rate watch is the home builder stocks lock at what happened two days ago when bond yields and interest rates popped higher the building bond rate dropped it recovered slightly, but affordability is a rising concern with rising rates. sharp swings in rates like we saw monday probably amplified those fears but so far biers seem to be shrugging rates off and focusing on the other positive housing date points we are watching it closely thank you, diana olick that does it for "the exchange," everybody. tyler and "power lunch" pick things up right now? we will see you in just a few minutes. welcome, everybody, to "power lunch. we begin with breaking news on the fed. minutes from the central bank's last meeting, one of the most consequently in years, are being released at this hour. investors will look for details on how policy makers plan to pull back on pandemic era

stimulus plurs we will have reaction, analysis and the impact on see sectors of the economy. >> hi, everybody as we await those minutes let's get a state of play on the markets intel, merck, honeywell some of the biggest gainers in the s&p. in the nasdaq technology weighing heavily as well real estate also one of the areas where we are seeing some declines today again, there is your state of play as we await the fed minutes. the ten-year yield a key focus as well. right now it is hovering around 1.68 -- 1.686%, ty. >> let's get to your fed panel steve liesman will bring us the key numbers and headlines as soon as he gets them diane swank a chief economist aboutw grand thornton. and bob pisani and -- >> diane, let's start with you what is it that we don't know

about the most recent meeting that we could find out today with the result of these minutes? >> the biggest question is exactly how are they looking a the uncertainty wrarld ith rega omicron. jay powell mentioned it in his press conference and how much weight they are putting on warrants continuing to add to rather than subtract from inflation. this is the first variant wave we have had without fiscal stimulus that doesn't mean it won't still muck up supply chain and cause inflation problems but this is a very different kind of wave how much do they talk about that how much are they concerned about in a at this meeting going into the meeting, we saw a much more hawkish fed ready to lift off on rates sooner and much more rapidly. >> one of those issues is what happens here in the u.s., and

also what happens in china that could affect the economy in a global economy in a way we haven't factors in beyond the fact that the fed is going to quicken its pace offin at thattering and going the raise interest rates this year is the question what dothey do with the balance sheet that could be an important third prong of attack in tightening down on the money supply. >> exactly right, tyler. that's one of the things that we are looking at in the fed minutes here is what's the discussion around their views on the pace of, really, where the balance sheet is going to lie after we get past the first rate hikes. we saw the last rate hike, it took them three years to finally reduce the size of the balance sheet. it is $9 trillion today, almost

double where it was prior to the pandemic that is another concern in addition to rate hikes, what they do about the balance sheet. jay powell hinted a the last press conference in december that they are beginning to start talking about what the balance sheet looks like if they do nothing and let it run off it will shrink quicker than the last time around given the treasuries what they are talking about around the balance sheet is something we are watching. >> steve is digesting thenotes we will get to him in a minute when he has thought it through bob pisani, what do investors want to hear what will they be looking for in these minutes? >> they want to though if the trend is still in the market to sell sec following, particularly the speculative technology where there is not a lot of profit or the margins are very thin.

that's what's getting sold off the most try to think about what the market is being surprised by i don't hear about the fed minutes. they want to hear about powell's renomination hearing next week that's where there could be a market surprise. what is not priced into the market three rate hikes are priced in perhaps powell could be hawkish and imply four rate riks would be priced in that would move the market if they moved the first rate hikes to, say, march, or implied that that might move the markets. the last point, rolling off the balance sheet. we haven't heard about that. they have got a $9 trillion balance sheet. they could let things roll off that would be a form of quantitative tightening. they did that in 2018, look at what happened to the market. the people i have talked to are figuring out whether to buy

cyclical stocks and sell tech stocks >> diane, it seemed as i remember the press conference and the samt a month or so ago that inflation and its duration is one of the things that caught the fed a bit by surprise. talk to us about that. >> that's an understatement. it caught the fed a lot by surprise the magnitude and longevity of inflation and momentum we have seen in underlying inflation we have seen that even with the omicron variant still in the first quarter, we are not beyond the peak that's corn to the fed the fed feels like it is getting behind the could have been on inflation. you saw that pivot, every member, every participant in the meeting exempted '22 rate hikes. that's really important. >> let's get to steve liesman,

