9AM Hour: Tech After the Sell-Off, OpenAI-Broadcom AI Chip Unveil, WTI Crude Falls Below $70 6/24/26

SPEAKER_1 (0:00)

It's smart to always have a few financial goals. And a really smart one you can set, earning cash back on what you buy every day. And with Discover, you can. Get this, Discover automatically matches all the cash back you've earned at the end of your first year.

Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show.

See terms at discover.com/creditcard.

SPEAKER_2 (0:25)

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com/marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts.

David Faber (0:54)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (1:05)

Good Wednesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Leslie Picker here at Post 9 of the New York Stock Exchange. Cramer has the morning off. Bulls looking for some stabilization as the Cosby recovers some 3% of that 10% spill. Chips definitely in focus with Cerebris on the tape and Micron tonight.

Brent dropping to 75 for the first time since the war began, but gas prices taking their sweet time relative to crude, something that has the president's attention and maybe now the DOJ's. Our road map begins with this turnaround for tech. Micron, the best stock on the NDX ahead of their earnings tonight.

David Faber (1:39)

Plus shares of FedEx are down. Despite a top and bottom line beef, we've guidance perhaps is the reason dragging down the company's results.

Leslie Picker (1:47)

And SpaceX trying to stay above its opening price of $150 a share as Cerebris post its first earnings report since going public.

Carl Quintanilla (1:56)

Let's begin with the markets. The tech sector tries to rebound from yesterday's sell-off. Still a lot of discussion, guys, about whether that tumble that we saw in Asia was technical in nature. Some of that unwind, although still a lot of discussion about single stock, leveraged ETFs. And the Q's have had 3% moves, I think, three times out of the last 12 sessions, some things you haven't seen in years.

Leslie Picker (2:18)

Yeah, the levered ETFs are kind of an interesting phenomenon in this market. Obviously, they've exacerbated. And what they do is they can limit liquidity. And especially when these levered ETFs rebalance toward the close, they can create outsized moves to the upside and the downside. Now, not every stock has one, of course, but the stocks that we've seen having outsized volatility tend to be correlated with those that have some of these levered ETFs.

You know, whether there's anything that can be done about it, I think, remains to be seen. You know, the fact that there were 11 of these that were launched right after a company went public with a 4% float already limited liquidity, and then you've got this slew of levered ETFs that can exacerbate things. You've got SK Hynex looking to do a secondary listing, a dual listing here in the US, that has some levered ETFs tied to it. And then, of course, if these are fast tracked into broader indexes, it's something that you need to pay attention to because it matters. It impacts, at least over the long run, when they start to get bigger weightings into, say, the NASDAQ 100 over time.

David Faber (3:22)

Yeah. I mean, I think today a lot of asset allocators were going to say, all right, well, are we just going to have the same rebound that we've seen in the past?

Leslie Picker (3:30)

Yep.

David Faber (3:31)

After days such as yesterday, and at least the futures would indicate to a certain extent that will be the case. Of course, we did see some damage yesterday to names such as AMD and Intel, certainly number of the chip names. We're going to keep an eye on Micron after the close today with its earnings as well. Although, to be fair, many of these stocks only having come back to levels they had last week.

So, we're not talking about, in any way, significant sell-offs. The question, of course, will it or would it continue yet to obviously be answered? We'll see how we perform during the course of the day, although a bit of a rebound is in store.

Leslie Picker (4:05)

Yeah. I mean, it just feels like the volatility is really at scale. It seems like only yesterday we were talking about meme stock volatility. Those were largely in pretty small companies. Semiconductor stock share of the S&P 500 is at a record 19 percent, two times the level from 2000 So, you're seeing the moves really impact the broader indexes, I think, in a way that maybe in previous eras where we saw this outsize volatility on a daily basis was more in the smaller cap space. Now, these are giant companies and they have big moves and, of course, a lot of it tied to market structure, concentration, leverage.