SOTS 2nd Hour: You Meta Believe It, Microsoft $4T, plus – ARM CEO, NYSE Pres. Talks Figma IPO 7/31/25

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Sara Eisen (0:51)

Good Thursday morning, welcome to Squawk on the Street. I'm Sara Eisen with David Faber, and Jim Cramer joins us as well. Ahead of an interview, you do not want to miss the CEO of Arm, as shares pull back following quarterly results. That's in just a moment. But first, broader markets, well, they're winning today again, thanks in part to just this stunning move in Meta, up almost 12% right now. Microsoft also rallying big off of earnings. That's why communication services and technology are your best performing groups in the overall market right now. That's why the NASDAQ is up 1.6%, but there's also strength in industrials, financials, energy and material sectors today as well. Take a look at treasuries, got some inflation data, which we'll mention in a moment. There's buying, which has been a reversal after yesterday's Fed meeting. Tenure yield 4.35. Remember, big jobs report tomorrow. Also ahead this hour, we are awaiting Figma's first trade after the software company priced above its expected range. It's very loud here at the Stock Exchange. Got a big crowd for the Figma IPO and the New York Stock Exchange president, Lynn Martin, will be with us to talk about the latest debut and what else is in the pipeline. But guys, the big economic report that everyone was waiting for today was PCE. This is the Fed's preferred inflation measure. And PCE prices on a monthly basis went up 0.3 percent. That was in line year over year. We're at 2.6. Remember, the Fed wants to target 2 percent. So we don't want to see it move in this direction. 2.5 was the estimate. It's a little bit elevated. Core prices are a little bit elevated at 2.8. It's nothing to freak out about. But as you can see from the chart, remember after that huge inflationary spike we saw in 2022, we've come down and now we're a little bit elevated from the bottom levels of where we were. Is it enough for the Fed not to be cutting? Well, certainly Fed Chair Jay Powell thinks so.

I was surprised at how hawkish he was. He took a lot of opportunities during the news conference yesterday to reiterate that he's just not there yet on not worrying about inflation and being able to cut interest rates. Don't you think, Jim?

Jim Cramer (2:53)

Well, I just think that there's two economies that is not being addressed enough. I think it was a very elitist view. I'm a big fan of Jay Powell, but the consumer can't afford the price of a steak sandwich. The consumer is staying away from Home Depot. The consumer can't buy a house.

The enterprise is so strong that it's kind of making up for everything. But we must not forget that the consumer is still seeing inflation. And I know people are talking about the Goldman Report, which is saying not all of it is being passed down. Not all of it. But we're in the early innings. Eventually, it might get passed through. So there are real issues here. Inflation could come. It doesn't have to be clear that the Fed can combat that kind of inflation. But the consumer's got some problems.

Sara Eisen (3:38)

Agree. I thought, though, that Powell really emphasized that he's more worried about inflation now than any softness in the economy, to your point. And time after time in the news conference, I mean, he suggested he's stubbornly sticking with the view that they have to wait and see on how these tariffs will impact inflation. Listen, we compiled some good sound bites on all of it.

Jay Powell (3:58)

Near-term measures of inflation expectations have moved up on balance over the course of this year on news about tariffs. Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen. It is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed. Consumers are starting to show up in consumer prices, as you know, in the June report. We expect to see more of that. And we know from surveys that companies feel that they have every intention of putting this through to the consumer. You could argue we are a bit looking through goods inflation by not raising rates. Of course, in the end, there will not be. This will not turn out to be inflation, because we'll make sure that it's not.