who has the headlines of the minutes for us >> i have some headlines here,cally, wading through the very complicated minutes what we are seeing is they had a long discussion -- they had a staff preparation about reducing the balance sheet. many agreed it was appropriate to initiate balance sheet runoff at some point after the first rate hike but not necessarily saying when. they did discuss balance sheet reduction for reducing -- balance sheet reduction for reducing in combination. there were very different views on the committee it appears, for reducing the balance sheet as i said, there was a staff presentation made. as we have said all along here, the fed has a lot less certainty about the -- about the effects on the economy and financial markets of balance sheet reduction, which is why it's likely to lean on rate hikes first. but, certainly, they are talking about some saw a significant amount of balance sheet reduction needed

and they discussed the conditions for beginning it. this last one i want to share with you, they said the current conditions could warrant a faster pace of policy rate normalization. that could be rates. but it also could be in the balance sheet. i will read more, kelly. but there is a discussion, as we reported this morning, as we have been reporting, a robust discussion on the federal reserve about the idea that the balance sheet's very high right now, and economic conditions are better than they were back when they did a balance sheet reduction last time. so certainly, some of these people on the committee are hot to begin reducing this balance sheet. >> we will see, diane, if the dow goes negative. it's only up 12 points it was up 70 before the release. across the rates complex pops as well, especially in places like the two-ier. what do you make of that diane? >> oh, i think what i am hearing -- yeah, i'm sorry what i am hearing about this is the fed is much more hawkish this is a hawkish fed. we knew that going into this

the range of uncertainty -- i think what the fed is really concerned about, something that tie leer mentioned at the beginning, china, their zero tolerance policy how is the collision of supply chain business rupgs going to hit us with omicron along with what's going on on the balance sheet. and the dissonance in the rest of the world the fed is the central bank to the world. they want to get on to rate hikes and dampening inflation now. that's clear that said, there is spillover effects to the rest of the world, especially developing economies outside of china, where they have to match rate hikes with rate hikes of their own. and that could cause its own destabilization in financial markets. i think that's something the fed is uncertain about when it comes the reducing their balance sheet. >> kim forest was concerned about that last week we don't have rick santelli this week, jason, i am going to ask you, now that the ten-year has

gone above 1.7%, where does it go from here >> if financial markets aren't already difficult enough to predict -- we are five or sixis base points away from the cycle high so far, 1.75. i think there is a historical argument that oftentimes the cycle high in the ten-year happens right after the recession ends and the recovery begins in earnest. if that plays out again there is an argument to be made that we are at or near the highs for this cycle unless we see a reacceleration of economic growth or pickup in inflation, not just going sideways or disinflation, but rekpael rags we might see another rise on the ten-year >> steve, anything you would add here. >> yeah, i was reading a little bit more here.

i am seeing more support than i initially saw when i was reading what i think was a generic session of the discussion. the last section i was reading is who about the back and forth. i am reading what i want to say is more support for a faster pace of reduction. it looks like -- reading quote, many saw faster balance sheet reduction than the previous time, which was back in 2017 through '19. remember, there was a two-year gap from the rate hike to the balance sheet reduction. 2015 was the rate hike 2017, they started reducing it and they also discussed monthly caps on the runoff i am not done searching but i am not seeing, whether or not the fed would begin reducing mortgage backed securities first, actually let those run off a. fun fact, if you are a fed reporter, kelly -- i know you would precious this more than most -- is that once the fed stops buying mortgages as

part of qe, in order adding to the portfolio it still has to buy $60,000 of mortgage as month just to keep the portfolio steady that's how much it owns and how much is expected to run off. the fed might move away from that and get back to more of a treasury-only thing. there is also a concern about flattening the yield curve and possibly reducing the balance sheet for that reason. so i am hearing or seeing, kelly, that -- i want to go back to comments laid by chris waller who talked aggressively last month. because he is new i was unclear if he was speaking out of turn or where he -- i am seeing a goodly amount of support for an aggressive balance sheet policy. and we will see how that matters to the market. i will explain why the balance sheet is so big right now, nearly $9 trillion, that it may be tremendous scope to let -- i don't know, i am throwing out numbers here, $1 trillion or $2 trillion, a number used by chris waller, let

