Progress in the Middle East & Roadblocks in DC 10/9/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Shutdown, day nine, and no end in sight to reopen the U.S. government. Two key players back to back. Senate Majority Leader Republican John Thune. They are pandering to the left-wing special interest groups out there who have demanded this and demanded this showdown with the President of the United States. And House Minority Leader Democrat Hakeem Jeffries. The law requires everyone to be paid. And unfortunately, Donald Trump has once again suggested that no one is going to get paid. Phase one of a Gaza peace plan agreed to by Israel and Hamas.

0:44Are Eamon Javers with the details? There's cautious optimism in Washington today and the emphasis may be on cautious. And the Council on Foreign Relations' Michael Froman on the next steps. I think the next stages are harder because effectively President Trump is asking Hamas to stop being Hamas. All that and the rest of today's news. It said right there we know you like Fritos. Oh my God. It is Thursday, October 9th, 2025. Squawk Pod begins right now. Stand back to bye in three, two, one. Cue it please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square.

1:28I'm Becky Quick, along with Joe Karnan and Andrew Ross Sorkin. We're just dealing with people from the Middle East, our people and other people on the potential peace deal for the Middle East. Peace for the Middle East. It's a beautiful phrase and we hope it's going to come true, but it's very close. President Trump is saying Israel and Hamas have agreed to an initial phase of a plan to end the war in Gaza. Eamon Javers is in Washington this morning and he has the details. Where are we, Eamon? Yeah, good morning, Andrew. It was a bit of a dramatic moment at the White House yesterday as President Trump was engaged in an unrelated roundtable and suddenly Secretary of State Marco Rubio walked into the room.

2:05Come on up here, Marco. Anything we should know about the Middle East? The president looked over at Rubio. Rubio handed him a note and then went over and whispered in his ear. Yeah, I was just given a note by the Secretary of State saying that we're very close to a deal in the Middle East. Apparently what Rubio told the president was they were very, very close to a peace deal and they needed the president to approve a Truth Social post in order to be the first one to announce the deal. That came a couple of hours later in the evening last night. Here's what the president put up on Truth Social, if we can call that up.

2:40He said, I'm very proud to announce that Israel and Hamas have both signed off on the first phase of our peace plan. This means that all of the hostages will be released very soon, and Israel will withdraw all their troops to an agreed-upon line as the first steps toward a strong, durable, and everlasting peace. All parties will be treated fairly. This is a great day for the Arab and Muslim world, Israel, all surrounding nations, and the United States of America. and we thank the mediators from Qatar, Egypt, and Turkey who worked with us to make this historic and unprecedented event happen. Blessed are the peacemakers.

3:18So that's the president talking about this first phase and hostages being released very soon. What does that mean? Well, a White House official tells NBC News that there are certain expectations here. One is that the deal has to go to the cabinet of Israel today, Thursday, for a vote. If they vote yes, then Israel will withdraw to an agreed-upon area within 24 hours after that vote takes place. Then Hamas has 72 hours to release hostages, and the White House now expects those hostages to begin to be released on Monday. So that's where we stand in terms of the logistics of what this first phase might mean.

3:58Then the big question, guys, coming up is whether we see travel from President Trump. He hinted yesterday that he'll be making the rounds of the region, Not sure exactly what that means. Seems to indicate multiple stops in the region, possibly Egypt, where negotiations have been taking place. But the president clearly viewing this as a big foreign policy win, and he's going to want to go over and put his stamp on it and participate in some of the events surrounding the end of this war, if that's what we end up seeing here, depending on these votes and how things go. Folks I'm talking to overnight say one of the big things to be wary of here is domestic Israeli political opinion about this?

4:38You know, how does this play in Israel domestically? So there are still some stumbling blocks potentially out there. But for now, this looks like we could be on path to see the hostages released by Monday, guys. Back over to you. I was going to ask you, what do you think the opinion is right now in Israel? What is the prospect that this happens in real time, the way it's being described? And if we talk about this a week to a month from now, are we really there? It's a good question. You know how many false starts there have been on Middle East peace, right? I mean, people have been trying to do this for decades and generations.

