go back and look at the prior earnings calls and see who announced big buybacks look at those companies in the next couple weeks. the window is open and price down, apple down 10% >> that does it for us "the exchange" begins now. >> thank you, scott. we will pick it up from here welcome to "the exchange "i'm kelly evans a major selloff. china has retaliated against the u.s. with terror hikes and boycott threats. the nasdaq is having its worst day of the year. the dow and s&p pretty much the same their worst day since january 3rd. at the lows, we're actually sitting at them right now. down nearly 700 points right now. continued to sell-off throughout the session today. the result of that, the small cap russell 2000 and dow transports are both back in correction the volatility gauge jumping and now over 21.

let's get straight into all the action right now bob pisani is over at the new york stock exchange and kayla is in washington with the latest on this trade war let's start with you >> kelly, the white house and the u.s. trade representative and the u.s. treasury have yet to weigh in on this escalating selloff. secretary mnuchin is about to speak to an insurance audience in 30 minutes time and we'll bring that to you if there's news the official line comes from president trump on twitter on the defensive as the market reacts to this escalation. reposting tweets from earlier this morning stating that u.s. firms can avoid tariffs by making product here there will be no one left in china to do business with and china will not retaliate and get worse. china said it would introduce new tariffs on june 1st targetinging ing agricultural p. saying, quote, the sentiment out in farm country is getting grimmer by the day our patience is waning and our finances are suffering and the

stress from months of living with the consequences of these tariffs is mounting. soybean farmers say they are done with being collateral damage in this trade war kelly? >> and, kayla, even as you are reporting the dow is down more than 700 points. you mentioned soybeans and how hard they are hit. the list of tariffs that china is targeting includes agric agricultural products. do you think that is an intent to hurt the president's base >> i do. i think it is also an intent to perhaps exact how much pain as possible because part of what the deal itself is going to do is it's going to see china make some pretty vast agricultural purchases and also change the mix of some of the products that it was putting tariffs on to exclude gricultural products so, it knows from the course of the negotiations that the administration cares deeply about how the pharma community is feeling and reeling over the last year financially from the

fallout from this and china knows from its conversations with the u.s. that that is an area where it can exact the most pain >> one more inside baseball question for you i was struck and we know larry kudlow so well when he's asked and point blank, look, won't these tariffs hurt the u.s. and china he has to say, yes, they will. at the same time, does the president really believe it's china who will ultimately bear the immediate cost of this >> i asked one of the former white house trade negotiators this question on friday. he said he believes that the president understands how these tariffs work but he also knows how to drive his political message home and the president is trying to say politically that china is paying these larry kudlow tried to defend that by saying china will indirectly pay by taking a gdp hit and economic strength hit from this. >> kayla, thanks very much we'll check back in with you soon let's go down to bob pisani.

a 700-point selloff on the dow this afternoon. >> it's getting tough here and the problem overall is it's getting real so, notice last week what happened take a look at the s&p 500 the low print was almost at or near the open last week. but that's not happening today we opened and we stayed down no attempt to rally at all today because today the trade wars have become much more real we not only have higher tariffs on existing goods and a very specific china response targeting u.s. alricaltural products and talk of expanding tariff to all china imports, which would be particularly hard on the technology field. that's one reason apple is down 5% today but for many companies, there is already considerable damage. not just everything is down 2% today. take a look at these big names associated with global trade, intel, boeing, caterpillar, 3m, apple. all down 20% or more from their 52-week highs. by the way, kelly, i would note. retailers today expanding new

high lists retailers getting hit because their input are about to rise. they're the ones paying for tariffs. >> bob, thanks very much bob pisani at the new york stock exchange are we in a full-blown trade war with china how much damage are we talking about to the u.s. and chinese economies? joining me now is john rutledge chief investment officer and kenny is managing office and both are cnbc contributors and mike and steve liesman are here with us. john, i'll kick it off with you. hard to see the glass half full here are we in a trade war? >> i think we're beyond a trade war. we have been in a trade war for the last year and a half now we're now moving into more conflict and more fights with china. this is, call it neocon and call it china hawks if you want, but this is not about chinese reneging on a trade deal the last week, this is the hawks

