SOTS 2nd Hour: PCE Breakdown, S&P/Nasdaq Record Highs, & Top Tech Picks w/Dan Niles 6/27/25

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Sara Eisen (0:47)

Good Friday morning. Welcome to Squawk on the Street. I'm Sara Eisen with David Faber. We are live from Post 9, as always, at the New York Stock Exchange. Carl has the morning off. Take a look at stocks, record highs here at the open for the S&P and the Nasdaq. First time we've seen that for the S&P since February, for the Nasdaq since December. Intraday highs, just an amazing comeback from those April lows after Liberation Day, up more than 20% since then. And it's, you know, another broad rally. Yes, technology has been fueling it. Nasdaq's up half a percent, but the only sector down right now is energy. That's been a common thread this whole week. Consumer discretionary is your best performer. Thank you Nike, up almost 15%.

We've got a lot to say about that. Take a look at Treasuries as well. Some reaction to the data this morning, which we're gonna dive into, but their firmer yields, 10-year yield, 4.275. Today, if you missed out on the rally, is it too late to get in? Investor Dan Niles joins us with the tech names that he likes right now as stocks hit record highs. Plus, we'll take a closer look at Nike, as that name now paces for its best day since the 1980s and leaves the Dow on the back of earnings. But first, David, let's start with the all-important PCE.

David Faber (1:58)

Yeah, tell me.

Sara Eisen (1:59)

There's a little stag, and there's a little flation in this report. So which one do you want to do first?

David Faber (2:05)

The stag.

Sara Eisen (2:06)

Let's do the stag. I agree because I think that's probably a bigger worry here. The stag comes in the personal spending numbers. So what we learned during the month of May is that spending actually declined 0.1%.

And that was a surprise. We expected spending to be firm. Can you explain it by the fact that, remember in April we saw a surge because everyone was loading up ahead of tariffs and they were buying cars and they were buying washing machines and they were because they were worried about tariffs. And so maybe there was a give back in May. Either way, I think you have to look at this number and wonder about the strength of the consumer. Remember we had all that soft data where consumer confidence plunged and we were wondering is it going to come out in the hard data? Well, this would argue that yes, there was a pullback because if you look at some of the categories in the spending numbers, it was pretty broad.

I mean, it was across the board from durable goods to cars to apparel to financial services, they were all down in the spending numbers. So that's the stag, that's the economic challenge part of this report. We're showing now the inflation part of the report. Well, now we're showing spending, but inflation. So inflation showed a mild increase, just a tad. We're talking tenths of a percent here, especially on core. So the overall number to watch is the 2.3 percent. That's the May inflation number. Remember, you know, we were getting down to 2.1 percent, which the target for the Fed is 2 percent. So you don't want to see that number go up, but it was pretty much on target. The core number was 2.7 percent, which was a little bit higher than where it was before. Bottom line, mild, mild increase in inflation. Don't want to make too much of that, especially because the Fed's, you know, the Fed's worried about it. It will give the hawks some reason to think, oh, that's going to go up.

David Faber (3:49)

It is an increase, though, even though it's, I mean, you know.

Sara Eisen (3:51)

No, it is, for sure.

David Faber (3:52)

It's not much, but it's something.

Sara Eisen (3:53)

It's an increase, and maybe more importantly, it indicates that the progress has stopped, at least this month, right? But Chair Powell himself this week said, if we're going to see tariff inflation, we're going to start seeing it in June, July. So there's not much evidence that it's like some widespread tariff inflation. So let's watch that. I think if you're on the Fed and you're worried about inflation, you can say, look, the progress has stopped and we're worried that inflation is coming. I think if you're on the Fed and you want rate cuts, like a wall or a bone, then you can say, look, we need to get ahead of an economy.