SOTS 2nd Hour: Tariffs Whiplash: Latest Developments, GDP Breakdown + Nvidia Earnings Takeaways 5/29/25

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Sara Eisen (0:55)

Good Thursday 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. Stocks are still in a celebratory mood after that court ruling struck down the reciprocal tariffs by President Trump. Not quite as high, though, as it looked, say, in the overnight futures. The S&P right now up 6 tenths of a percent. The Dow's up about 79 points. NASDAQ up 163, about 8 tenths of a percent. You do have tech out performance. Let's take a look at treasuries right now as well. Remember, you had firmer yields yesterday. Got some mixed data today, which we'll digest in a moment, but there's buying. We saw that overnight. That continues through the session with lower yields, which is perhaps comforting equities as well. 444 on the 10-year to have another auction this afternoon, seven-year. Coming up, Wharton professor Jeremy Siegel, his take on the tariff ruling, what it means for the market, for growth, plus how tomorrow's key inflation report could shape the Fed strategy. And happening this hour, Boeing CEO updating his turnaround strategy at a conference will bring you all the headlines as soon as they happen. The stock's up a little more than 1%.

Carl Quintanilla (2:01)

Little housing data on deck with Pending Homes. Let's get to Diana Ohlick this morning. Hey, Diana.

Diana Olick (2:05)

Hey, Carl. Yes, Pending Homes sales fell a much wider than expected, 6.3% in April from March. The street was looking for flat, sales down 2.5% from April of last year. I don't know why the street was looking for flat because this isn't surprising when you consider that this count is based on signed contracts on existing homes during the month. That is people out shopping when the stock market was on a roller coaster because of the tariff announcements, which all caused the average rate on the 30-year fix to jump to well over 7% from a low of 6.6% at the start of the month. Now regionally, sales fell across the nation, but hardest in the South and West. The South saw prices overheat the most since the start of the pandemic, and the West was always the priciest region. The South is now seeing prices come down in some spots, but even sales in the Midwest were also down a lot, despite it being a more affordable region. That's likely because there's less supply there due to recent higher demand. Now inventory levels nationwide are hitting a five-year high, but mortgage rates are still not coming down. We're right around 7%. Prices, as I said, are easing in some regions, and that may prompt some potential buyers to wait longer to see if prices come down even more. Back to you guys.

Sara Eisen (3:16)

And Diana, you've been talking a lot about the dynamic between existing homes and new home sales with more strength in the new home sales space, right? Why is that?

Diana Olick (3:25)

Yeah, we actually saw new home sales in April, which are also based on signed contracts, jump 11% month to month, but that's because builders ended March with a nine-month supply of homes for sale. That is a lot. So they were doing everything they could to unload these homes. That is mortgage rate buy downs, incentives, price cuts, throwing everything they could. The builders have a lot more levers to pull than the existing market does. That's why you saw those builders get so many more sales in April.

Sara Eisen (3:52)

Yeah, big gap there. Okay, thank you, Diana. Diana Olek, other big economic report of the day for the macro setup is the GDP report. So this was the second look at first quarter GDP. And remember, this was a negative number. It was the first time we saw that kind of contraction since 2022 So good news, bad news. Overall, negative 0.2 looks better than negative 0.3. And that was the headline we got today. It doesn't really matter because this one was heavily distorted by frontloading of the Trump tariffs. The important point to pull out of this that I think will get the most attention today is that there was a downward revision in consumer spending. This economy is a consumer driven economy. That's the growth engine. Look at the consumer spending portion there. So the first look was higher than the second look, the sort of darker blue. That's what we got today. And it was a revision down. And that's what I just wanted to highlight. It was 1.2% consumer spending in the first quarter, whereas we initially thought it was 1.8%. And that's sort of the cleanest read of demand going into the second quarter, which David, we expect growth to rebound in the second quarter. I think Atlanta Fed is tracking 2.2% right now, but just notable as we're trying to track the ins and outs of the consumer and just how much sort of weakness and slowness there is given the higher levels of uncertainty and some of the confidence surveys showing the consumer's been shaken. Right.