10AM Hour: What’s Behind the Chip Rebound, SpaceX’s Gravitational Market Pull 6/8/26

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Sara Eisen (1:01)

Good Monday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. Live as always from Post 9 of the New York Stock Exchange. Stocks are rebounding this morning after Friday's big sell-off. With chips getting an early boost, we'll talk about the names leading the comeback here, and whether the worst is behind us. Plus the SpaceX IPO just a few days away, but the company likely already having a noticeable impact on the entire market, including factoring into Friday's tech wreck. We'll explain how.

A second case of screw worm has been identified in Texas, leading Canada to restrict some livestock imports from the US. We'll talk to the CEO of Zoetis, which makes a drug to treat and prevent the parasite. Thank goodness. But guys, let's start with the changing market thinking around what's going to happen with the Fed. We got that really strong jobs report on Friday, and already the trend had been in place, that cuts were being pushed out farther and farther away, and it was looking less likely, and that hikes are getting more priced in. So here's where we sit this morning. This is what has changed. There is a more than 65 percent odds now that the Fed will hike rates in December. Actually, on Friday, Fed funds futures at one point showed a more than 90 percent probability that the Federal Reserve would be hiking interest rates. Also, I thought it was notable that Goldman Sachs came out over the weekend and got rid of their rate cut forecast. Here is the quote from the note that people are buzzing about today. We are pushing the final two rate cuts in our Fed forecast back to June and December of 2027

Labor market has been stronger. We now expect unemployment rate to rise only a touch further to 4.4, not enough to create a sense of urgency to lower rates. As a result, we think the most natural path for the Fed is to delay further cuts until the effects of the tariff, the war in AI demand have faded and core PCE inflation nears 2 percent. Someone that does not agree with this market pricing and still wants rate cuts is President Trump. He talked about it in an interview this weekend with NBC. Listen.

Oh, never mind. We don't have it. But he basically said that we built a country by doing great and having rates low. What they do when they raise interest rates is they try and kill success. He doesn't want rate cuts. No surprise. He's been saying that, but also said he doesn't want to mess with the incoming new Fed chair, Kevin Warsh, who has his first meeting next week, which will be very interesting. We haven't heard from him in a while.

Carl Quintanilla (3:25)

We did have Jan on on set on Friday. We tried to say, is this jobs number going to get you to push back your cut forecast? He wasn't quite ready to publish, but they actually did later in the day. He's still cautious on the consumer. I mean, we expect consumer spending to slow to below potential 1.3, a 1.3 pace this year because of what energy prices have done and the inability of wages to keep up.

Sara Eisen (3:48)

Speaking of caution on the consumer, I don't know if you guys saw it, Friday afternoon, there was new consumer credit numbers out, which basically shows how much Americans are borrowing and using their credit cards. David Rosenberg highlighted this in his report.

There is a revolving owned and securitized consumer credit, meaning Americans are relying more on credit. The March-April surge was up $43 billion, Rosenberg said, something we haven't seen since late 2022 Credit card balances on the month went up 11 percent after a blowout 10 percent in March. So it's no wonder that the savings rate has come down. And if you look at what's driving all this, I mean, the real income growth is negative, right? Even in the blowout jobs report that we got on Friday, which was really, really good, wage growth was not so strong.