it run off and have almost no effect on markets. that could be the case at the same time, we have seen sensitivity. one thing to look at diane was talking about mortgages. another way the look at it is mortgages over treasuries. they have hung in there pretty good relative treasuries we have not seen a jump from the spread between mortgages and treasuries markets are well behaved >> yeah? i will conclude here, saying to the fed, you know, you can do more here because the market is not freaking out. >> the ten-year, even as you are speaking, steve s climbing bob, thoughts on the market fallout. do you is down 55 points ten-year at almost -- let's call it 1.71% right now >> this is more hawkish than almost anybody i talked to anticipated. they anticipated being somewhat hawkish. i think it is a big deal to talk about niche nating the balance sheet runoffs. steve is right this is $9 trillion. if they start letting stuff run off that's i guess you would call it quantitative tightening.

this is what we started doing in 2018 we saw what the market reacted to in 2018 it was a little more violent than i think the fed anticipated. it is rare when a fed minutes actually surprises people a little bit most of the traders i talked to were anticipating to have concerns about the fed powell's renomination hearings next week. they also talked about raising the fund rate sooner than expected there are two of the three surprises i talked about the other would be all of a sudden they implied four rate hikes instead of three steve is reading over, we will find out soon enough i think this is a significant meeting. more so than most fed meetings, fed minutes. >> bob, thank you, diane thank you. jason and steve. >> ty? >> yes, sir, please. >> at this letter?

>> yes, sir. >> i want to respond to what bob was talking about before we move along. the probabilities of that march rate hike is now 74% or 75% up from 71% the thing i am watching now is the probability of what bob pisani was talking about, of a fourth rate hike this is small. it was 37 before the meeting now it is 40 with the idea of a more hawkish fed there is talk about taking a hedging position of taking the possibility of a fourth rate hike now 40%, with the third rate headache in november in the 50s and 60s. >> the markets are melting away. we will watch them for you all day long. meantime, shares of general motors up 50% over the past year as the big automakers try to play catchup to tesla in the ev space. joining us to talk about the

company's latest moves to expand the ev business, joan ral motors' ceo, mary barra and fill lebeau >> mary, thanks for joining us you have got the chevy silverado behind you you have opened up for reservations where do you expect most of those reservations to come from? >> well, i will tell you, phil, first, we are really excited because that first edition of the rst sold out in 12 minutes and orders are still flowing in. we think we are going to be to have very strong response as we go forward we saw strong response from lyric with that niche, and we will be doing that shortly, offering more lyric. i am very excited about how many orders i think we will see in just the next handful of hours and of course the next handful of weeks. >> mary, let's be clear here the fleet version, the work

truck version of the silverado ev goes on sale next spring. the rst, the consumer and the retail version -- those first ones will be the higher priced first editions, they don't go on sale until late next year. you have got a big window where people are going to say, boy, have you given up first mover advantage to your competitors across town? because we are going to see the lightning moving into showrooms in a matter of months? >> from the work truck perspective, i think we will see retail customers not just fleet interested as well and we have the hummer we will get the silverado work truck, the rst, and all the variants we haven't even released yet out to the customer as soon as possible. with the ltm platform and the features of the silverado, it

doesn't compromise it has the tailgate, the mitigate when you look at all of the performance the truck has, depending what type of truck owner you are, we are going to meet you exactly where you need. that's important to mention with the silverados and the gmc sierras shortly after that. >> you announced today you are going to have two other evs going on sale next year. the blazer and the equinn knocks i think we have got pictures of that do you think that the crossover suv market for the consumer is going to be the hot part of the market, if you will, in terms of ev growth? >> i think it's going to be hugely important because if you look at the auto market, you know, there is a huge volume segment in that $30,000 to $40,000 range. if you look at where we have positioned the equinox and the vehicle and all the features it is going to have, and then the blazer, they are going to be in

the sweet spot of where consumers are going to be able to make the conversion to ev because they see the value and the opportunities and the vehicles are great. >> you are going to be starting base models around $30,000, correct? >> base model of the equinox will be around $30,000 so very affordable, right in the sweet spot that's where we think we are going to drive a lot of volume and get a lot of ev owners we have been talking about leveraging the strength of general motors, having a full portfolio. chevy is our value brand when you look at the silverado, the equiknocks and the blazer evs we are going to be well positioned we are going to be well positioned from the cadillac point of view of the market with the lyric and other unannounced models there the hummer is doing very well. we are getting great feedback from customers and also bright drop

