SOTS 2nd Hour: Tariff Whiplash, Nvidia Expectations, and Musk’s “24/7” Promise 5/27/25

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Sara Eisen (0:59)

Good Tuesday morning. 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. Kicking off the week on a high note here for the markets. The S&P up a firm 1.3 percent. We've got every sector higher right now. And the leader, well, it's technology. That's why the NASDAQ is also charging ahead 1.7 percent. Information technology is your best performing sector followed by consumer discretionary and communication services. Energy doing the least best up a quarter of 1 percent. Take a look at Treasuries right now as we also kick off the week. We start with buying. It started in Japan. That was seen as a relief and then continued through the US. The 10-year yield below 4.5 percent. It's 4.48 percent. And importantly, the 30-year yield moves below 5 percent. Ahead this hour, Nvidia gearing up for earnings this week. The stock getting a lift this morning on a report surrounding lower priced AI chips for China.

We've got new details straight ahead. Plus, we will talk about the tariff whiplash and how investors and companies should be navigating fast changing developments here out of Washington as President Trump now dials back the pressure on the EU and markets reward it.

Carl Quintanilla (2:09)

Let's get some Conference Board with Rick Santelli this morning. Hey Rick.

Rick Santelli (2:13)

Yes, and there are some surprises here. This is our May read on consumer confidence from the Conference Board. On the headline number, we're expecting a number somewhere north of 87 Comes in strong, 98.0.

That is the best number since February of this year. But I want to point out something in the Rearview Mirror. Last month's revision from 86 to 85.7 means that last month's headline confidence equals April of 2020, COVID affected. But you have to go back another six years to May of 2014 to find a lower number than 85.7. So a nice rebound over what was most likely a market exaggerated reading last month. On the present situation, 135.9, better than expected. Sequentially more powerful than 131.1. The revision in the Rearview Mirror, best since February. And to make it complete, expectations at 72.8, also the best since February of this year. And follows a slight positive revision again, from 54 and change to 55.4. All three readings, sequentially stronger than last month. And yields, well yields are topping some of the high yields of the session. As that 10-year once again knocking on the door of 4.5%. And even though we ease back from the extremes of last week, don't look for a big setback. There's still a lot of upward pressure on global interest rates. Sara, back to you.

Sara Eisen (3:44)

Okay, that's a relief on the consumer confidence front. Thank you, Rick. Rick Santelli. Turns out de-escalation, higher stock prices helps consumer confidence. This is the first in a big data week ahead for investors as we try to figure out what the tariffs mean for the economy. Tomorrow we're going to get, of course, big earnings from the likes of Nvidia and Salesforce, but also FOMC Minutes from the last meeting. On Thursday, we'll get another look at GDP. Remember that first quarter GDP was in contraction, so we'll get a revised estimate there, as well as some housing and initial jobless claims. And then Friday is going to be key because PCE, the Fed's preferred measure of inflation, comes out. We want to see what that April read looks like. CPI was sort of less scary than people thought after tariffs. Let's see what PCE shows. And guys, just to kick it all off, the underlying trend on the data so far has been resilient. And it's underpinned by jobs in this country. I mean, there was a worry that companies would just get so skittish about tariffs that they would start laying off people. So I chose the worn layoff announcements. If you don't know what these are, it's a good high frequency read. So basically there's a federal law that says companies with a certain number of employees have to give 60 days notice if we're going to see layoffs of more than 50 people. So bigger layoffs, bigger planned layoffs. And we can track that. So here's how April looks relative to job openings. It's pretty benign. And we're not seeing a big spike up in basically warnings for employers about planned layoffs. That may change, but this is a leading indicator that could tell you that lots of layoffs are coming. If you're so worried about business confidence and business planning as a result of cost structures not being certain as a result of tariffs, you might see this kind of thing take up. We're just not seeing it yet, David. And that's a good sign for the economy.