Tech Weakness and AI Fears, WBD-Paramount Talks, Ford's China EV Message 2/17/26

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Jim Cramer (0:59)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (1:06)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Mike Santoli at post night of the New York Stock Exchange. Cramer has the morning off. Holidays shortened to week, but it does look like the selling will resume at the open with the NASDAQ down about three percent for the year so far. Busy few days ahead with Walmart earnings on Thursday. Ten year hits 402, almost a three month low. Our roadmap begins with the tech and software slide rolling on. The latest on the AI disruption fear trades as the S&P comes off two straight weekly losses.

David Faber (1:35)

Plus we have a new twist in that bidding war for Warner Bros. Discovery. Netflix grants a seven day waiver allowing Warner Bros. to engage with Paramount Skydance for what all parties believe will be a best and final offer. We're also keeping an eye on EVs. Ford reportedly discussing with the Trump Administration a potential framework in which Chinese automakers could build cars right here in America.

Carl Quintanilla (2:02)

Let's begin with the markets and tech on track for a rough start. One of the sectors that's down along with consumer discretionary over the last three months or so. Financials will throw in there too. A lot of the weekend commentary suggests that maybe at least the software weakness could be persistent for a while.

Michael Santoli (2:18)

I would say weakness or at least it's no longer part of the leadership story is pretty much acknowledged at this point. Now, it's also looking at it as if it's washed out. It's tried to get some support. Everyone thinks we get a reflex bounce, but maybe you sell into it. So I think that kind of tactical understanding is in there. The weakness has mostly been about the unwind of tech leadership over the multiple months. And last week's action was also, I think, the broader market having a harder time kind of rotating away from that and having this internal volatility stay sequestered in growth tech, in mega cap. And you've had this repeated challenge of the S&P 500 It can't make upside progress beyond that 7,000 mark. We've had three 3% pullbacks or thereabouts, we're about 1% at Friday's close above that level. Buyers have come in there. So we'll see if that means that nobody really wants to exit the market. But I do think that this whole notion that, hey, the average stock is beating the S&P. Everything's okay. It's gotten challenged, not just by the fact that it hasn't been able to kind of rotate higher, but that I think the macro picture, even though it seems okay, you look at the bond market rallying, you see the 10-year getting down to 4% and you wonder if people are wondering if this AI disruption story creates some kind of economic overhang or maybe opens the way further for Fed cuts down the road. Because I do think that was in there, but I just want to mention too, in terms of the moment-to-moment action this morning, it does feel as if the Iran headlines have at least had a little bit of a role here, backing off in the futures overnight, and then we got some conciliatory comments from the Iran foreign minister a little while ago that seemed like markets firmed up and the 10-year Treasury yield got a little bit of a lift, but we'll see if that's really what it was about.

Carl Quintanilla (4:03)

Reports of at least parts of the Straits of Hormuz being closed for some missile drills, large missiles on the part of the IRGC. Meantime, David, I mean, M&A is in the mix today. There's some activist news.