SOTS 2nd Hour: State of the AI Arms Race, CNBC Fed Survey, Trump’s Tariff Plans 1/28/25

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Carl Quintanilla (0:47)

Good Tuesday morning. Welcome to another hour of Squawk on the Street. I'm Carl Quintanilla with Leslie Picker and David Faber, live at post night of the New York Stock Exchange. Sara Eisen is the morning off. Bulls definitely looking for a turnaround Tuesday, not compelling at the moment. Dow is still down about 30 points. S&P roughly flat up than less than a point, and we are going to get some data in a few moments. Ten year holding on to 455

Leslie Picker (1:09)

We are 30 minutes into the trading session. Here's some movers. We are watching a volatile session for NVIDIA after the biggest one day market cap loss for a public company ever, shedding nearly $600 billion in value yesterday. Currently those shares rebounding slightly up about 1.5%.

Royal Caribbean, a top gainer on the S&P after fresh numbers and strong guidance, execs added that bookings have accelerated since the last earnings call, and that stuck up nearly 8%. Their CEO here to break down the numbers next hour on Money Movers. And watch shares of GM, that one reporting a top and bottom line beat, guidance above the range. Shares have been a big outperformer over the last year, but currently trading down about 9%.

Carl Quintanilla (1:51)

Getting some consumer confidence data out a few moments ago. Rick Santelli's got it. Morning, Rick.

Rick Santelli (1:57)

Good morning, Carl. These are January conference numbers from the Conference Board. On the headline number, expecting very close to 106, a bit of a miss here, 104.1. And in the Rearview Mirror, though, there is a big positive revision. 104.7 jumps up to 109.5. 109.5 last month would end up being the best since July of 23 So the revision is big. It really is solid. Now, if we look at present situation, 134.3, 134.3 is the most weakest since SEP of 24 Obviously, it's sequentially lower. 134.3 following 140.2. What lies ahead are expectations. 83.9. Believe it or not, this is actually the best since NOVA of last year. So not that big of a comp. 83.9 doesn't sound so strong, but it is following 81.1. If you really want to look at a solid number, we're confident to NOVA, but NOVA is all the way up at 93.7.

And finally, if we look towards the Richmond Fed, we have manufacturing and service sector on the manufacturing side, minus 0.4. Minus 0.4. That's actually better than we're expecting. We're expecting a number in minus double digits, minus 10, minus 11 And if we consider this is now the 15th consecutive negative number in a row, but it's still the best since May of last year at minus 4 And finally, on the service side, positive 7 is our read. Positive 7 would comp, of course, to last month's 14 It ends up being the weakest positive number going back to October when it was negative at minus 4 We see that interest rates haven't moved much on that data. 455 is up 1 on a 10 420 is unchanged on a 2 7-year, 44 billion of them will be auctioned off at 1 o'clock Eastern. Carl, back to you.

Carl Quintanilla (3:59)

See it 1, if not before, Rick Centelli. It was a tale of 2 markets yesterday, as you know. Tech coming off its worst day since 2020 Hundreds of billions of market cap are raced while sectors with no direct AI exposure, like real estate and staples, did end the day higher. Staples even recording its best day since 2022 Our senior markets commentator Mike Santoli watched it all happen, has some thoughts 24 hours later.

Michael Santoli (4:22)

Pretty stark rotation as opposed to liquidation, to the point where you see it's almost mechanical and forced. Okay, nothing happened yesterday to get Campbell's soup up 2.5 percent, except that NVIDIA was down a lot and people did not want to completely exit the market, and so it found its way into the more neglected corners. It's a healthy response. I mean, the idea that you've been able to kind of make it happen in the market, stay near all-time highs, when by the way, semiconductors on a relative basis peaked in June of last year. They've not been leadership for seven months. Yesterday was a little more of a give up trade in that area, but one that's just exacerbated the ongoing pattern. I think there's an issue if the market has to rely on this. I mean, rotation is great. It keeps volatility suppressed. It enables the market to let some areas cool off and perk up in other parts of laggard sectors.