SOTS 2nd Hour: The AI Bubble Debate, EA Goes Private, & Pot Stocks Light Up 9/29/25

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Sara Eisen (0:54)

Good Monday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live as always from Post 9 of the New York Stock Exchange. Stocks are kicking off the week in positive territory, at least looking at the S&P 500, a little more pressure on the Dow, down 25 points. The S&P, though, higher and it is led by technology. As you can see, the NASDAQ starts off strong. We're up almost a full percent on the NASDAQ. After last week, tech underperformed on this climb in yields. As for treasuries, we start the week where yields are sitting near one-month highs. There's some buying today, lower yields, 4.14 is the ten-year note yield, two-year yield, 3.6. Today, tech stocks are rebounding, as mentioned after concerns last week about sky-high AI valuations. We'll ask AI and tech investor Byron Deeter if he thinks we are approaching bubble territory. Plus, Tesla has been on a hot streak lately. Even as we approach this week's end of the federal government's EV tax credits, former Tesla president John McNeil will join us to discuss. And the endgame for EA, the video game maker going private in a deal worth more than $50 billion. Details on the buyers. Straight ahead.

Carl Quintanilla (2:02)

It's been a busy few sessions for housing data and there's more today. Let's get to Diana Olick. Hey, Diana.

Diana Olick (2:08)

Hey, Carl. Pending home sales in August rose 4% from July and were 3.8% higher year over year. That is a strong beat. The street was looking for flat.

This count is based on signed contracts, so it's a forward looking indicator of closed sales in September and October. Now, mortgage rates in August when people were out signing these deals were slightly lower than they were in July, but not as low as they are right now. Last week, we saw a huge jump in sales of newly built homes, which are also measured by signed contracts. And while most expect it to be revised, lowers all agreed that the trajectory for sales overall is higher because of falling interest rates. Now, a survey of Realtors showed 19% expect an increase in buyer traffic over the next three months. That's up from 16% last month, but fewer expect an increase in seller traffic compared with July. We did see inventory in August fall for the first time since the start of this year. Sales increased in three out of four of the regions with just the Northeast dropping. Sales were strongest in the Midwest. Of course, that's where homes are cheapest. Sara, back to you.

Sara Eisen (3:13)

Okay. Good news there, I guess. Thank you, Diana. Diana Olek. We're going to get a lot of government data and economic data across this week. I mean, jobs is the big highlight on Friday. We'll see if we get that. If the government shuts down, probably not. But it doesn't matter because there's still a lot of other big stuff. For instance, on the job market, Joltz will come out tomorrow ahead of that shutdown deadline. That's important because job openings have been trending lower. Then ADP, which is the private sector read, will happen either way. So it hasn't been the best indicator for the government jobs report, but important to see the direction nonetheless. And then we'll also get, assuming things work, we'll get ISM services, we'll get some consumer confidence.

The shutdown odds at this point, a little more than 60 percent, if you look at some of the betting markets, the polymarket or whatever, you get a higher percent chance if you go for shutdown odds this year. But this is for tomorrow night, shutdown odds, they have been increasing. And jobs is really the key, right? The Bureau of Labor Statistics releases every month the jobs report. And it's really important because they trade off of it, the Federal Reserve has increasingly been paying attention to the labor market and worried about the slowdown in jobs. And that's really been the story. We want to see if the slowdown in job growth is for real. And again, we kind of want to see whether it's a supply issue or a demand issue. I'm not sure that there's a firm answer on that, but there's no doubt, Carl, the trend has been weaker jobs growth. I mean, we've really slowed to a halt. Last month, it was 22,000 jobs added in the month of August. That's very different than the more than 100,000 we were getting per month last year, as you can see.