how we are positioned from a fleet and commercial perspective there. that's what gives me confidence that we are going to be number one mid decades in evs in the u.s. >> you sort of presupposed my question you mentioned cadillac i was going to ask you basically about your core, which is the chevy brand, your entry level brand. where do buick and cadillac fit in the ev universe what do you have coming there? and how do you expect to attract buyers to those products. >> again, when you look at the cadillac lyric that goes on sale this year, just in couple of months, we are so excited to get that vehicle out from a customer perspective it is one of the highest clinicing vehicles we have ever had of any type of vehicle. the customers is telling us they want that vehicle. the reviews on it have been incredibly strong. that's why we are going to be opening up for more lyric orders as we go forward and we are making sure that we are having the capacity to meet the lyric

demand we saukd about the is a lustig an ultraluxury car that will be customized and we have vehicles coming in between from a cadillac perspective that you will be hearing about over the next several months that round out the cadillac portfolio that will lead us into the all-ev future >> and buick >> and buick also is a very important brand for us and we have buicks planned as well we haven't revealed any yet but trust me, there is buick models coming as well, along with our gmc. >> mary, i want to ask you about the cadillac inner stays concept vehicle. you said during your presentation a couple of hours ago that the goal is to sell a fully autonomous vehicle, and the inner space is one possibility, to a retail market. so me or you or anybody could go out to a dealership and ultimately buy one of these.

my question is this, do you believe there are a lot of people out there who want their own autonomous vehicle and and two, why not take this technology and put it across the whole portfolio of vehicles instead of saying here is one. >> when you look at the timing we have the driver assistance technology with ultraand super cruise when you look at cruise, and having a true autonomous vehicle -- i have talked to many people who said they want their own autonomous vehicle we said as early as mid decade we believe we will be the first large scale fully autonomous ride share and goods company with cruise. when you look at that, if you can add personal autonomous vehicles it is just going to make your ride share and goods delivery even better because we are going to have to have more

miles on the network and continue to move and create momentum on our leadership. >> mary thank you for joining us joining us from the fox theater in detroit there it is behinder, the chevy silverado ev tyler, a reminder, the silverado ev guess on sale early next year with the rst versions, the first edition, or the consumer version going on sale late next year >> coming up, the game stop trade in 2021 created winners among individual investors, and hedge funds. we have the returns of one big investor coming up. and oil prices off to a strong start this year it is early. up about 4%, though. the s&p energy index up more than 7%. goldman sachs's jeff kerr, one of the best, on the tufure of supply, demands, and where prices go next effect.

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great fortuned of the january market mania describing their positioning with regard to being long gamestop. they have returned 85% in 2021 this is according to an investor who shared this news on an anonymous basis, on a person familiar basis it appears based on performance tallied by hsb this could beth best-performing hedge funds of the year thanks in part to being long gamestop generating returns in profit of about $700 million at the time. earlier we shared returns for the year for melvin capital who was on other side of the trade, going short gamestop, they posted losses in 2021. however, looking from february 1 to the end of the year they would have been firmly positive. again, reminding our viewers the

outsized impact that gamestop had on returns for hedge funds almost a year later. >> thank you leslie. further ahead on the show, investors displaying some anti-social behavior cnbc reporting catching the attention of the white house that's another one we will tell you about, the response to our exclusive poll when we return.

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welcome back i'm rahel solomon. here's your cnbc news update at this hour. in the leadup to next week's u.s./russia talks on ukraine, secretary of state antony blinken met with germany's foreign minister to present a united front they both see russia's actions a challenge to peace and stability in europe. >> we condemn russia's military build up ukraine's borders as well as moscow's increasingly harsh rhetoric as it continues to push the false narrative that ukraine seeks to provoke conflict with russia that's like the fox saying it had no choice but to attack the

