broadly speaking, the dow is under pressure, nasdaq is under be pressure and small caps are the worst performer, ty? >> yeah, the nasdaq down 3% as you see right there. 500 points on the nasdaq. thanks for watching "power lunch." >> "closing bell" picks things up right now. >> kelly, thanks. welcome to "closing bell." i'm scott wapner live from the new york stock exchange. the make or break hour begins with the critical countdown to big-time earnings. apple and amazon are set to report their results. our experts are at the ready with all you need to know. we're going to bring them in in a moment. we will show you the scorecard with 60 minutes to go in regulation. very rough day on the stocks. raising questions about just how much growth is slowing in the u.s. economy. there's your picture.

ugly pretty much everywhere. nasdaq falling down 3%. interday. that's the lows of the sessions. that's a low of 500 points. got to show you bond yields. the 10-year yield drops below 4% for the first time since february. there it is now. take a look at 3.97. l looks at the russell. one of certainly the biggest decliners. 3 2/3% decline for the russell today. we have to show you crude oil because it's falling as well. anything sensitive to the economy for the most part is down. and by the way, famed oil trader mark fischer is going to join us right here at post 9 in just a bit on where to make money in that space right now. he always has some good ideas. you want to hear from him exclusively. you will in a bit. it takes us to the talk of the tape. this unsettled market and the key earnings that are looming.

joe teaaranova, malcolm ethridg and mark, i'm going to hit the market first. bear with me for a second. we're in the midst, joe, of what is a pretty sizeable selloff. dramatic reversal from it seems how we felt not 24 hours ago. >> a very dramatic reversal that was led by the russell 2000 index. i was there, watching it, trading it. i saw the reversal after chairman powell spoke. the mean reversion trade for small caps relative to midcaps and large caps and megacaps, it's over. it's over. the remainder of the year. i've been skeptical about the ability for small caps to outperform their equity cap size brother and sister for the remainder of the year. everyone is going to come on the network in the next couple of

days and say, this is normal, this is ordinary, everything is fine. i'm going to echo this. what the viewers have to understand, this is the month of august. the month of august and the month of september are the two worst months in a calendar year over the last 15 years. the real message is elevated volatility is going to be present during these two months and investors just have to be prepared for that environment and risk off days. today is a classic risk off day. >> you could say anything about the economy. i mean, this is not about the russell. this is about -- >> well, the russell. >> -- economic data -- hold on. economic data was weak. obviously the russell is going to be more sensitive to that. the. >> yeah. >> bond yields are falling. as i said, 4% below since february. that's the story. bad data is bad. there are serious questions as to whether the economy is weaker than people think, including the fed chair who talked yesterday about normalization.

there are pockets of weakness but nothing to be too alarmed about. that's what this is about. >> the other day we talked about it on halftime. the fact that the economy was weakening and that we saw -- i remember sitting here with you. we saw a 10-year treasury at 4.1%. i said, well, why isn't that russell 2000 rallying in the face of that? it's exactly the reason that you are underscoring. it is the fact that the economy is weakening and chairman powell did nothing to assuage the concerns that investors have surrounding that. i'm troubled. i'm troubled about tomorrow -- >> what do you mean he did nothing to assuage -- i just said what he said. >> so, he should have -- he should have signaled that they are going to cut rates. he should have been firm in signaling that. he should have said to the market, we are going to begin cutting rates in september the same way he did in november of 2021. he said we're going to raise rates. he hinted around it. he hinted around the edges. just come out and say it.

