SOTS 2nd Hour: SCOTUS Tariffs Hearing, Lemonade CEO Talks AI Insurance, & LIVE: Bank of America CEO 11/5/25

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David Faber (0:02)

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Daniel Schreiber (0:10)

Investing involves risk, including risk of loss.

David Faber (0:12)

Fidelity Broker Services LLC, member NYSE SIPC.

SPEAKER_4 (0:17)

Hey, welcome into Walgreens.

SPEAKER_5 (0:18)

Hi there. All right, hon, I'll grab the gift wrap, cards, and oh, those stuffed animals the girls won.

SPEAKER_1 (0:26)

Great, and I'll grab the string lights, and so. So how about I grab some cough drops?

Krishna Guha (0:32)

This is not just a quick trip to Walgreens.

SPEAKER_5 (0:35)

I'm fine, honey.

SPEAKER_1 (0:37)

Just in case, you know what they say, tis the season.

SPEAKER_4 (0:41)

This is help staying healthy through the holidays.

SPEAKER_1 (0:44)

Walgreens.

Sara Eisen (0:45)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live for you as always at post nine of the New York Stock Exchange. Coming up this hour, the Supreme Court case that all of Wall Street is watching. As justices, your arguments today and the case around President Trump's authority to impose tariffs will take you live to Washington for the latest. Plus, Bank of America holding its first Investor Day in more than a decade. CEO Brian Moynihan will join us exclusively to discuss and Lemonade, adding to big gains on the year this morning after solid results. We'll talk to that company CEO about the intersection of AI and insurance.

Carl Quintanilla (1:20)

Got some PMIs last hour. Now it's time for ISM. Let's get back to Rick Santelli. Hi again, Rick.

Rick Santelli (1:26)

Hi, Carl. Well, this is a different story. You see yield zoom, zoom, zooming. That's because of the following data points. October read on ISM services are strong. 52.4 is the headline. Well above expectations. Two and a half points above our last look. Sequentially strong. Best since Feb of this year when it came in at a strong 53.5. Prices paid, moving the wrong way. Another reason yields are going up.

70.0. We're expecting 68, 69.4 in the rear view mirror. Highest prices paid since October of 22 Three years. If we look at the new orders, also well above expectations. A wild 56.2.

That would be the best going all the way back to October of last year. One year high there. And on the employment front, we saw ADP better than expected. Nothing terrific. This is pretty solid. 48.2. 48.2. Still in contraction territory. But better than expected. Better than the 47.2 in the rear view mirror. And 48.2 would be the best since May, when it was in expansion territory the last time, at 5.0.7. So these are solid numbers. We're trading 414, now that's up a handful of basis points, as we're hovering with some of the highest closes since early October. David Faber, back to you.

David Faber (2:57)

All right, Rick Santelli, thank you. The Supreme Court just kicking off arguments on the legality of President Trump's tariffs. Amon Javars is outside the court and he has the latest for us. Good morning, Amon.

Aiman Javers (3:10)

Hey, good morning, David. It's going to be an enormously high-stakes day here at the Supreme Court today. President Trump says he's not going to attend today's oral arguments after all, but Treasury Secretary Scott Bessent is expected to be seated in the front row. President Trump says he believes this will be one of the most important decisions ever made by the Supreme Court. A very large part of the tariffs that the president has enacted this year are on the line here.

The Trump administration is asking the Supreme Court, where Trump has appointed three of the nine members to reverse a ruling from a lower court that found that most of the tariffs are an illegal use of the International Emergency Economic Powers Act, that Trump has used that law to impose what he called fentanyl tariffs and Liberation Day tariffs. An estimated $90 billion in tariff revenue hangs on the high court's ruling here. The Treasury has said it would most likely have to return that money back to the people who paid it this year if the Trump administration loses this case. Now the Constitution, remember, gives the power to impose tariffs and taxes to Congress and no president before Trump has used this 1977 law to put tariffs in place. But the law does allow the president to quote-unquote regulate imports of property owned by a foreign country or a foreign national. The White House says that's enough to allow these tariffs, but the businesses that are suing the administration here argue that the power to regulate is not the same as the power to tax and therefore these tariffs should be struck down. We'll see what the court has to say in a short time. And by the way, guys, the companies that are suing the administration here, not the big global conglomerates you might expect, the two initial cases here brought by small firms, including two toy manufacturers, a New York wine importer and a women's apparel company. Back over to you guys.