taking control and pushing the trade war off the edge of the table. this is not going to go away. >> john, it sounds like the hawks are taking control on both sides. from the reporting about what happened with this deal over the past week or so, china is not agreeing to anything that sounds like, hey, we might have done some wrongdoing in the past on intellectual property and willing to trade that. sounds like, no, we're not going to do that at all. >> the idea that you could change entire, china's entire economic system the way they manage state-owned companies and the way they manage their technology policy or their industrial policy in the course of a trade discussion is just nuts and it was nuts, it was nuts in the beginning. it's nuts now. you cannot, i advise our own group that you will not succeed in getting china to turn itself inside out for you and not become china any more.

and you will not be able to walk around on the ground inside china and do checks on whatever you agree to >> no enforcement. all right, kenny, that leaves us now. frankly, the trading action on friday was interesting because it was muted at the start even as the tariffs went into effect and there seemed to be this hope that there is still going to be progress in these talks and the weekend dash and then, of course, the retaliatory tariffs made the outlook look even worse. >> they made it feel like that onfriday afternoon still progress and talks were still open and chinese had come to the table, blah, blah they made it appear that way they let the market close on the highs and then trump came out on sunday and made that surprise announcement that caught everyone off guard a repeat performance this weekend with, you know, they let it go until friday and let the market come under some pressure and then they slammed it why everyone is so surprised, we knew this was going top haen we knew china was going to come

with all guns ablazing >> the commentary we heard in the markets for a month or two now has been, look, there's positive commentary between both sides. we are heading towards a deal. we see one emerging. remember the reporting even about how the delegation is still coming and the closer is still part of it why has this changed so dramatically in the past weekend and is it really over? >> i do think what you're seeing today is the market going from treating this as some event to brace for which was the tariff deadline on friday to a realization that trade friction on some level is going to remain for some indefinite period of time that doesn't mean the only reason stocks are being sold today. that was the trigger point that got people nervous got volatility out there by the way, struck the market at a moment when i think investors were feeling very complacent among several fronts great unemployment numbers in the u.s. andic loos like we're getting a trade deal the fed is our friend, again

it essentially disturbed that whole outlook that things were moving in a positive direction when the market goes here and everyone realizes, guess what, i own too many stocks and i have to sell some >> steve, this weekend some commentary about the impact to the u.s. economy from the tariffs. you had strategics on the one hand saying the round of hikes from friday half point off gdp and goldman sachs put out a note to say they took a closer look at the impact of the tariffs so far and they have fallen completely on the u.s. and worse than they previously anticipated. >> the president's take and the foreign countries are paying this look, kelly, before we came on i wrote all the things affected by the tariffs and could be on the market's mind. global and u.s. growth u.s. stock earnings. ceo confidence, capital spending, retail high tech agric agriculture. that's like seven or eight things 100 points for each one of those things off on the dow. mike might be right, other stuff going on here.

another thing that i think matters a lot. which is each time we've got to the brink on this issue, mnuchin, kudlow and the president come forward and say, they're constructed. i am concerned at this point we're without a net in what happens in the sense if they say, we're back on the market reverses but at some point you cried wolf too many times and the president and the treasury secretary lacked the ability to reverse things and confidence in the markets. >> to what you were saying earlier, we should have no and be able to enforce any kind of deal that really involves that so, what are we even talking about? what options are left? if the u.s. wants to take a hard line with china, this goes back to the argument, do we do sanctions on firms for bad behavior do we try export controls and literally bar u.s. companies from doing business over there what are our options >> a whole series of things that were already agreed in these

negotiations all the way from opening markets to buying a bunch of u.s. stuff and a new intellectual property law in china and a new regulation in china and finding political guys for aiding ip theft and a huge support group inside china that wants to protect ip there was great progress made on those ground >> john, i want to come in on that issue because one of the fictions from the trump administration is that nothing that we did before worked. that is patently false. >> you mean in previous administrations. >> in previous administrations it is, by definition, not true that everybody before the president was an idiot and he's the only smart guy there were things that worked. for example, remember we worked very hard on getting the chinese, that had a big effect look, it wasn't perfect. we had cases in the wto. we won 95% of our cases there as