just say it. we are going to lower rates. >> he said cuts are on the table and he said it about 20 times when he was asked. i don't think anybody left yesterday's news conference confused about what's on the table in september. >> i think -- i think chair powell did everything he possibly could to say september is on the way, and i think that really what we saw was a fed chair that did everything he possibly could to have his cake and eat it too. he wanted to make sure the fed looks and stays apolitical but also did what he could to tip his hand in advance to let us know cuts are coming and do what you will with that information but those cuts will be coming in september. >> you want a redo on that? >> no. >> he was as explicit as a fed chair could ever be. >> tomorrow if the unemployment rate comes out at 4.2 or 4.3, we

have to wait until september? >> he said that. >> okay. he said that. we've gone from 3.7 towards 4.1. we're potentially going 4.2, 4.3. i'm concerned tomorrow if you have a bad unemployment report, josh said it today, bad news is bad for the market. the market tomorrow on a bad unemployment report is not going to look good on a friday. >> i mean, he talked about the balance of risk changing, right? it used to be about fighting inflation. now he's got much greater confidence that inflation is coming back towards target. it is now essentially all about the labor market. >> i'm not sitting here trying to place all of the blarmme for the selloff on chairman powell. i would have liked him to be more confident and direct. i would have liked him to say in september a 25 basis point is coming -- >> he did it in november of 2021. >> cutting 25 basis points in --

>> in november of 2021 he said we are going to start raising rates. i am not -- i don't want to place the blame on him because you're right, this selloff is about the fact that the economy is not as strong as many people have suggested that it is and the signs for that have been in place for the last several months. it's been in place when you listen to a lot of the earnings reports and when you hear the commentary in frick -- in from cfos. >>. >> you don't need the fed funds rate when you are seeing a much better environment than the fed was adversarial for. >> when chair powell finished. agrees with you. he said they should have cut

yesterday. he thinks we're going to get 150 basis points worth of cuts this year and he agreed that he doesn't think the economy is strong -- as strong as people think. let's listen. >> when we look at today. >> history when we look at it, i kind of believe we will say we were in a recession in september of 2024. employment was on a downtrend, flattened out and now it's been rising. so i don't think the economy is that strong. >> malcolm, should the fed have cut yesterday. >> it's apolitical.

>> whether it was earlier in q1. >> it's loom being in overtime. is that greater importance.

it's a grand slam in the last inning. it's getting the benefit of the doubt. >> what you want them to do. >> it's accelerate and share buy back plan from what we witness.

>> sending it back years on years all the time. >> investors where they should be. >> it's 19%. it's at microsoft. amazon to talk about. it's 10%. then they're going to want it.

>> i think fundamentals. they came out and that stock happened. i like amazon as long and all loads leave it. all of these megacaps. how much are you spending. a return on investment the roi. >> the street's going to be

tolerant. >> cap ex. it's continuing with the workloads. you make that pitch tonight. >> i think most of it and the last time you know it. it's right up to it. you want amazon and you also added apple. why now the?

. >> the debt to equity. it's really in a perfect class or a perfect storm. i'm excited. to me it seems to be the one with the most potential. >> malcolm, does it have to be perfect. >> it does. it's a little bit differently from joe and mark. aws growth is going to be important. the up side.

they maybe start to discuss the opportunity with ai generated advertising. those margins are even more favorable. >> it's a different number.

>> it's really lighting it up. >> amazon is huge. they closed the loop. it's there somewhere else. a.mmazon has this and the ai as well. they use ai to improve. if amazon can prove it. and add creative. that's really interesting news. and they nailed it. >> are you concerned for u.s. growth. the estimates, does that give you any kind of pause?

. >> it's a command issue. you might mention this but we spoke about this earlier. i think 17% will be there. you take amazon shares here. aws will give us a number. >> aws came in at 16 or 17%. >> it's still up 20%. theoretically. whatever those thought of numbers are. mark, i'll let you run. >> next time. >> quickly with these two

gentlemen here. you concerned going in. china, not number one. number one is where is the demand? >> the expectation is quartered to have a return. >> functionality related to artificial intelligence and future phones. will it look like that in the iphone 15? will the consumer have the first product in their hands that's tangible to them regarding everything they've heard about the excitement of ai? i think that overwhelms everything. i think if they fail in that message then you're going to see some disappointment surrounding

