Bulls Rule in 2025, AI from Apple to Nvidia, Blinder's Fed Outlook for 2026 12/31/25

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David Faber (0:38)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street. Good Wednesday morning. Welcome to Squawk on the Street. I'm David Faber with Sara Eisen. We're live from Post 9 at the New York Stock Exchange. Jim and Carl both have their morning off. Let's give you a look at futures as we get started with trading. A half hour from now, it is the final trading day of 2025 Man, it went by fast, didn't it? We've made it reversed a bit perhaps after those jobless claims, but we are looking for a slightly higher open. Let's get to our roadmap this morning. It does begin with those major averages. Of course, they are on track for another big year of gains as we wrap up 2025 Retail investors set to close out what's been a very strong year as well.

Sara Eisen (1:21)

And tech leading the charge this year will discuss what's ahead for the AI trade in 2026 Also today is Warren Buffett's last day at Berkshire Hathaway as CEO. Closer look at what's next for him, the company and investors.

David Faber (1:34)

Let's start with the markets. We approached, I almost said it already, a half hour from getting started with the last trading session of the year. Major indices are wrapping up another big year. It's double-digit gains. Of course, the NASDAQ, the largest of the big ones, up 21 percent. By the way, we have discussed this a number of times this week already. Foreign markets have also had incredibly strong returns. In fact, many stronger than our own despite that very significant up year for the NASDAQ.

Sara Eisen (2:01)

Yeah, looking at South Korea there and Taiwan. But I just focus on the US for a second. In early April, the mantra was, sell America. I went back and looked at some of the headlines. Bloomberg was really big on this. The real Trump trade is sell America. Turns out that did not work, at least when you look at US stocks, when you look at US bonds. Remember the 10 year yield started January around 480 We're down to where are we? 411, 412 right now. So buying US bonds, buying US stocks, it worked on the dollar. The dollar is set to cap off its weakest year in almost a decade, about eight years on the US dollar. And that could be lower interest rates, a number of cross currents and factors, questions about the Fed, for instance. But, sell America did not work. US stocks roared. We have arguably the best and most innovative companies when it comes to AI at the forefront. And it's interesting to look at who the biggest winners are of the year. It's not just AI. I mean, it is a lot of AI adjacent, Western Digital, for instance, number one, Micron, Seagate, top three.

But also some of the newcomers to the S&P 500, like a Robinhood did very well. Warner Brothers, of course, at the center of the deal and the bidding war. Newmont on the gold price. So a number of themes in the market. Wrap it all up.

David Faber (3:23)

Yeah.

Sara Eisen (3:24)

The US had a good year.

David Faber (3:25)

No, it did. Without a doubt, it had a good year. Now, as I said, of course, any number of other markets had also good years. So if you had taken that advice and gone into some of the other markets, you wouldn't necessarily be worse off. But to your point, if you had been smart enough to buy at the lows, of course, following April 2nd and Liberation Day, well, then you're up a lot more than just the 21% in the NASDAQ or the 17-plus percent gain we see so far heading into today on the S&P.

Sara Eisen (3:50)

And part of it is, you know, he walked back some of the worst of the reciprocal tariffs, sure. But the other part is the economy defied the doomsayers. Remember, all of the Goldman Sachs and everybody raised their recession odds from like 20% to 40% or 60%. And we were going to see massive inflation. And guess what? The economy proved very resilient. And I think, highlighted by the jobless claims number that we just got, yes, it's seasonal. Yes, you know, it's not necessarily consistent. But what has been consistent is that there's not a lot of stress in terms of firing in this jobs market. We just got a number showing that last week, less than 200,000 Americans filed for unemployment claims. That's one of the lowest numbers of the year. If you really were talking about a labor market that was under a lot of pressure, then you wouldn't see numbers like that. Companies would be laying off more workers. The big question mark, I think, that's really puzzling economist is we're seeing a rising unemployment rate at the same time where we're not. So it's the low hirings, low firings kind of economic environment. And that's just that's continuing here into the New Year.