do most people who bring cases there. that worked. it did not work for intellectual property or other things the idea that everything we did before it didn't work and that this is the only way to do it is a fiction. >> but if it didn't work for interlectual property, john, go ahead and respond. >> the reason guys are changing their minds that it is more difficult for the u.s., i have a chart here of the dollar and rnb for you that basically shows when trump imposed his first 10% tariffs a year and a half ago, the rnb fell against the dollar by about 11% you know what that means that means chinese good in america is 11 plus 11 equals 22%, more expensive. there's no more expensive at all. that's why you have a bigger trade deficit. >> they weakened it overnight. mike, that's one of the things in the, market today that has been gaining some notice

editor tweeted that china may stop buying u.s. treasuries. i would say good luck weakening your currency unless you're trying to crash your economy >> the market response to that was basically a shrug because they don't think it's a plausible threat china holds a smaller proportion of u.s. debt than they used to our debt has gone up so much it doesn't seem as if it is really much of a secret weapon that china might have to deploy. also, as you mentioned, self-defeating on a lot of levels that's why i wonder if we're bracing for this staticy relationship and the market will reset to a level that accounts for it and this year's and next year's earnings and at some point look at stock versus bond yields stocks look okay here just like they did after brexit or other big shot movements >> ten years back below 2.4% and some companies hit really hard in the session are the abcs that

we talk about apple down 5.5% and boeing down 5% they might stop buying boeing planes >> that headline along with the treasury headline was just enough to insight kind of this action that you're seeing today. a lot of it is bluster especially on the u.s. treasury side more negativety that will add already to a negative thing. in this action, value created in some of these names. long-term investor, you need to pay attention where that value is being created >> people need to understand, the impact of tariffs on one part of the semi conductor space be different from the other and all being sold >> different sectors, right? the trade negotiation is not going to affect every sector so, you're going to see everything is going to get slammed but that is going to create opportunity for some sectors. >> steve, one other narrative that is quickly coming out of this is the fed and rate cuts. if it is true it will slow the economy, does that make the case for a more dubbish fed in one way or another here? >> it would.

very difficult call for the central bank to respond to fiscal policy in this regard i mean, you could get an agreement tomorrow right. if they wanted to come through and take this off the table, they could do it how do you set monetary policy with long and variable lags to something that could go away or do you settle in for the long haul on this trade war and start banking on the negative long-term consequences >> so, you're saying, look, they don't want to pull any about face >> they don't want to do it for this reason. but they may and you're right about the direction. everybody agrees ultimately, this is a deflationary impulse through the economy. >> they signaled already >> the fed it's ironic. a deflationary impulse oh, wait a minute, we have products the price is going up 25%. >> i know we have to go but what happens is it is a tax and then you raise the price level one time and if you don't put another 25% tariff on next year, you don't have the rate of

growth continuing. now, be careful. >> at this point, it could happen >> washing machines, whirlpool raised the price of driers could be an excuse to raise prices but it is a single-time rise in the price. >> john, we'll give you the last word here. >> watch out for big events that come out of china. not because of the tariffs, but because there is $2 trillion worth of dollar debt in china held by corporations and a rising dollar and firm u.s. interest rates caused great damage also an enormous pool of chinese stock that is pledged as collateral to banks for bank loans for those same companies if you push the chinese market down far enough, you wind that thing down and forcing a credit crisis in china. >> can't the chinese get in there and buy up their own stocks as they have been known to do? >> they have been doing that like crazy since last november but we're talking about massive,

massive amounts of money here pledged as collateral. >> all right those are some areas to watch. guys, thank you, all appreciate it. coming up, apple is getting slammed as china retaliates with its own tariff hikes that stock is down 11% in just over a week. an overreaction or just the beginning. a tariff is not the only way china can fight back many other measures they could take as we head to break, a look at the worst performers in the s&p today. mylan and microchip chlo 'rba itwo.nogy uh-oh, looks like someone's still nervous about buying a new house. is it that obvious? yes it is. you know, maybe you'd worry less if you got geico to help with your homeowners insurance. i didn't know geico could helps with homeowners insurance. yep, they've been doing it for years. what are you doing? big steve? thanks, man.