the stock. i'm not as excited in apple or amazon. it doesn't mean i'm pessimistic. i'm somewhat optimistic. if numbers are strong in china, that's okay. if you don't tell me something good about ai and the phone, that's where we're going to have a problem. >> this is one of those quarters, malcolm, where it's never a non-event. apple is always a big event. you're only going to get so much because it's the september quarter, of course, where you start to hear more about the phone and the upgrade cycle and that's where all of the money is riding on. >> i agree with you guys, scott, but i definitely think q2 is going to be a bit of a yawn but i do think this is the place where apple shares look to take off. i've had to actually change my tune on apple a little bit since the announcement of apple intelligence simply because i've gotten a chance to learn to

monetize the technology in the near future. being able to call up and email and use a voice assistant and interact with chatgpt to craft a response. consumers may be willing to pay up which would go a considerable way to diversifying the revenue away from just the iphone. i definitely think this is a pivotal place for apple, but i also expect them to show up and prove it in the september quarter to your point. so this maybe is the place where you want to be getting in because the shares don't have a down side, it's all 'sieve once we get the upgrade to the iphone. >> you've already gotten the pull back in the month of july. >> you mentioned earlier in the conversation about consumer spending and shake shack. i think these two companies tonight maybe provide the best insight towards true consumer spending, certainly in the case of amazon that's clear. >> all right. we'll leave it there for now. joe, you're going to hang

around. that's malcolm ethridge of cic joining us ahead of critical earnings points. in the midst of what's a dramatic selloff. we'll go to pippa stevens for a look at some of the biggest names moving. >> shares of ch robbins shot up 13% to the highest level in more than a year after the logistics company posted better than expected earnings. they cited the company's structural improvements and a second quarter of strong performance within a tough market. the mobileye global is plunging. it adjusted the operating income forecast. the company facing a sluggish demand in china saying the automotive market there is, quote, very, very volatile. those shares down 23%. >> all right. pippa. come back to you in a little bit. we're just getting started. up next drilling down on energy today because the energy oil

trader mark fisher is here where he sees that sector heading. he joins us after the break right here on post 9. of course, we're all over the selloff as well. we'll show you the major averages. nasdaq is leading it down near 3%. that's of the majors. the russell, 3 2/3% selloff. live at the new york stock exchange. you're watching "closing bell" on cnbc. (♪♪) sofi is helping me get my money right to achieve my ambitions. plus i'm investing in my game. sofi can help fund all your ambitions. (♪♪) no matter how ambitious. bank with sofi to score a higher apy and an epic welcome bonus. the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future. a future where you grew a dream into a reality. it's waiting for you. mere minutes away.

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oil prices giving up.

>> it's been in the last four years. >> we develop the systems. next tuesday. >> long crude. long cracks. >> if you look for fundamentals to match up maybe with that, is that because of heightened tensions in the middle east? here we are talking about a potentially weakening economy dragging down the price of crude. what's the push/pull on those two variables? >> all those systems are all

technical ai-based systems. they don't look at fundamentals. what happens in energy every weekend the market sells off. this is the most interdate bullish period we've seen in years. >> is it related to the hurricane season? >> no. not yet. hurricanes -- maybe it could be. i guess the hurricane seasons is coming up and i think obviously what's going on with, you know, i call it climate uncertainty, right? it could be people thinking cracks could explode, something happens to the refiners in the south. >> i feel like you nailed the call more than a year ago for certain where you suggested crude was going to stay in a range of 70 to 90, which it basically has. given what you've said and you're certainly talking on an interday thing, so you're really talking about day trading crude.

>> right. correct. >> what's a number that we should keep in our heads about where you think crude oil could trade to? is it coming out of that range? >> no. we're coming out for sure. we're breaking out 70 to 90 -- >> one way or the other or -- >> i think probably both. i think next year every wall street firm is bearish oil. with that being said, the index funds are going to be long, bloomberg and commodity index funds and the way the market goes up is what happened the past couple of days ago. the market rallied $4 on the iran news. that happened because no one's long. everybody is bearish next year. they think crude is going 60, 50.

