Dow 50k, Big Tech's AI Spending Spree, & What's Next For Bitcoin 2/9/26

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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 or find Schwab Market Update wherever you get your podcasts.

David Faber (0:57)

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

Carl Quintanilla (1:09)

Good Monday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Mike Santoli, David Faber here at Post 9 of the New York Stock Exchange. Cramer has the morning off. Futures down small as we come off Dow 50K on Friday. Big week of earnings with Ford, Coke, Cisco, McDonald's, and economic data with the jobs number Wednesday, CPI Friday, 10 years 422 Our roadmap begins with the state of stocks, with the Dow hitting 50K for the first time, but tech coming off its fourth straight week of losses.

David Faber (1:38)

AI was one of the big themes in the last night's Super Bowl ads, as Anthropic takes aim at open AI. Meanwhile, NVIDIA's Jensen Wong says the massive amounts of capex spending by big tech is sustainable. And we've got some wild swings in crypto. This is Bitcoin rebounds back above 70,000. Looks like Strategy may have acquired more Bitcoin. We'll give you that as well.

Carl Quintanilla (2:01)

Let's begin with the markets of the Dow surging 1200 points on Friday to a new record closing above 50k for the first time ever. Stocks helping fuel that run. You probably are familiar with a few. Caterpillar, Walmart, Goldman, all doubling in that time. NVIDIA not far behind after joining the index in November of 24 IBM rounds out the top five. Mike, you've done some math on the names that have driven the Dow year to date at least.

Michael Santoli (2:24)

Yeah, those are the actual percentage gains in the stocks as opposed to how many net points are contributed to the Dow. Of course, it's a price-weighted index. It was done in a way that you could figure out on pencil and paper in 1896 That's why it's done that way. But I do think it also reflects the mood of the market right now, which is Dow outperforming S&P, which is outperforming the NASDAQ. So it shows you the Dow is a net beneficiary of this move toward old economy, companies that have some kind of a claim on scarce physical assets as opposed to digital businesses. But inside the Dow, in this particular move, Caterpillar, year to date has contributed like 985 points to the 2,000 points the Dow is up. That is also because it's a very high-priced stock. It's over 700 bucks. Goldman's the only one higher priced at 900 CRM, so Salesforce and Microsoft together have net deducted 1,000 points from the Dow. So it's a crude index as we know. However, over time, it does move in sync with what you would expect from that industry mix that's inside the Dow.

Of course, it is a catch-up move. Almost over any longer time period, it has underperformed the S&P 500 and the NASDAQ. It outperforms in bear markets and defensive tapes, typically as opposed to when things are pretty exuberant.

Carl Quintanilla (3:43)

Then we were chatting before the show this morning on the Russell, which is now outdone the NDX year-on-year.

Michael Santoli (3:49)

Absolutely. That's the other beneficiary of this massive rotation toward economically cyclical liquidity beneficiaries. Maybe we get rate cuts. Also, the Russell, I always keep pointing out, that the heavier weights in the Russell are very speculative and kind of fringy. But it is matched by the S&P Small Cap 600, which is starting to catch up a little bit.

Again, on a five-year basis, the Russells had hardly a move at all. It is a lot of this kind of laggards getting their moment in the sun. The real question to me is, is the market collectively overplaying this trade that we're going to have a running hot economy and cyclicals, industrials, banks, all the rest of it have a lot of room to run. So I'm kind of pointing out that the cheaper stocks, the value stocks are not as cheap as you might think they are. S&P value trades at 19 times forward earnings. S&P industrial sector has a higher PE than tech at the moment, which is a rarity. It's happened before. I just, you know, you kind of know what you're buying. You need to assume there's a lot of earnings momentum underneath and probably underappreciated in the forecast for you to think that that trade can carry the headline indexes.