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simple, easy, awesome. go to xfinity.com/moving to get started. welcome back to "the exchange." want to show you some movers right now with the dow down 706 points srt is hitting session lows and on pace for its worst day since may 2016 you heard bob pisani earlier say the concern by investors is that their costs are going up you can see the retail sector taking a hit the semiconductors, too. smh on pace for its worst day since january 3rd and lam research among the worst speaking of tech, shares of apple are down big again today the worst performer on the dow this stock is now down 12% since

president trump tweeted about hiking tariffs apple down nearly 6% on the session. sales were 16% of their revenue in the first half of the year. what happens to apple now? joining me is john ford along with bernstein senior research analyst tony i'll begin with you, how much of a hit is apple going to take here with these tariff hikes >> well, kelly, i think apple has no choice. if ultimately tariffs get placed on additional goods. the tariffs today did not impact apple incrementally. very modest tariffs. but the fear is two-fold one is that you have tariffs placed on the remainder of chinese imports and apple, 85% of what apple says basically comes from china so, you have a third of the business that would be impacted. times 85%. probably 25% would be impacted by tariffs and apple would very

likely have to pass that price along to consumers and you'd likely have negative demand elasticity >> they could just absorb it in their market margin if it's a one-time issue. >> i ink tthink it's highly unly you can't absorb without material materially impacting products. the elasticity not being as detrimental. the other thing, kelly, that is really significant is what kind of retribution china might plac on american companies, particularly, you know, well-known companies like apple. so, you know, we've seen china in the past shut down itunes, movies and books we've seen china delay the iphone 6 it was a month delayed in its release in china we'veseen the company undermin hewlett-packard notebook business in 2010 so, there are many ways that,

you know, apple or other prominent u.s. companies could be undermined in china >> yeah. >> and that retribution is really sigsignificant. >> maybe a 12% repricing does make sense especially if the stock is near all-time highs. >> more than 12% makes sense apple is in a vice here. the move that we've seen thus far makes sense based on what tim cook said on the earnings call things were looking better in china, especially since the trade talks were going well and then the stock went up from there. now, they don't look so good the stock has gone back to the level where it was before where people were worried about just how bad things were going. if we get the tariffs on additional goods, well, then you've got this iphone price issue here in the u.s. if you haven't seen before like tony said, they're kind of in an inest theteresting spot yes, they could absorb -- >> the new iphone which is only

a small sliver of what they were selling was already priced out of reach for the consumer. look, we couldn't raise this any more >> doing the trump administration a huge favor because no where on the impact of tariffs show up more than in the price of iphones everybody knows an iphone 900 bucks depending on which model you get. if they hid that from the consumer and allowed kind of the idea that the chinese are paying this tariff and not the u.s. consumer was going into an apple store trying to get a phone. >> or if so many people would realize the stock price is down and, again, i take your point. you think they would go the other route. anecdotally go pro said it would try to relocate its supply chain for u.s. products to mexico out of china we've seen a number of companies now trying to do the same thing. apple can't do that, can they? their supply chain in china seems to be and even from the issues it had in india is extremely difficult to relocate.

>> yes i mean, apple's challenges that there is more than a million employees in china working on the iphone alone in terms of its supply chain and manufacturing and, so, it's not only the manufacturing which is done there. it's the entire supply chain from a logistics perspective is all built around china the ability to do a relocation would take, you know, years and years. it's not something that they can tactically turn a knob and make happen they are in a tough situation and i think apple executives in the past have acknowledged it would be, "a," very difficult to relocate the supply chain. and, "b," if faced with tariffs, they would pass them along. >> finally, toni, how much would that increase the price of a $1,000 iphone if they passed it along? >> depends if the tariff gets set at 10% or 25%. 10% tariff $100 if it's 25% $250

increase in price. at a time where john alluded to, you know, increasing sensitivity to the price of iphones. >> all right guys, thanks very much toni, john, really appreciate it coming up, as the u.s. and china battle it out on the trade front. who is better positioned in the long run a look at what each country can still do to turn up the pressure like we were just discussing and what that could do to the market as we head to break, here's a look at the dow 30 all 30 stocks in the red apple, caterpillar and boeing seeing the biggest losses. we're back in two. this is my headquarters.

