be very highly levered at some six plus and a half times EBITDA. That's a high leverage ratio for the company as we take a look at the stock that is starting its new life down this morning.

32:03But we're going to have an opportunity to speak to both David Ellison ending on cries on Thursday. They'll be here ringing the opening bell, and they are sitting down for what we hope will be, what we know will be a fascinating interview about the future for this company and exactly what it is they're going to be doing to not just deliver on the synergies, but create potential growth. Given all the money that's been invested, obviously some 47 plus billion in equity to take this to help purchase the company. Much of that coming from the Ellison family, the Ellison Family Trust, led by Larry Ellison, but also their partner Redbird in for as much as$4 billion in this deal,$2 billion on the Paramount, or the Skydance acquisition of Paramount as well, and any number of significant funds around the world, Saudi Arabia, Qatar, Abu Dhabi, significant investors as well for this enormous deal, Carl, that they obviously feel is going to deliver.

33:02Yeah. Gulf states account for what percentage of ownership? Almost half? It was, I think, of the$47 billion equity check. My last check on it was that it was$25 billion from those investors,$22 billion from Ellison and Redbird. Don't hold me to that exactly because numbers can change a bit, but it gives you a sense there. So, yeah, almost 25%. So then cutting$6 billion over three years in costs while committing to 30 films. And then I think that number goes up a bit? It may go up a bit as well, but the 30 is a commitment they made, obviously, to the state agencies. They've made it previously as well to the exhibitors, many of whom came on board to support the transaction.

33:40Yeah, absolutely. As you know, it certainly helped the argument they were making that it would not be any competitive. But, yeah, there's a lot ahead of them. Not to mention, obviously, you do create a streaming giant now in the combination of Paramount Plus and HBO Max. But it's not just about the numbers. You've got to actually have these subscribers be profitable and quite profitable, they would hope. And they're keeping Mark Thompson as CNN. There was a lot of attention on this, of course, because everyone—I mean, Ellison and others have faced criticism, right, that they're going to be more pro-Trump.

34:11But I think what he's come out and said pretty clearly is they believe in an independent news organization, both in CBS and in CNN. So this was an important step. Yes. And CNN obviously has continued to be an important generator of cash for the company. It's not generating as much EBITDA as it once did, but it's still significant, and you're going to need every bit of it. to pay down that significant debt load they've taken on. Fascinating. End of one chapter, at least. In one chapter. Beginning of another. And now the hard work starts. Exactly. Let's get a CNBC News update with Pippa Stevens.

34:41Morning, Pippa. Morning, Carl. British police announced the arrest today of the seventh man linked to a suspected terror plot at a U.S.-run military air base in England. Authorities say the 22-year-old British national was detained in London. The U.S. has since moved its bombers from the base, which has been used by the U.S. to strike Iran during this year's war. The other six people who have been arrested have been released on bail. Faculty members at Cornell University are preparing a no-confidence vote against the administration over its handling of an alleged sexual assault on campus. According to multiple reports, members of the Ivy League's school faculty senate introduced the resolution last night.

35:19The move is largely symbolic, but serves as a public rebuke of the university. And the Emmys are moving to streaming. The Television Academy announced today Amazon Prime Video won the distribution rights to the awards ceremony. Deadline reports the six-year deal is worth$20 to$25 million per year. The awards show will stream for free and won't require a subscription. Sarah? Okay, that'll be different. Thank you, Pippa. Up next, one of the nation's leading experts on infectious diseases, on the potential plague threat after this outbreak in a Russian lab. Plus, we'll get to the move in shares of AMD and what CEO Lisa Su is saying about production plans as the Nasdaq touches a record high.

36:01We'll be right back. Welcome back. We're monitoring the latest out of Russia where one lab researcher is dead from a suspected case of the plague with nearly 200 people under medical observation. For more on the potential public health impact, let's bring in Dr. Nahid Badalia, founding director of the Boston University Center on Emerging Infectious Diseases. Doctor, appreciate the help on this one. Obviously, a lot of knee-jerk emotional reactions. But when you think about this story so far, what's important in terms of what we do know at this moment? Yeah, Carl, I think what's confirmed is that there was an unfortunate incident of a death in a lab worker who worked at an anti-plague institute.

