SOTS 2nd Hour: Israel-Iran Latest, Drill Baby Drill, and Fundstrat’s Tom Lee 6/23/25

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Sara Eisen (0:54)

Good Monday morning, and welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live as always from Post 9 of the New York Stock Exchange. Stocks are higher. We've actually been climbing all morning, early drop at the open, but amazing resilience in the face of these heightened geopolitical risks after the US bombs Iranian nuclear sites over the weekend. S&P up 4 tenths of 1%, the NASDAQ up a quarter of a percent, and the Dow up 132 points. As for treasuries right now, perhaps teeing off of the move in oil prices, saw earlier higher yields, now lower yields. There's buying the 10-year yield 433, the two-year yield 3.8, so lower across the board. Coming up this hour, Wall Street reacts as the US enters the war between Iran and Israel. We've got a great lineup to navigate the latest developments, including former Israeli ambassador to the US, Michael Oren, along with Tom Lee and Muhammad Alarian on the markets.

Carl Quintanilla (1:48)

First, though, some fresh housing numbers just crossing the tape, and for that, we'll turn to Diana Olick. Morning, Diana.

Diana Olick (1:53)

Good morning, Carl. Existing home sales in May rose very slightly, up 0.8% from April to a seasonally adjusted annualized rate of 4.03 million units, according to the realtors. The street was looking for a slight decline. Sales were 0.7% lower than May of last year. That is the slowest pace since 2009 for May. Now, this count is based on closing, so contracts likely signed in March and April. The average rate on the 30-year fixed mortgage was steady in March, but then shot higher, over 7% in April. The increase in sales was likely fueled by a big jump in the supply of homes for sale. 1.54 million units available at the end of May. That is up over 20% from the year before. At the current sales pace, that's a 4.6-month supply, which is actually still historically on the light side, and that's why we're still seeing pressure on prices. The median price of an existing home sold in May, $422,800, up 1.3% year over year, and a record high for the month of May, but it is the smallest annual gain since June of 2023 Now, homes are taking longer to sell, 27 days versus 24 a year ago. Just 30% of buyers were first timers, that's down from 31% last year, and still pretty low. 27% of all transactions were all cash, and that is higher than last year.

SPEAKER_7 (3:11)

David?

David Faber (3:12)

Diana, thank you. We're also getting some breaking headlines from the Fed. Steve Leesman has those for us. Steve?

Steve Leesman (3:19)

David, thank you. Fed Governor Michelle Bowman is saying that if inflation remains contained, she would support lowering rates in July, becoming the second Fed official, actually second Fed governor as well, to say so. She says it is time to consider adjusting the policy rate. The data, she says, have not shown clear signs of impact, impacts from tariffs and the progress on tariff negotiations could lead, she expects to lead, to a less risky economic environment. The tariff impact could take longer, be more delayed and smaller than expected. Higher prices from tariff issues are being offset by other factors. She does talk about the current conflict in the Middle East, saying it could lead to higher commodity prices. Part of another section of her remarks where she still has some concerns about inflation, but overall, she says we should put more weight on the downside risk to employment. Guys, this is a particularly significant development when it comes to how the committee is thinking and where it may be moving.

Sara Eisen (4:17)

I know we don't want to go here, Steve. Fed is not political, right, and they don't make their decisions that way. However, it is notable that she is Republican, appointed by Republican president, another one, who is looking through the tariff price increases. While some of the Democrats on the committee, Adriana Kugler, for instance, the governor who was appointed by the Biden administration are more worried about the inflationary effect. It's sort of like what we see in the University of Michigan sentiment.