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visit your online broker today, to learn more. welcome back to "the exchange." one of the worst selloffs we've seen in quite some time. the dow lower by 705 and down 719 at the lows. the s&p is down more than 76 points 2.5% drop. the nasdaq down 3.5% or more than 270, almost 280 points right now. check out some of the pharmaceutical stocks. teva is taking the biggest hit following the "60 minutes" report and mylan and novartis were named in that report. now, over to sue herera for an update >> here is what is happening at this hour. secretary of state mike pompeo

departing after talks in brusal with union ministers the eu issic looi ilooking for keep it alive. delayed his visit to russia to attend that meeting. saudi arabia says two of its oil tankers were sabotaged off the coast of the united arab emirates they suffered significant damage one was en route to the united states no word on who is responsible. felicity huffman arriving in a boston court where she will plead guilty to taking part in the college admission bribery scandal. the highest profile person so far to admit to the allegations. and confirmed cases of the measles continue to rise new cdc data shows 839 cases in 23 states as of last friday. that is an increase of 75 cases just from the week before. you are up to date

that's the news update kelly, back over to you. >> sue, thank you very much. just about 30 minutes to go to "power lurc er lunch" and i'e with melissa lee we have been dropping throughout the day. just keeps getting worse >> we have to watch the abcs, we're down more than 700 points. apple, boeing, caterpillar the poster children of the so-called trade war. we have to see how much damage they endure by the end of the session. don't ignore the s&p 500 key level 2,800 and gone to 2801 and you have to take a look. the s&p 500, watch "fast money" you know what i'm talking about. microsoft, apple, google, alphabet two stocks in correction territory and one in bear market territory and apple down >> nasdaq down 3.5%. granted, we are coming off all-time highs but add up today with last week and this is one of the steepest. >> this is a lot of damage

the next two hours are going to be huge. >> exactly we'll see you at the top of the hour for that, melissa >> dow down and could a bigger drop be around the corner? our next guest says china isn't done dealing the blows as we head to break, here's a look at the sectors of the s&p. look at those utilities. everyone else deeply in the red. we're back in two.ly awa help you with that. t firstn jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

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welcome back the dow is down 70 points and the s&p and nasdaq having the worst day of the year after china raised tariffs on $60 billion worth of american goods. china may have started there, but not the only weapon in the arsenal. our own eamon is with us is this selloff warranted? >> i think there is a risk off here the market pricing in that we will get a china trade deal. kelly, i believe what was written in that text would surprise to the upside with structural reforms and better access for u.s. companies and

not only are you not getting that, you're actually seeing quite the opposite here where you could start to see retaliation coming into effect on both sides that will hurt both countries and really we're just at the first step here. china is being very methodical about what they're releasing and they're going to be very methodical as we go deeper and deeper in if there's no resolution i think you'll start to see many of these sanctions ramp up >> let me quickly break in here with kayla who has just heard from treasury secretary mnuchin. >> the treasury secretary has scheduled remarks to the national association of insurance commissioners and cnbc caught up with him on his way into those remarks and i want to play that for you right now. >> are talks still ongoing >> yes, we are still in negotiations >> so, he says talks are still ongoing. he said he was asked whether china would continue to buy u.s. debt he said, i assume so a great investment saying no further rounds that

are planned and confirmed at this point but that talks are ongoing kelly? >> kayla, has it been confirmed that trump and xi will meet at the g20? >> that's the expectation. we're told president trump has not confirmed his taattendance the g20 while president xi has that could happen at the last minute but as of yet, we have not had a formal rsvp by president trump to the g20 there's about a month and a half before then and quite a big gap to fill between now and then so, several subsequent rounds would probably need to happen in that space >> kayla, thanks very much dow down still about 675 point eamon not a lot of comments. we're still in negotiations, which just shows how low the expectations have gotten, i guess. >> not a lot of reaction there,