5:11It is a very tricky, intractable problem. I mean, I think one of the questions is just militarily, the reality on the ground for Hamas. You know, how badly devastated have they been? Maybe at the point now where they simply don't have the leadership, command and control, military resources to continue to engage in fighting. and they are willing to stand down for some period of time and maybe regroup for some future effort and sort of take a pause here. And a pause is a win in the Middle East if you look at the history there. So maybe that's it. And then the question is Israeli public opinion. Netanyahu apparently told President Trump, who said this in an interview last night, that he is extraordinarily popular now as a result of this deal.

5:58So maybe the Netanyahu administration feels that this is a win for them as well. And they've got their finger on the pulse of public opinion there, certainly better than I do. But, you know, we'll see. I think, you know, there's cautious optimism in Washington today. And, you know, the emphasis may be on cautious. Eamon, it would be historic and a remarkable thing for the world, remarkable thing for this administration. And thank you this morning. Appreciate it. You bet. Third quarter results just hitting from PepsiCo. Earnings there coming in at$2.29 a share. That was three cents ahead of estimates.

6:35Revenue coming in at$23.9 billion, also topping expectations. The company says that it now expects adjusted earnings to decline by about half a percent for the full year. That's an improvement from the prior guidance and better than Wall Street had anticipated. Pepsi also naming Steve Schmidt as the EVP and CFO. That's effective November 10th. Outgoing CFO Jamie Caulfield is going to be retiring next year after 30 years with the company. You can see that stock right now off by about 63 cents. But, guys, what they're doing in this, in the release that they're putting out with this, is kind of pointing out that they're going to be aggressively targeting, trying to improve things at the food business, at the food division.

7:17Organic revenue growth, too, right? Yeah, organic revenue growth as well. But one of the things they're really talking about is they say they expect the business to remain resilient, but they are going to be very closely looking at this aggressively prioritizing faster organic revenue growth and improving their core, improving the food department's performance is a top priority. They say they're laser focused on improving their marketplace competitiveness, accelerating business momentum, and improving their profitability in the coming months and quarters. Also say basically they're going to be listening to just about anybody and everybody, that they take all of their shareholder views into account, which makes it sound like they are either thinking they're going to be getting an activist investor that comes in or trying to ward off activist investors saying we see the problems here.

8:04They don't just listen to those people. I think they listen to customers. About what they like? Do they watch the show? Did you get your... What did you get? I didn't break into it. It said right there, we know you like Fritos. Oh, my God. I mean, they're not bribing me, although it is, like, the finest company, and the stock is so cheap here. But, no, I'm kidding. They're not bribing me, but, yeah, I got chili cheese. I got... Right up your alley. And it said... Chili cheese Fritos? Yeah, we know you like, we know you like fries. You know, did you get your bag? They sent you all kale chips, right?

8:41Because they know, you know, sort of the kale or the, I don't know, what are the cauliflower things? Did you get your bag? I don't know. I arrived home late last night. I'm not sure. Can you call one of the door people or handlers or whatever? Staff. One of your staffs. Staff is what you're referring to. Can I call one of the staff? Can you call one of your staff? You got one, right? Did you look? I didn't look. How can you? I wasn't even home, and I found out what was in. I don't know. Look, the language around this is a little different than what we've heard in the past. PepsiCo Foods North American continues to work towards improving its performance trajectory with a high sense of urgency.

9:20They do say the business made good progress on advancing permissible snack offerings, deploying more efficient trade promotional programs, and aggressively reducing costs. elevated promotional activity at the Frito-Lay and strong performance within Quaker foods. They go on and on about this, but there's a lot of talk here. What they did say is doing well, things like pork rinds, sun chips, unflavored tortilla chips. They are gaining market share in those areas. But, guys, you could probably tie this to some of the broader trends we've seen with people wanting to make sure that they're very conscious about the carbs they're putting into their body, be very conscious about the snacks that they're eating in these weddings.

9:55Are they, though? I think we've come back to anything in moderation. We. Yeah, exactly. Anything in moderation. The question is, who's got the right business model, Coke or Pepsi? Yeah, good question. Because I thought it was Pepsi, but then for a while we thought it wasn't Pepsi. Right. Yeah. Because we understand this is - Actually, check this out. Shares are up 1.5%. They were down initially when we first recorded this, and now you can see the shares are up 1.5%, so maybe the street likes seeing that they are going to be taking a piece of taxes. You had Jensen Wong on. Yes, yesterday. It was awesome.