>> are they thinking naturally oil is getting there? >> it's all convoluted in my opinion. i think next year you're going to see the price is above 90 bucks next year. >> if i believe that, where do i want to invest most to take advantage of that? what part of the energy spectrum plays that the best? >> well, first of all, to me being long, heating oil versus crude, distill late versus crud. hurricane season, who knows what happens here. the lay-up trade eventually sooner rather than later, there's a cease-fire in gaza. you wait 24 hours, 48 hours, who's going to pay for the

reconstruction? it's going to be the oil consumer. so my opinion, that will be the tipping point. >> talk to him. the sector in general is they're bullet proof. that only helps them in a convoluted way. this is going to la nina. you know what i'm doing with the whole hurricane nonsense in florida, all the products we're doing. >> can you talk about -- you didn't go specific on it, but the usage of ai to trade like

you suggested you are. you're a firm designing what sounded like proprietary ai models to help you trade, is that what the future of certainly day trading is going to lock like? you use interday trading -- >> that's not just the future. the world has just woken up to it. every day we learn something new, right? but that whole learning -- learning curve and learning from past price performances and price charts, that's been going on forever. >> is it a universal application to all commodities or just specific to oil? >> we only apply it to energy. if we're applying it to energy, people are applying it to grains, we don't have the expertise. >> i feel like ai models can never take into account moves in the economy, geopolitical

flare-ups around the world. so how do you factor all that in? >> well, that's where the human element comes in. i think the ai models are going to get commoditized. if you don't have some of the brain saying, this is ridiculous, they're not going to work. you are still going to need the man behind the springs to look at the information. everyone is going to eat everyone else's lunch. you bought exxon. that's new in the etf. you sold a handful of names including marathon petroleum. >> yeah. the headline is -- well, we kept in terms of refiners, i mentioned phillips 66 and valero. the headline is the energy exposure came down, and it should have come down. the energy exposure was cut in half from 10.5% to 5.5%.

energy is around 3.3%. we're still above the benchmark on the s&p, but given what we've witnessed with a tight range in energy, there's really not very much there in terms of momentum that you could capture. the one area that i did see is the excitement surrounding acquisitions, and there has been a lot of consolidation. there's been a lot of acquisitions that have happened in the energy space. mark is talking about a 2025 with an oil price above $90 for the viewers, i think that's the real tailwind trying to identify the targets. you can see a lot more activity in that direction. >> leave it there. good to see you guys. fish, good to see you here. joe, thanks for hanging around. up next, trading in turbulence today. citi's lucy baldwin is back. she'll tell us how she's d vigating today's big selloff anthe areas of the market where she sees big opportunities ahead just after the break.

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welcome back. stocks giving back their post powell pop today on the heels of weak data. a possible september rate cut against the risk of a greater economic slowdown. joining me is lucy baldwin, head of citi research. >> hi, scott. great to be back. >> is that what this is about today, now we're worried about the economy slowing down too much and the fed being too late? >> well, you're right, scott. we've had quite the week,

haven't we, for the u.s. markets to digest. in terms of what we've learned this week from the echo i'm seeing from powell is a massive focus on the softening of the market. we came into the year with most people expecting 6 or 7 rate cuts and then obviously only a few months ago most people saw we're not going to see that magnitude of rate cuts. our view has been for a long time that you're going to see the softening come through in the labor market and i think we are now finally really seeing that rhetoric bear out and obviously powell very much focused on those asymmetric risks to the down side. i think the way unemployment has obviously crept up from 3.5 to 4.1% it's crept up in a pattern that often precedes a more meaningful downturn. that has a lot of people quite nervous. i also think right now we can kind of finally say we've probably won this war on

inflation, right? some of the stickiest areas where you've really struggled to bring inflation down. areas like shelter. that looks like it's finally under control so the fed can finally focus its attention on actually looking at this labor market and an awful lot of detail. it's an awful lot for the market to digest. >> i think people may agree with you that the fed may have won the war on inflation and i think they would believe that at this point, but the collateral damage, of course, is what have they done to the rest of the economy and to the consumer and the long and variable lags that were really longer and really