hen house because the hens started it violent protests in kazakhstan were paernt apparently sparked by the government's plan to raise the price of fuel. lawrence brooks was 31 years old when he served in the u.s. army during world war ii when it was still segregated today he died at the age of 112 as the nation's oldest living miller the veteran when asked when was his secret to longevity, he always answered, to be nice to people that's always worth repeating. >> very sweet. what a life. rahel, thank you very much. the white house responding to a cnbc change research poll we reported on yesterday showing president joe biden's low approval ratings on the economy. kayla tausche is back with the response. in the poll conducted in late december, 73% of the

responds entz said the economy is not in good shape and notely independents, the group of voters that do not identify with either political party but secured the presidency for probe in 2020 gave him a d grade across the board on all issues i asked jen psaki to explain this winter of discontent. she said that the underlying economy is strong but that the electorate remains frustrated by the pandemic. >> they are worried about being labor shortages, canceled flights, or not enough teachers in school because of the spread of omicron we understand that so our focus right now is on doing everything we can to continue to fight the virus. >> the white house has also said that its social spending package, build back better is the salve that the economy needs, but only 30% of independents say that package will grow the economy and create

jobs i put that question to psaki as well, whether the white house needs to rethink its policy priorities she said that package hasn't passed yet and if and when it does they are going to need to do a better job explaining what's in it. >> ahead on "power lunch," oil higher today, continuing its solid start to the year. energy stocks up nearly 8% so far. and we are just three days in. gasoline prices climbing the most since april of 2020 goldman sachs's head of mmitst wl igh in next e. 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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show up for the first day of school, the last day at their current address. for the mornings when everything's wrong. for the manicure that makes everything right, for right now. show up, however you can, for the foster kids who need it most— at helpfosterchildren.com we have less than 90 minutes left in the trading day. we want to get you caught up on the markets, the bonds, the commodities, and energy. we will go there last but not least. the jolt that stocks are getting, let's begin with equities, chicago are trading near their session lows. there you see the dow melted whatever gains it had. nasdaq has been down most of the day. now down 2.14% and the s&p, after being pretty flat turned negative by 1% following the release of those fed minutes.

and the key there was what the fed said about the balance sheet and not replacing those bonds that roll off the balance sheet. the fed hinting that it may be more aggressive at removing stimulus the dow, the s&p, and nasdaq, there they are let's go bonds yields hit the highs of the day post fed minutes the ten-year touching 1.7%, that is the highest level since last october. and the two-year at its highest level since way back in march of 2020 as the pandemic began as we turn to commodities, oil up about 1% today. as you see there, .91% west texas at $77.69 about $78 a barrel this coming despite the fact that opec plus -- that's not a grade of gasoline, folks, opec plus kept its higher rate of output target and u.s.

inventories rose exxon the best performer in the group. exxon, diamondback, occidental, slumberger, up there with opinion duo duo as my favorite names to pronounce let's bring in our friend from goldman sachs jeff currie kicking off its clean technology and energy conference today. jeff, good the see you walk us through the supply and demand picture for oil the first three, six months of 2022. >> i think over the next three months this market is going to continue to get tighter. inventories are drying demand is not nearly as damaged biome kron as we initially would have thought back when we had the black friday selloff back in late november. strong demand, inadequate

supply, inventories continue to drop it opens the market up to the upside i think the other point is investors haven't liked this sector there is not a lot of capital in the market when we have investors coming back with a fresh start to the newier we are likely to see more capital moving into oil and commodities bloodily we are sticking with our guns of $85 a barrel if you actually have iran continue to be delayed and kicked into 2023, you could take it up to above $90 a barrel. >> i was going to ask that question it was not that long ago that you said you could possibly see $90 a barrel brent today is about $80 and west texas we mentioned a moment ago, is at $78 so there is nothing on your horizon that casts any doubt in your mind on where oil prices are headed short-term? >> yeah. if you look at -- the micro

fundamentals in this market have been intact the entire amount of time towards the end of last i don't remember we had the omicron concerns, china concerns, the spr concerns all three are reversed right now. the bottom line, inventories are drying the markets are tight. and when we look at the macro head wind it has turned into a macro tail wind which should bring money back into the secretary. we are positive, and we think it is a bull trajectory that's going to last years. >> you pointed out it hasn't been a popular sector for quite some time and it is just the fundamentals that are going to draw capital back in >> yeah. here's a stat. you look at, you know, the earnings of the energy companies in the s&p they represent about 5% of earnings but the actual market cap is somewhere around three that kind of industry, whether