36:39Everything else there seems to be a lot of uncertainty about. And what Russia has officially said goes against a lot of the media reports that came out this weekend. So the World Health Organization asked Russia under international health regulations to report on what's actually going on. And this morning, Russia has responded by saying this is not a case of play. They are calling it a pneumonia of unknown ideologies. They don't know the cause. And they're saying that the laboratory results so far in the patients have not revealed any microorganisms that are related to her work, nor have they found any biosafety failures at the lab itself.

37:18So this is concerning because over the weekend, there has been reports of over or nearly 200 people that may have been exposed and that the symptoms in this patient may have been, as you said, mnemonic. Some of the commentary has pivoted around the idea of, well, if this were easy to solve with, say, a prophylactic antibiotic, you wouldn't need to quarantine five hospitals. Is that curious to you? Yeah, this is kind of what sticks out to me. A few things do. An anti-plague lab researcher would know all the biosafety regulations and methodology to protect themselves. And there's a lot of sort of mechanisms in place, including personal protective equipment and ventilation.

38:00And they would be reporting that incident. And if they did, then there would be follow-up and the patient would get post-exposure prophylaxis antibiotics, as you said, which can avoid an infection from developing. So why didn't that happen? And even more curious, Carl, is, you know, this woman ended up in the hospital with symptoms but didn't tell the hospital that she was coming, which would have avoided all the exposures. So there's a lot of curiosity around that. And again, you know, there's a media, conflicting media report saying no other hospitals have not been closed down. Over the weekend, five hospitals appear to have been reported by some local media to have gone under some sort of quarantine.

38:35So it's unclear if that response was out of abundance of caution or if they're responding to something that we don't yet know. In either case, the World Health Organization has reported this to be low risk to the rest of Russia and Europe and the world and moderate to low risk to the region itself. I was going to say, so you sound really skeptical about what do you actually think is going on here and what is your level of concern? Because when we see plague headlines, we think about, like, I don't know, mass deaths in the 1920s. Is it still that level of concern? It's not. I'm so glad you brought that up, Sarah.

39:10So the plague itself, Yersinia pestis bacteria, is actually endemic here, even in the United States. And we actually had a case of pneumonia case last year in a young man in Arizona, which was exposed to it naturally through two sick cats. So we do see it. It is rare. We see a more common form of plague called the bubonic plague, both here as well as in parts of Africa. And it is treatable with antibiotics. And so I think that's where the curiosity for me kind of sticks out. Why wasn't this woman? Why didn't she receive anti sort of a post-exposure prophylaxis? Why didn't she receive treatment, early identification, if this was indeed plague?

39:46To me, the case doesn't end sort of come together for a potential plague case. And that is what Russia is saying, is that they're saying it's not plate. Then it raises the question, well, what is it? And so what I'm looking for are two things. I'm looking for any reports of secondary cases. And Russia has said there have been no secondary cases in any of those who have been close contacts. And the second thing I'm reporting for is transparency around lab results. So what did this woman die of? They say they tested the woman, but they don't see what they tested her for. And they don't give us the results of the actual organism that could potentially cause that.

40:20Yeah, not the easiest part of the world to get good information out of in a hurry. We'll keep our eyes on certainly the news wires and what we can learn in the days to come. Doctor, thank you so much. Dr. Nahiba Dahlia, appreciate it. Up next, Constellation Energy spiking after inking its second deal with a major hyperscaler just in the past week. It stucks up another 13 percent. Plus, President Trump announcing members of his super intelligence force to coordinate on AI policy. one of those members, Undersecretary of Defense for Research and Engineering, Emil Michael, will join us in the next hour.

40:54And Marvell is adding to big gains on the year as the company hosts its Investor Day. We'll get to that move in just a moment. The semiconductor up more than 7%. We'll be right back. AI is driving a massive investment boom, and the opportunity may be spreading beyond the usual suspects. We'll hear from one expert who is watching two AI adjacent stocks that are already soaring this year. He'll tell us why it's not too late to get in on the Tune into our Market Navigator segment today on Power Lunch, 2 p.m. Eastern.