10:26Sorry we missed that, but it was great. And he talks about synergy. He wants to be involved with anything Elon Musk is doing. I think that's really interesting. XAI, I'm super excited about the financing opportunity that they're doing. The only regret I have about XAI, we're an investor already. The only regret I have is I didn't give him more money. Almost everything that Elon's part of, you really want to be part of as well. And he gave us the opportunity to invest in XAI. I'm just delighted by that. And so that's an investment into a really great future company. And I'm really excited about that.

11:03That's not vendor financing per se. So he sees how his chips and Elon stuff, all that. Other types of chips that go together. No, for me, I see salty food with soft rice. You have always been a fan of these. I understand that. Yeah. Remember when Smuckers bought, they had peanut butter and jelly. Okay. And then they made those little things. So I understand those. What else did you find from Denson yesterday? Is it, I didn't watch the whole interview. I saw some snippets. Yeah. Look, I think the big takeaways that came out of that, first of all, he was caught off guard by the AMD deal. He was.

11:40With OpenAI. He didn't know about that. Blindsided. He didn't say blindsided, but he did. Unhappy about it? Just said he thought it was interesting. It was very different than their deal took a bit of a swipe at the idea that they have to give away 10 % of their company to have this happen. Because it was a completely circular deal. But the difference with his deal is that he's getting a stake in OpenAI, where the pay to play on the other side is you got to give away 10 % of your company to do it. And he took a bit of a swipe at that, said we brought him off guard. But I think what you see are the deals that everybody is hooking up with at this point.

12:14He said if he could have bought more of OpenAI earlier, he wished he had. He said the same thing about CoreWeave, said that he wished that he had a bigger stake in XAI. So all of those things saying, yeah, I wish I had more money to do with it. They've got about$240 billion in cash that they're going to kick off. And the question becomes, what do they do with that? You know, the capital expenditure plan that you put back, you can either invest in the company, you can acquire other companies, you can buy stakes in other companies, or you can give it back to the shareholders. And I think what he's trying to do, he said, is any and all of those things above and also throw in the idea that maybe being part of the electricity solution would be too, because that's the limiting factor that they see in OpenAI at this point.

12:51Did he ask about? He doesn't think that it's circular. Did he ask about? Yeah, I think he missed you guys. He didn't specifically say? Hopefully he comes back soon when everybody's here. I mean, I saw it. I was like, oh, my God. We were not allowed to promote it earlier, so it was. Yeah, I wondered. Yeah. Because it kind of, it's like, whoa. Yeah, we weren't allowed to promote it so much. It's about 20 minutes, too, wasn't it? It was 35 minutes. It was? Yeah. I would give him as long as that. Maybe next time. Well, they said half an hour, and I did not want to be disrespectful of the time constraints on that, because we'd like him to come back.

13:27If we base it on market cap and importance of the company, we would let him go the whole show. Straight through Squawk on the street. Straight through Squawk and right through halftime report. We could have given him the entire day off. If you missed our conversation with NVIDIA CEO Jensen Huang, he was right on set. Check out yesterday's podcast for the full interview, the whole thing. It's in your feed just before today's episode. And next on Squawk Pod, both sides of the stalemate in Washington. First, Senate Majority Leader John Thune on where the Republicans are willing to give. I think there perhaps is a pathway forward on that, but it doesn't happen while they are holding the federal government hostage in this shutdown.

14:10Then House Minority Leader Hakeem Jeffries on Democrats standing firm. We are simply not going to go along to get along the Republican effort to continue to gut the health care of the American people. This is a cost of living issue and it's a life or death issue for millions of Americans.

14:36This is Squawk Pod. Stand Andrew by in 3, 2, 1, up in Andrew. Q, this is Mike. You're watching Squawk Box right here on CNBC. I'm Andrew Ross-Dorkin, along with Joe Kernan and Becky Quick. A lot of things going on on this Thursday morning to tell you about him. We are now more than a week into the government shutdown, and the Senate has once again failed to pass a continuing resolution. Of course, you need 60 votes, so you need some help. Senate Majority Leader John Thune joins us now. Senator, Leader, it's always good to have you on. Peace might be breaking out. Nice to see you, Joe. Peace might be breaking out in the Middle East.

