SOTS 10AM: Nvidia Tops $5 Trillion, Mohamed El-Erian on the Fed, Brookfield’s Bruce Flatt from Riyadh 10/29/25

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Carl Quintanilla (0:53)

Good Wednesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber here at Post 9 of the New York Stock Exchange. Sara Eisen, once again, joins us from the Future Investment Initiative Summit in Riyadh, Saudi Arabia. Sara's got another big interview for us this hour. 1789 Capital founder Amit Malik and partner Donald Trump Jr. who've invested in everything from SpaceX to Enduro to Databricks. It is Fed Decision Day in America, and Wall Street will be closely watching the nuances in the news conference today. We will ask Allianz Chief Economic Advisor, Mohammed Al-Arigan, what he's expecting in just a minute. And NVIDIA is making history, topping $5 trillion in market cap as three of the Mag7 names get set to report tonight. We'll talk about how much more upside exists in that space. First though, let's get some housing data with Diana Olek. Morning, Diana.

Diana Olek (1:39)

Good morning, Carl. Pending home sales in September were unchanged from August and dropped 0.9 percent year over year. That according to the National Association of Realtors, the street was looking for a 1 percent gain after an even larger gain in August. Now, this count is based on signed contracts. So people out shopping in September and making that decision when the average rate on the 30 year fix was generally on the decline, but had not dropped as much as it did this month. So it was between 6.4 and 6.5 percent versus today's 6.1 percent. Now, regionally, sales rose in the northeast and south, but fell in the Midwest and west. Inventory has climbed to a five-year high, although still on the lean side historically. The Realtors Chief Economist Lawrence Yun noted in the release that a record high stock market and growing housing wealth in September were not enough to offset a likely softening job market. Carl.

Carl Quintanilla (2:31)

Diana, we'll talk more about that and how it relates to the Fed in a minute. Thank you, Diana Olek. Stocks meantime sitting at record highs as we said, as we await three of the Mag-7 earnings numbers this afternoon, along with the Fed decision and the news conference. Joining us here at Post9 this morning is Muhammad Alarian. Of course, Ali Anz is Chief Economic Advisor. Emmett, it's great to have you back on set. Good to see you.

Bruce Flatt (2:51)

Thanks for having me, Carl.

Carl Quintanilla (2:52)

I mean, first, it's just remarkable, the disparity between what we're seeing in AI-related names and those companies that don't have that advantage right now.

Mohamed El-Erian (3:01)

And it's understandable. As you know, I think AI is a major transformational, general purpose technology. It's like electricity. It's going to change so much of what we do. And it will matter greatly whether you have electricity or not is a huge difference. So for me, it makes total sense. What I worry about is within AI, there are some names that are at reasonable valuations, but that has pulled other names that I think will end up in tears.

Carl Quintanilla (3:27)

In tears?

Mohamed El-Erian (3:28)

Yes. I think this is what I call a rational bubble. It's rational because everybody has an incentive to over-invest in AI because the payoff is so huge, but you're going to have a relatively limited number of winners. So there's going to be some losers in there, but it is a better system than what China has, where the government tells you what you should be doing. This at least has competition and will have better outcomes.

David Faber (3:53)

That's it. China is using its AI, it's diffusing it throughout. A little bit of a different strategy here. There are those who believe, Muhammad, that that actually is a better strategy in terms of at least cementing the possibility for growth throughout, and maybe even mitigating some of the dangers as well.

Mohamed El-Erian (4:11)