variable perhaps much longer and more so than people expected them to be but that they're finally showing up and that history is going to at least rhyme and that the fed always sort of does what -- when they start cutting rates, it's always too late like they were too late when they started hiking. then it's just going to be too late to get out of that mess. >> i think you may see a mild technical recession, right? we're very constructive still actually in aggregate on equity markets. i'll tell you a little bit about why that is and why we're not saying this is going to be a major, major downturn here. when you look at the shape of earnings we're seeing so far, obviously the u.s. is fairing significantly better than europe. a number of companies are coming out and beating and holding their guidance. when we came into the third quarter we are hearing from the s&p that you would get to a 5600 target at the end of the year. we were saying buy the bullbacks

but it was very selectively risk on. you should hold on to your large cap, max 7, and you should be adding selectively some of the interest rate exposed areas, whether that's banks, whether that's real estate, whether it's parts of consumer. you're right. the big test is how well the consumer can hold on. if you listen to the rhetoric from powell and the fmoc, the 50 basis point cuts will be looking with a focus. we're going to get the 325 cuts starting in september. i think there is that risk if they need to do more, they will do more to try and ensure as close to a soft landing as we can possibly get. >> you make the argument the small trade has legs. if there are questions about the durability, how is that going to work? >> you're right.

it is very much a trade. when you think about where we've come from this year, if you look at the first half performance of the s&p, 1/3 is one very large megacap chip design. the other make up 15% performance and the other third is the other 493 names. it's this thesis we've had and others have had that you should not see this moving out when you saw the nasdaq under performing. it's quite extraordinary. can that continue? as you say, we need a trade that makes some sense. you have to look at the long term. if you go back over 80 years there is only one time in history where small cap has outlasted large cap. if you look at large cap

earnings. they have been significantly more resilient during periods of pull back as well as overall growth.would argue they are fundamentally more structural. although we would say yes e valuation has become unbelievably stretched and they look incredibly cheap in aggregate, we would tread pretty carefully and we would view it as a trade to take advantage of the fact that we likely see the trade caps coming through and the narrative and people get confidence that the fed is going to manage to land this plane in a soft fashion, scott. >> okay. we'll talk to you soon. lucy, thank you. lucy baldwin of citi. up next, tracking the biggest

movers. shares of eli lilly dropping and hims & hers dropping. we're heading towards the close. looks like it's going to be a little bit of a nasty one, too. "closing bell" is coming right back.

lilly sharing information about their weight loss drug. the ceo david ricks saying zepbound should come off the fda shortage list soon. hims & hers said they will start sending the compounded versions of novo's wegovy. a lilly spokesperson said ultimately the fda will decide when to update the shortage list. we'll let you know when we learn more. thank you. >> amazon and intel reporting at

the top of the hour. we are less than an hour away from apple's results. we'll let you know a othllf e key themes you need to know from those key names. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free. we're now in the closing bell market zone. bob pizani here to break down the crucial moments of the trading day. plus, we're just moments away from three key earnings. pippa and kate rooney. alex gets us ready for apple. what a reversal from yesterday. good feeling about rate cuts coming seems to be gone. >> yeah. we talked about this yesterday

after the fed meeting. there's two macro risks for august and september. one is an inflation scare where the data suddenly comes m a lot hotter than expected. that seems a little bit unlikely. we seem to be moving in the right direction. the other one is a growth slowdown, jobs slow down. this is exactly what happened today. we got the ism numbers, usually fairly routine. the employment component was sub par. that ticked up the concerns about employment slowing down faster than we were anticipating. boom, you saw the yields. straight down. 10-year yield straight down. that was a shock to the market. >> bad news is bad news. at least it's being taken that way today. >> yeah. >> that's the story. >> rates are moving down. it may accelerate or it may increase the amount of rate cuts we're seeing. nonetheless, generally lower

rates are good, for example, for small cap stocks. however, if there's a higher unemployment situation, that's not necessarily good. this gets a little bit more complicated. you can throw in uncertainty. the food companies are clearly getting push back on numbers, on price hikes. mcdonald's is getting push back. >> shake shack's not getting any pushback. did you see that stock? >> it's not like it's the only one. you can throw up an interday of shack. >> the utilities and reits are up. it's not a complete disaster. when we get these numbers a little bit further away from what we had anticipated, it changes the narrative a little, the soft landing idea. slowing the economy down but not too much. when you get a number like the employment number of the ism way, way below expectations,