15:17But what I saw yesterday with some of the players on the floor, things seem like they're even getting worse between Republicans and Democrats on this shutdown situation. Well, I think what's happening, Joe, is, you know, right now it's all about politics. And as Chuck Schumer pointed out in his interview yesterday, this is a big game for the Democrats. He actually said yesterday, every day, this is getting better for us. I mean, do you think it's getting better for the troops that aren't going to get paid, the air traffic controllers that aren't going to get paid, for the border patrol agents that aren't going to get paid?

15:53This isn't a game. This is real. This is people's lives we're talking about. This is the families of the American people, and it's important to get the government open again. We give the Democrats an opportunity pretty much on a daily basis to actually vote to do that. And we have 55 senators, a majority, 55 out of 100 senators, who are voting to open the government. We need five more Democrats because, as you just pointed out, it takes 60 to do anything in the Senate. Senator Fetterman, I guess rumor has it that he was in talking to you. How does this progress? Do you see getting to 60? Did he tell you he's talking to some of his colleagues, Democratic colleagues, about breaking away and maybe doing it?

16:40Or did he tell you exactly what type of commitments Republicans would need to make in terms of the subsidies, the Obamacare subsidies? Is there something sort of coming together you can tell us about? Well, I talked to a number of Democrats on a regular basis, including Senator Fetterman. and Senator Federman has done what I think is the courageous thing and the right thing for the country and that is voted to consistently to open the government back up. But I'm hoping there is a, there are a number of Democrats there, Joe. There are conversations going on all the time. But if this is going to get solved, it's probably going to get solved organically by rank and file Democrats because their leadership has no interest in a solution.

17:22When Chuck Schumer is saying this is getting better for us every day, that's not somebody who wants to see this get resolved. And they are pandering to the left-wing special interest groups out there who have demanded this and demanded this showdown with the president of the United States. And so we've got a bill, as I've said, that's passed the House, that's sitting at the desk in the Senate that we could pass today, put it on the president's desk. He would sign it into law. And this shutdown whole fiasco ends and people can get back to work and we can start paying the federal employees who are starting to miss paychecks.

17:53Every shutdown is different. There should never be a shutdown. I agree with you on that. and Democrats know that, and they get high and mighty when Republicans say they're going to do it, but then they're engaging in exactly what they supposedly are against. But this one's different. It does involve some issues that strike deep to people, especially some low-income people that would see subsidies not cover what it used to cover for their health care. They could be left with very big increases. At the same time, people, you know, Democrats remove the cap on individuals that make up to a half a million dollars a year on some of these pandemic era subsidies.

18:37So, I mean, it's it's broken. Something's wrong. I guess your argument would be this is not the time to fix it. Open the government and then we'll fix it. Right. That's it. That's a year end deadline. And by the way, that doesn't impact the low income people you're talking about. These are enhanced subsidies. These are the covid era subsidies. This is a COVID tax credit cliff created by the Democrats. They put the expiration date in place, knowing full well that there would be a ton of pressure to try and extend it. But the truth is what they're asking for here, Joe, is one point five trillion dollars in new spending for free health care benefits to be extended to noncitizens.

19:17Those are all conditions of the the counter proposal that they put out there, which can't get anywhere close to that. That gets 47 votes in the Senate, doesn't get a majority in the House, and wouldn't be signed into law by the President. So the simple reality we have in front of us today is we have a bill at the desk that can open up the government. We can have the conversation about the premium tax credits and the issues that they are raising. And I've said multiple times, we're more than happy to do that. I think there perhaps is a pathway forward on that. But it doesn't happen while they are holding the federal government hostage in this shutdown.

19:52I guess maybe I didn't mean low income, but there are some average people, not wealthy people, that would see some big increases, I think. And that's what has Republicans. What would happen, Joe, is it would, if we didn't do anything, it would drop down to where it was before they put these COVID era policies into effect, which would be 4%, 4 ,400 % of the poverty level. So you're talking about 130 grand a year. Right now, with no income cap, there are people who are making half a million, 600 grand a year who are getting subsidies from the federal government for these policies. So, you know, I mean, obviously there is perhaps a solution there that we can work with, but we've got to have some reforms.