kelly. not a lot of reaction at the white house either no statement officially from the white house since we saw that chinese retaliation move earlier this morning east coast time and you saw producer chasten mnuchin down the hallway didn't have that much to say either we may be hearing from the president here at the top of 2:00 eastern the president has a meeting here with the hungarian prime minister and there will be cameras in the room and reporters in the room and you can be sure they will ask him about this we'll see what the president has to say then. but a very muted reaction from this white house over the past couple of hours since the president's tweet storm of this morning leading up to the chinese retaliatory action and now, we may see what the president has to say in just about a half hour's time >> in the meantime, dan, let's talk about the other reactions he said china had made it difficult for consumers to buy hp laptops in 2010 there have been other ways that they needed to put pressure on the u.s. what are some of the obvious or

potential things you think could come >> kelly, i think it's important for viewers to know that china can't put as many tariffs on us as we can put on them base on how much we input. they have to move to nontariff barriers the first move we're seeing currency devaluation that allows them to absorb those tariffs better than they normally would they did this last time and it already starts to reduce the purchasing power more safety inspections at the border and the slowing down of u.s. goods being able to get into the country three, they continue to raise tariffs. four, people are talking about treasuries i think that that is a nuclear option they would have to take that asset and put it into a different risk asset and you're going to hear more and more about it whatever they choose to put it in, it will have to be riskier i also think that they're going to give our financial companies a hard time. they're going to threaten to revoke the licenses of those companies. and then, if you look at materials that we need that we

need that they export, they could put export band on those goods like rare earth minerals and we have an important company in nevada that is doing work on that very important to our national security you have to remember, every action they do may hurt the u.s., but it also hurts them so, that is why they're being very strategic they're trying to minimize the impact and it will be on a case-by-case basis and sometimes they're not going to announce it >> it is amazing how quickly as you said, dan, as much as anybody have gone from saying this is a good deal. people will be surprised to the upside to saying it could get a lot worse. thank you, both. appreciate it. eamon, we'll see you soon. shares of uber are falling in the second day of trade uber is down under 11% remember it ipo'd at 45. we'll look at what went wrong and what it means for the broader markets next. look at the fang stocks.

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higher expectations. the light beer you've been waiting for has arrived. corona premier. markets today staging a huge selloff on trade worries the dow down 604 points and the s&p lost almost $1.2 trillion in market cap over a trillion dollars in market cap since may 3rd let's get to bob pisani on the floor with the big movers. bob? >> we were about to break 2800 about ten minutes ago. put up the s&p 500 and magic words happen we're working on talks governor mnuchin said he's working on going to china for more trade talks and we went from 2802 to 2813. you see the market still reacts to those kind of comments. the usual big trade-related names and industrial-type names

are all weak today deere, illinois tool, best buy apple was 212 and we're down 11% on apple in the last two weeks i also want to point out names that don't have a lot to do with china. i keep putting up some of the same names that they don't have direct china exposure like colgate or kraft-heinz and all down 2%, 3% and they are down because global growth expectation comes down and that affects everybody. new lows out there retailers who are importing a lot of stuff they're sitting there. new lows in some of the big names as you can see there guys, back to you. >> thanks very much. shares of uber are also down big today in just their second day of trading the stock is down 11% right now after it fell 8% on its debut on friday following uber through this ipo. leslie, was dohat does today tes

and what do they blame on market conditions >> i think they're trying to blame it on market conditions. they did not come out in the best of times. that said, this is far surpassing what we are seeing in the overall markets. a company like uber is very, very difficult to value because they've got negative free cash flow and operating losses in the billions so investors had a really hard time throughout this process coming up with evaluations they were comfortable with now, it's the job of the bankers to be in constant contact with the capital markets to assess where that right price will be, so, you don't have a situation like this. so, clearly, at the end of the day, i think both from a sentiment standpoint and a pricing standpoint, you have a deal that just didn't come out the way that anyone was hoping for. >> absolutely. i guess the ceo was telling staff earlier, all right this wasn't exactly the way we wanted it to go but facebook stumbled at its early open and so forth i was looking at it this morning as we were watching futures fall