then everybody says, ah, this narrative has to change. >> yeah, it's showing up in the market. pippa stevens with the setup on intel. what do we expect? >> intel down 40% as the company fails to convince the street that the turn around is in place. the company previously initiated weak guidance. analysts expect intel to earn 10 cents per share in q2. wedbush said much of the growth is in cloud where amd is better positioned than intel adding the intel competitor is taking share in cloud and enterprise. the guidance here is going to be important with some analysts calling for a back half recovery with updates around the execution of its fab strategy also top of mind, including expenses after pushing back construction at the 20 billion ohio chip fad. ahead of the report bernstein's

stacy rascon saying, quote, the ai story still feels mostly mia. those shares, scott, down 10%. >> to kate rooney now on one of the biggies. amazon. >> scott, so amazon's cloud business aws is going to be the big priority. they're watching the higher margin side. growth in aws expected to be 17.6%. that is the bar. the number to beat. cap exanother big area to watch. like other areas, amazon is going to need to this read this needle on spending when it comes to ai. they want to see evidence that the company can monetize ai. amazon is known for the cash burning cycles. we've seen this before. a couple years ago they went big on faster shipping. that has resulted in better unit economics. they have given amazon a bit of a hall pass and they can return the capitol. ecommerce, investors are looking at north american margins. that's key to the profitability.

you have the ad business that's been a big part of the bull case. >> kate rooney, we'll see you in o.t. alex from big tech technologies is here. apple, still waiting on that. some suggest it's not that big this quarter because you will only get so much info on where iphone demand is. how do you see it? >> i think it is important. you will see how they expect the iphone 16 to sell. i think that's important. by the way, it's underscored by the fact we've been hearing for so long about apple intelligence. that is meaningful. when we get that guidance, that matters. >> what about those reports that were out in the last handful of days suggesting that some of that ai components are going to be delayed a little later than expected. any validity to that in your

mind? does it matter? >> i think there is validity to it. i have apple intelligence installed on my phone, the developer version, beta. this is not like think about the dynamic island. they put something in the phone. it's a shiny thing they show off. you will see information live on the top of your device and you should go and upgrade because it will be there on the next iteration. this thing is going to come over time. it's a software update above all else. it doesn't have to show up on the day the next device happens. >> from what you've seen so far, now i'm going to put you on the spot since you said you had it early. >> okay. >> does what you have seen so far gets you excited about what consumers will see? >> i need a caveat first saying you can't get excited based off on what i've been using. i'll answer your question.

the features in there right now just aren't what they need to be to say this is our big unveil. the series is still dumb. i tried to use the voice recording where you get the notes transcribed on to your phone. it didn't work. apple has a lot of work to do between now and the fall to expect this to get to maturity. >> it's going to be 18.1 i think that apple intelligence is going to come. i i'm with you. i'm excited. if apple can figure out how to keep the data resident on the phone and you have a personal digital assistant that has some security guarantees on it, this will change people's lives. this is bob 2.0. it will be your personal friend sitting there. that sort of cracks open the entire ecosystem for that. >> i'm running out of time. real quick. do we need to know tonight china has bottomed or is bottoming? >> it's very important. what's going on with the iphone. it's going to go down. then you turn the story around

on china. the this is the moment where we go looking for it to turn around. we need to hear that. >> they delivered. got a lot coming up in "overtime." alex and bob, thank you. have a lovely day on the street. different story from 24 hours ago when i left here. see what happens tonight. i'll see you tomorrow in "overtime." that's the end of regulation. dynatree is ringing the bell. stocks getting slammed on the first day of august. the nasdaq and small caps falling the most. treasury yields tumbling to multi-month lows all with fears as an economic scorecard slows down. boy, is it. welcome to "closing bell" overtime. i'm morgan brennan with jon fortt. >> investors will get a look inside the health of their businesses. apple an