10AM Hour: Chip Rally Lifts Markets to New Highs, Applied Digital CEO, Boeing CEO on Expanding 737 Max Production 5/27/26

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Sara Eisen (1:04)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live as always from Post 9 of the New York Stock Exchange. Ahead this hour, a number of chip stocks ripping higher again this morning. After Micron joined the Trillion Dollar Club and propelled the NASDAQ to a record high, we're gonna take a look at how much more room is left in the rally. And speaking of rallies, the CEO of Applied Digital with us, after a 500% gain over the past year for his company's stock, we'll talk about some of the news they just made around data centers, and we'll get to some of the big moves here in retail this morning on the back of earnings, including Dix and Bath and Body Works. You'll hear from executives at both of them and resolution to the drama at Lululemon. First up though, trying to sort of tally what's going on with the consumer out there as a result of the higher oil prices and the higher yields. We did get a clue on how those higher mortgage rates are impacting folks going out there to buy homes. Mortgage demand falling 8.5% from the prior week. That's the mortgage app volume. There's the 30-year mortgage rate, which is obviously elevated. The mortgage refinancing demand falling 18%.

This is no surprise. We've seen these higher mortgage rates. There's going to be an impact, consumers responding to them.

That's the bad news. The good news is there's still a lot of optimism around there, whether it's the self-perpetuating story around higher stock market, or just the fact that unemployment still remains low, and folks have jobs and wages are rising. We got this consumer confidence number, which was better yesterday. But what I wanted to pull out was the optimism on stock prices.

The percentage of folks that expect stock prices will increase. This is after already high levels. You can see those numbers are pretty elevated there. That, I think, reflects a lot of the optimism that we talk about every single day in the market, and the fact that despite concerns about higher rates and higher oil prices, markets hung in there and overall economies hung in there. There's this sort of self-perpetuating story there. Now, that might affect only the upper income or the folks that own assets and own stocks, but it's still a good story at least. Yeah.

Carl Quintanilla (3:15)

I mean, it's a continuation of the theme that if you own assets, you feel good. If you don't own assets, you might not. This journal piece yesterday about the toughest summer job market in decades. Did you see that? Because so many summer jobs are offered by small businesses that are right now beholden to gas prices and higher rates.

Sara Eisen (3:35)

Yeah. I mean, I guess a different story on big business and small business there right now, and entry-level positions too. We know have been under pressure and that's been a harder spot to fill for folks as the technology adoption grows. But just looking at some of these other consumer tells that some of the economists look at real-time data, how about the open table reservations?

They track the seeded diners by week and that has also been pretty strong. We're still looking at numbers. Yesterday's basically was 17 percent higher than where we were last year at this time, but we've been seeing double-digit growths every day in these seeded diners compared to last year, which reflects, I think, the resilience that we hear about. And you'll hear more from Dick's and Bath & Body Works later, but Abercrombie just wanted to highlight this mention. As far as the consumer sentiment goes, I can speak for our business, right? They keep showing up. We're not seeing any change in performance across cohorts. So I think the big surprise, David, has been the resilience of the consumer amid the higher gas prices and lower consumer confidence.