and sometimes wondering which was the tail and which was the dog. the chinese talks are more important, but it does seem like a marquis name like uber following and not really doing anything for the public markets to get excited about couldn't help >> remember, this is a huge year for ipos uber was the most anticipated. what leslie was talking about, is this a market problem or a ride-sharing problem you see major divergence in the performance between the enterprise cloud companies like zoom and the uber and lyfts on the other hand the ceo is trying to paint this as a market problem. we got a hold of that e-mail that he said, obviously, our stock did not trade as well as we had hoped post ipo. today is another tough day in the market and i expect the same as it relates to our stock and goes on to say that amazon and facebook have rough trading days this is a different kind of company that we haven't seen before as leslie was saying, investors

are trying to figure out how to understand these companies how to value them and you have this since yesterday and went ahead and said that he's going to try to lift shares on june 20th but you have to wonder if the market conditions making their team a little bit more nervous than they might have been a week agoe. >> what is the practical impact? a lot of employees can't sell for six months the insiders who have shares does this make it harder for uber to attract talent under water on the options they were granted >> it could make employees worry about some of the high-flying private companies that have yet to go public and major form of compensation in a place like san francisco when the cost of living is so high. is what you're going to get when you cash in and these companies finally go public and that could make it hard for them to retain talent >> leslie, that's all you need to know. not about the ipo pipeline

i think as long as that one is in the green thank you, both. appreciate it. soybean futures are hitting their lowest level since december 2008. we are talking about a decade low for one of america's important exports. why china has struck back with tariffs of its own is there more pain ahead as trade tensions continue to boil? that's next. take a look at shares of the banks today. morgan stanley, citi, zions, nkf era and regions all down we'll be right back. your in decision time... s you need decision tech. only from fidelity.

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so you can focus on streaming your favorites. not finding a signal. make the best wifi even better,with xfi advantage. simple, easy, awesome. welcome back it's an ugly session out there but the nasdaq is the worst performer. it's down more than 3% to have its biggest one-day decline of the year. bertha coombs is over there watching the big movers for us >> chips leading us south. a number of new lows today a lot of them are apple suppliers, apple having the worst day since january 3rd on those concerns about chinese tariffs and imports but also getting a big drag today from myelin pharmaceuticals, one of more than nearly 2 dozen pharmaceuticals in a price fixing scheme for generic drugs sued by the federal government that is taking its toll with the

bear market territories. a few highs though excel energy, no surprise here it is not in the tech space but one of the recent ipos in biotech. hitting a new high and match so i guess folks are swiping right on love, kelly >> they need a respite from these trying times thank you, bertha coombs these trade fears are really rallying wall street down 650 points and anxieties high in america's heartland for a long time. soybean futures hit a low, the lowest in over a decade. joining me from the cme, a cnbc contributor. brian, welcome when we see china retaliating, how much of a blow will this be for that industry? >> >> reporter: when you see commodities in general, not just

soybeans, china trade fears here, all of those sort of trade lower here the fear is global demand. is that going to be able to keep up with the supply that's being issued we saw agricultural usda saying supplies are increasing in soybeans that's why you see them traded at basically yearly lows here and some simple areas of swine fever that caused a drop in demand on the soybean product itself but certainly, china trade is going to affect global demand there's a need for lower interest rates got to be somewhere where we can sort of turn this around until that continues, commodities will be affected by that. >> specifically targeting commodities and farmers it seems here and interestingly, sugar and wheat on that list those are not big export markets for the u.s. this is according to a former usda chief economist it's a different story for soybean or copper, as you said, much more a gauge of global economic activity. how do we know what the right level is because everyone is

trying to figure out both what happens with these talks and as you said, what the hit to global growth will be >> reporter: well, i think when you look at something like copper, global growth will be affected by that a lot of what copper trades is basically global gdp demand globally and when we see some fear of weakness there, the zero interest rates in germany and in japan, people are predicting lower interest rates and fed cuts later this year and so rates are going lower to try and stem demand and causing commodity prices to fall like copper wheat and sugar, tariffs put on that we got some information on that, we'll be put on there. that actually is sort of holding it and booing that up here by june 1st, i better buy before the tariffs come on a couple of these products that's why you see wheat and sugar hang in there. those prices might actually be an area to run and hide and buy if you're looking to be a trader in all of this to stay away from