41:46to buy the infusion services provider for$5.8 billion. Option Care Health will remain a separate company led by its own management team. And we're also watching Constellation Energy inking a 20-year deal with Alphabet to provide nuclear power for the data center buildout just a week after signing a deal with Amazon. Pippa Stephens joins us with more on that story. These deals are still happening when it comes to the buildout of AI. Very much still happening, Sarah. And we're seeing Constellation today leading the S &P after signing two power purchase agreements with Google and yet another instance of big tech teaming up with baseload emissions free nuclear to power data centers.

42:23The first is a 20 year agreement for 890 megawatts of new nuclear capacity from Constellation's existing fleet via what the industry calls up rates. That could be something like replacing turbines or steam generators in order to boost output from existing reactors. Essentially, it is the lowest hanging fruit in terms of bringing additional nuclear supply online. The up rates will take place at 11 operating units across Illinois, Pennsylvania and New Jersey. What the company said will be more than four point three billion dollars in new investment. The second deal is a 15 year agreement for Google to purchase about two point seven gigawatts of power from Constellation within the PJM grid.

43:01The company said the agreements offer a direct response to PJM's bring your own power proposal as concerns around AI's power needs grow. Now, Google also agreed to curtail non-critical load during high-stress grid events. Now, no terms were announced, but in the past, we've seen hyperscalers pay above market prices for nuclear power. Plus, this provides revenue visibility for Constellation's fleet. And as Bernstein put it, signed binding agreements are the strongest tier of deals announced and a reflection of power demand strength for the years ahead. Carl? Yeah, really, that's a big one. Big energy deal.

43:35Thank you, Pippa Stevens. David's meantime shares of Marvell now up around 250 percent on the year adding to gains today as the company hosts its investor day. We're going to look at what the options market is signaling about that move as we'll get Matt Murphy on the show tomorrow. Stay with us. Welcome back. Marvell hosting its investor day today. Its stock is also up over 7 percent adding to what have been big gains for the year. Let's get to Oliver Renick at CBO in Chicago. He's got to look at what the options market is signaling. Oliver. Hey, David. As the indexes make new highs, the group are used to seeing lead the way.

44:07Semiconductors is actually a bit behind, so it may not be a huge surprise that options traders see them catching up. NVIDIA has been out front, but today it is Marvell surging 7 % as the company puts up some big targets at that investor day. Options volume is four times the month-long average as Marvell cracks the top 10 most traded today. About$270 million of premiums gone off so far, and$200 million of it was tied to calls. There is some calls selling, balancing out the flows, but on net, the action looks bullish. With the 300 strike call contracts expiring this Friday and next Friday, the current most popular trades by volume and dollar amount.

44:49That 300 strike for this Friday costs about$5.50 and needs a 5 % rally to pay off. It should be noted there's bullish flow across most of the sector this morning. Check out Broadcom. Options volume is three times normal and five times as many calls were bought as puts. 175 million of options traded there with people piling into near the money call strikes expiring tomorrow after a three day rally that's going on right now, guys. Yeah, interesting. Marvell, of course, same. They expect total data center CapEx to reach three trillion dollars. That's by 2030, 35 percent compound annual growth rate from calendar 25 to 30.

45:31And it actually moderates a bit as they get closer to that to that number, because it is growing more quickly now, Oliver. But the numbers are staggering. Numbers are incredible. And I think what's interesting, too, is that when you see those big caps X figures and the market rewarded, David, it looks a little bit different than the response we saw from Micron, which had a great recovery run, but then fizzled a little bit after earnings. So to see that baton getting passed from one semiconductor leader to the next, look at some of these charts like Broadcom, like Marvell, you could see a catch-up game, and I think that's what some of these options traders are trying to play.

46:09Oliver, thanks for that. All opinions expressed by Squawk on the Street participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Such opinions are based upon information Squawk on the Street participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.

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