11AM Hour: The Tech Tumble, A New Quantum EO, & Meta Wearables Chief Talks AI 6/23/26

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Sara Eisen (0:50)

Good Tuesday morning again. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla live from Post 9 of the New York Stock Exchange. Today, the volatile tech trade, chip stocks and memory names among the biggest losers driving this global tech sell-off. But Wall Street looking to claw back from the losses here.

Carl Quintanilla (1:05)

As you can see, Quantum name is getting a boost today. The president backs the technology and seeks to fast-track some development. Sandbox AQ's Jack Hittery is going to be with us, find out why he says the move marks a new era in America's cyber defense posture.

Sara Eisen (1:19)

Meta doubling down on wearables, debuting newer and cheaper meta design smart glasses. Let's discuss how this move positions Meta in the ongoing AI race with the company's VP of Wearables. First up, though, in the markets, we are seeing a little bit of a comeback. The Dow has actually gone positive. The Nasdaq is still down 1.5% as tech weighs on the overall market. But beyond the defensive groups, which opened higher, like Staples Real Estate and Utilities, you have strength now in financials and in energy. You're still seeing pressure on Micron following the move overnight in South Korea's KOSPI index, which took down SK Hynix and Samsung. Micron is down 10% into earnings tomorrow. Nvidia is down too. But some of the hyperscalers are actually a little bit higher, like a Microsoft, Amazon, and Meta, and Apple. They've been weaker in recent days.

Carl Quintanilla (2:07)

Tech, of course, dragging down the NAS and S&P today. A bit of a rebound off the lows. Michael Santoli is here with his take as we watch some levels as we opened around 73.50, as we said earlier.

Michael Santoli (2:17)

We did. As a matter of fact, it was almost a scripted bounce off the 50-day moving average for the S&P. So that's what I guess some dip buyers got courtesy of this backsliding in the memory trade. The conditioning of this market is so strong as we were talking earlier, just about trading one thing against another, rotating away from the stuff that's under selling pressure and finding some laggards, at least on a short-term basis. That's what's going on. New York Stock Exchange breath actually turned positive after a very weak opening. So the big question has been, if this leadership sector, high momentum, high beta stocks that are mostly around semis, if they do have a more sustained gut check, can the overall market more or less absorb that pressure and find another way for the outlets? So far, it's worked.

So this dispersion trade, the lack of correlation among sectors has been fine. One of the reasons I think it's been fine is the underlying macro has held up okay. We got better PMIs today. Economic Surprise Index has been running at a two-year high. So all that is to the good. We're not really worried that much about the overall earnings picture or about US GDP growth or financial stress that much. It's much more about has the market frontloaded a lot of the gains that we can expect from this earnings bonanza that everybody is now penciling in.

Sara Eisen (3:33)

Yeah, I guess the rate story is out there as well. So is the strong dollar. Both of those things are kind of minor headwinds now.

Michael Santoli (3:40)

They're getting your attention. I think the dollar in particular, we've had this repricing in a hawkish direction, although today yields backing off a little bit. And I think that maybe lessens a little bit of the concern that we're going to be into the danger zone. I did point out real yields is where the action has been because market-implied inflation expectations have been coming down with this hawkish turn. In theory, on paper, based on history, higher real yields should restrain equity valuations or maybe cause a little bit of a kind of pressure on how much people are willing to pay up for future earnings. But it's a pretty loose association. So I don't know that it's sort of a catalyst, but it's something to keep in mind.