SOTS 2nd Hour: Steeling For More Tariffs, The Energy Outlook - Plus: CEOs of Hilton and Bristol Myers Squibb 6/2/25

SPEAKER_1 (0:00)

Fidelity Trading Dashboard brings live data, news and charts into one screen, so you can build and place trades better. Start for free at fidelity.com/tradingdashboard. Investing involves risk, including risk of loss. Fidelity Broker Services LLC, member NYSC SIPC.

SPEAKER_2 (0:16)

Comcast business helps retailers become seamlessly restocking, frictionless paying, favorite shopping destinations. It's how nationwide restaurants become touch screen ordering, quick serving eateries, and how hospitals become the patient scanning, data managing, health care facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business. Powering possibilities. Restrictions apply.

Sara Eisen (0:45)

Good Monday morning. Welcome back to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla. We are live from post nine of the New York Stock Exchange. David has the morning off. Take a look at stocks. We kick off the week and the month in the red.

S&P down 0.6% of a percent. We got some new tariffs today. Steel and aluminum. Energy, information, technology and materials bucking the trend. Those are all up right now. Everything else is lower. NASDAQ Composite down 4.10. So actually outperforming right now. Thanks to strength in names like Broadcom ahead of earnings. NVIDIA is up this morning. A lot of the chip stocks are higher. Meta too. Take a look at Treasuries as we kick off the week. We've got some big data releases coming out this week and we start firmer on yields. It's a tenure at 4426, so elevated a little bit. The two-year just below 3%. We watched the third year carefully. It's just below that key round number of 5%. Coming up this hour, the CEO of Pharma Giant, Bristol Myers Squibb joins us from the big Cancer ASCO Conference on the back of breaking news around a new partnership with BioNTech. We'll talk to the CEO of Hilton this hour as well about how tariffs and global tensions are impacting travel demand.

Carl Quintanilla (1:51)

Let's get some economic data crossing just now. Rick Santelli's got it. Morning, Rick.

Rick Santelli (1:56)

Yes, good morning. Let's start out with our April construction spending read. Expecting up 2 tenths, it's down 4 tenths of a percent. Down 4 tenths of a percent. And that follows a rather large negative revision to last month. From down half 1% to down 8 tenths of a percent. So back to back negatives there on construction spending. Let's go to ISM. These are May reads and these are the entire read. There's no mid-month on the ISM. Manufacturing 48.5. That means 3 consecutive readings in contraction territory under 50 Weakest since November of last year. So obviously weakest of this year. If we look at prices paid, moving in the wrong direction in terms of expectations, looking for a number around 69.3.

69.4. It is sequentially a bit lower than 69.8 in the rear view mirror. But that means now we've had 4 prices paid readings that are above 60, which is a pretty powerful level. And you're going to look at interest rates. Pay attention to that. Finally, new orders 47.6 following 47.2. That's the fourth in a row in contraction territory. And finally, on the employment front, considering this is the week of employment reports, 46.8, 3 tenths higher than 46.5 in the rear view mirror. And that is the fourth contraction reading in a row under 50 So we see interest rates seem to be not paying a lot of attention to prices paid. They are higher on the day, but they've dipped down a bit, maybe because the readings are sub 50 on headline. And of course, the negative, the red ink in equities is bringing in a little bit of buying, pushing yields off their highest levels of the day. Sara, back to you.

Sara Eisen (3:48)

Okay, makes sense. Thank you very much, Rick Santelli. We do have a big week of data. Jobs is the headline report. We'll get the government jobs report on Friday. But ahead of that, we get the private sector read and we get the Jolts, my personal favorite, job openings, layovers, turnover. Factory orders is coming out tomorrow as well. The beige book, which is always important, has been pretty bearish lately. The Fed pays attention to it, all the color from the different districts around the country. In honor, Carl, of the big jobs reports that we have, just wanted to do a status check on what's happening with the dual mandate. So the Fed cares about two things, right? Keeping inflation in check and maximizing jobs. So let's look ahead of jobs at what's been happening with job openings. We know the Fed has paid attention to this. Chair Powell has signaled it before. So we got this surge in job openings post-COVID, right after the big drop-off during the pandemic. It's been trending lower. And that is as the labor market has cooled off. Nothing alarming. As you can see, we're still above levels that we were pre-pandemic, but it's trending lower. And that important job ratio that economists look at, including at the Fed, we've heard them talk about this before, job openings per unemployed, which gives a sense of the tightness of the labor market, it's come down. It's around one, where it was like two, when it was coming out of COVID. What does that tell you? That we're having this kind of slow easing of the labor market. We'll see if that can firm. This is the demand side, right? Whether companies are looking for openings to fill jobs. We'll get the supply side on Friday, when we get the big jobs report, see how many people are unemployed and how many jobs actually were hired during the month. But it is something we know the Fed pays attention to, and it's signaling the kind of soft landing in the jobs market.