the rest of the other products, soybean and copper, like we mentioned, hit if this trade war continues here but let's just see if we can hold these levels or some sort of federal reserve down the line. sort of buoy these prices here by injecting liquidity in the system that's what it will take otherwise, we need a deal between the u.s. or china. >> weaker dollar will help too not sure if we'll get there with everything going on, but that's a good point that people might be doing some stockpiling. thank you, appreciate your insight. >> thanks. >> one side of the cme to the other and talk more about those interest rates yields on the 2, 5, 10, and 30 year treasuries hitting lowest levels since late march. will the trade war force the fed to raise rates or cut them let's bring in joe lavorgna, a cnbc contributor rick santelli as well. let me start with you and the market action today. if you were worried china would boycott our treasuries, i don't think you'd see below 2.4%.

>> reporter: no, and it is something to consider in terms of boycotting treasuries and i could certainly see china laying back on auctions but in terms of actually selling their inventory, i mean, consider something so simple they have been obviously, treasuries a long time along with the japanese and it has been a marvelous trade if you figure where they were before the credit crisis but you have to look at this from the demand and the supply side. on the demand side, we have flight to safety keeping down on the supply side, doesn't make much sense considering we have issues will china step up will others step up? at the end of the day, most likely, if we start to trade much below 230 in the next several sessions, this could have a very big momentum trade down i personally don't think it will last though. but remember, when you buy big house or a car, you have to look at negotiating both sides of the table. everybody's very nervous here in the u.s., but if you try to put yourself in the role of china.

i think that will give us some objectivity with respect to the notion that this is anything but a simple equation and finally all playing out in the markets chinese and the president's administration, know quite well, you bring a lot of eyeballs when you have days down 700 points. >> exactly certainly puts the pressure on, joe. so look, 2.4% or 3% of the 10 year, do you think that cushions the blow >> no, i think the treasury market is rallying in large part because of weaker growth it was rallying before the trade situation broke down late last week we saw inflation expectations. we saw real yields, kelly, real yields down sharply from last fall the market was discounting software growth and the curb steepened a little bit because the market rightly so is predicting an easier fed, so while china and u.s. trade negotiations are certainly the cause du jour, a lot of weak trends in capex and slowing

anyway, and this was before the trade battle and the fed needs to reverse it. >> now expecting an easier fed so we have tariff hikes which are going to create short-term price pressures and all the speculation is going the other way. i think the prospect of a cut by the end of the year is back in the markets. we've got a 3.2% and maybe the second quarter and the expectation is we kind of just fall off the cliff is it possible it's not going to be as bad as everyone seems to think? >> it's possible same thing happened in late '07. looked really good and things over quite quickly it's possible. dha they have to lift expectations to get inflation higher to ease at some point, it's not yet but somewhere down the line. >> they're in kind of an interesting situation and maybe they can just kind of happily

stay on the sidelines but the pressure on the administration, they've been quiet today we know how the president feels about this and if the goal is to stop from stealing our intellectual property, i haven't heard anything all day to get to that outcome, tariffs or otherwise. what are other options the market should be thinking about? >> you need leverage there's not a lot of ways to get leverage and it will be messy. i guess my final thought is that i think going to look at this much more objectively than the markets. we all know it's not there and occurs in realtime

i think the outcome is a deal, just a question of how ugly it has to be before that deal occurs. >> thank you very much "power lunch" begins right now. kelly, thank you very much we'll see you in just a moment welcome, everybody i'm tyler mathisen along with melissa lee. new at 2:00 this day, it is a sell-off on the street if you haven't noticed. worst day of the year. so how much more pain may be ahead with the president's battle with china taking an unpredictable turn abcs of the dow. what it means for boeing and caterpillar, all three stocks slammed today in this across the board sell-off worst day in more than a year. what's ahe f