20:35You can't just open up the cap on this. You can't have lots of people who pay nothing, absolutely nothing, at least some co-pay, some deductible, something that they pay, because there are literally millions of people on these policies today who don't even know they're covered because insurance companies are incentivized to auto enroll them because they're getting direct payments from the federal government to do it. Well, the reason that so many of these premiums are going up with Obamacare isn't just because of the expiration of the subsidies, and that's part of the problem. The overall ACA needs to be looked at, And at this point, it seems like the president is starting.

21:15Is he starting to put some pressure to get something done? And I don't I won't say fold, but to concede to the Democrats, you know, that the way the system is right now, you do need to probably increase subsidies at some point because it's just not working. I mean, health care, Obamacare premiums don't pay for the kind of health care you're getting right now. It has to be subsidized. And partly because Obamacare at its core is inflationary. It's been driving up costs. I mean, the fundamental problem here is the underlying program, which, again, needs to be reformed. And the president wants to do that.

21:51The president would like to overhaul Obamacare and give people health insurance that is higher quality and more affordable. But you've got Obamacare now embedded for the last 15 years. The Democrats, again, enhanced these subsidies a few years ago. so there's no income cap on it. And so yeah, frankly, I think that's a these are all conversations that are right to be had and I think the president is more than open to sitting down and working on solutions that would improve quality and affordability for people in this country when it comes to health care. But part of the problem you have is the Obamacare program in the first place and everything that goes with it has an inflationary impact on health care costs.

22:30So health care costs have been going up. They're going to go up irrespective of what happens on these enhanced subsidies. They were going up anyway. But frankly, I think that's a problem that needs to be addressed, needs to be looked at. And we're willing to do that. But you can't do it while you're holding the federal government hostage. The$1.5 trillion reminds me of the original Green New Deal. They would settle for much less. To just extend the subsidies, it's like, isn't it? It's about$450 billion over 10 years, isn't it? And I guess there was some kind of compromise on that. Are the Democrats open to at least having some type of restrictions on exactly who, changing the pandemic era subsidies so that it comes down to under?

23:22Because Republicans aren't going to agree to$450 billion added into a CR. That's not the way it works, does it? Yeah, to keep the government open for seven weeks, right. Yeah, no. Well, and I think there are reasonable Democrats out there who are open to some of the reforms that have been suggested. I mean, the question you have to ask yourself is, should the American taxpayer be subsidizing people who are making half a million dollars a year when it comes to their insurance? And so, I mean, I think this thing, and the very fact that it costs$400 billion to extend it, you know, suggests that this thing ought to be ripe for reform.

23:57And I think there are some Democrats out there who would be willing to do that. I mean, we keep getting, you know, there's, like I said, there are conversations going on. The challenge they have is their leadership is so beholden right now to these left, far-left special interest groups who basically are calling the shots. And, you know, we keep hearing about this no-king's protest that's going to happen in Washington, D.C. on October 18th and why the Democrats can't open up the government before that because they'll curry anger from all these left-wing groups. I mean, I think that's what's driving this at the leadership level, but I'm hoping that rank-and-file Democrats will come to their senses.

24:35We need five more is all. We've got a majority. We have 55 United States senators out of 100 who are voting to open up the government. The House has already done that. The president's willing to sign it. The only thing standing between the government being opened up again and us having a conversation about this is five Democrats coming forward and doing the right thing for the country. So you think, in your view, Leader Schumer is not going to come in and say, OK, I see the light. We're going to go ahead and do this. You think he's going to stick with this is a great issue for us. And Trump shut down the government because he wants to cut everyone's health care.

25:12He'll stick to that and five will you'll be able to get five. And he can maintain his position and you'll get five Democrats eventually that say, OK, okay, we'll do it. Is that how it's going to end, in your view? I think that's probably, I certainly hope that's how it ends. I don't think it's going to end with Chuck Schumer or the Democrat leadership, because, as I said, he told the press yesterday that every day this is getting better for us. This is a political game for these guys. And I understand they've got these outside groups and this left-wing constituency that is clamoring to fight with President Trump, but this isn't about the game.