it is commodities, equity, the whole entire sector, is not loved right now. we think that's going to be one of the big shifts that happen over the course of the next several -- i would even say the next several weeks as people kick off the new i don't remember they are going to go, hey, old economy looks pretty good right now. particularly tech is selling off right now. so the shift away from new economy into old economy the other thing to remember about commodities in particular, they are a hedge against rising interest rates so when we have this fed pivot and a more hawkish fed you want to be in commodities because they are going the ones that hedge you against that kind of environment. remember, it is the pressure in oil and commodities that's forcing their hand. >> do you see, jeff, that oil could have remained range bond but the stocks could do well this year? >> absolutely. if you look at historically when you have a big run-up in oil prices let's go back to 2004, the beginning of that super cycle

era, oil moved first, then the equitiesed of mo equities move first, capital flows in, they get access to cap the, they spend it it creates inflationary pressures in the oil services industries that lifts this market higher. we don't expect the see oil being that range bound we think we are going to hit fresh highs but we think the upside in the equities because they lagged so much over the course of the last year is significant here as well. >> in other words, jeff, how high do you think the oil price is likely to go? i don't know if you can get granular on which stocks are likely positioned or which parts of the sector tmplg upside here is significant in terms of look info ing at the potential for supply risks. kaza kazakhstan, ecuador had problems iran seems like it is off the table. we haven't had a bump up in u.s. drilling capabilities. russia can't make its quota

right now. in fact, there are only two countries right to you who can produce more than what they could in january 2020 before covid. saudi arabia and the uae everybody else is struggling to hit those precovid levels. let's remember, the u.s. is 1.8 billion barrels per day below prequid levels demand is up to precovid levels but the supply is not. that opens up the upside. >> what about natural gas, jeff? >> it depends which natural gas in the world you are talking about. u.s., you have more than enough supply to meet demand. the real problems lie outside of of the u.s., particularly in europe. >> is there an era other than the energy i

>> they are all similar stories. the king of all commodities is copper you cannot decarbonize the world without copper it is the new oil, the most important commodity. it is our favorite aluminum is also up there. you can't solve climate change without aluminum but when you produce it it creates the most emissions it has a paradox toet. the metals complex combined with energy looks positive going into 2022. >> jeff, we love hearing from you. thank you for spending time with us todays. look at the nasdaq as we head to break. it's heading to session lows after those fed minutes. off 390 potsin, or 2.5%. back in a moment

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>> huge declines in the nasdaq this afternoon after the fed minutes came out top of the hour, it's really picked up. it's down 367 points or about

2.4% right now fortinet, the best stock in the market last year, it's gone basically from first to worst. it was up 140% in 2021 but now through three days it's the worst stock in the s&p down 12%. other software-based cybersecurity stocks like datadog and cloudflare also coming back down to earth after monster 2021s. joining us is an analyst is the trading today frustrating? >> i don't think it's frustrating. i think some of this was expected, kelly. we had a massive covid pull-forward you're digesting in many of these stocks went to levels we've never seen ever in software multiples in the last two decades. and i've covered this space, you've never seen multiples in that level

so when you have that type of appreciation, you're also going to have a little bit of a hangover given how good, you know, '21 was, and even in '20 so, you had incredible multiple appreciation the fundamentals are really incredible still this really just has to do with multiple compression and then the fear, will the covid hangover catch up and will growth decelerate in our software coverage? any percentage of the software industry will decelerate in growth this year, and only 20% will accelerate. with high multiples that's a recipe for a disaster as it relates to some of the multiples in the short term. >> is it changing your ratings on the stock let's take the case of datadog and cloudflare which were up 70, 80% last year. do you have buys on those stocks and where are those stocks trading now relative to where you think they should be valued?

>> we downgraded cloudflare last year stock's 100 now so we did get off of cloudflare. we love the team, we think it's an incredible position this has a chance to be the fourth cloud, next amazon, google, and microsoft. but valuation got a little out of control so we did downgrade that one datadog we have a buy on it. it's one of the most disrupted infrastructure names out there so we did not downgrade that one. but, again, i think ultimately you're looking at both of these stories are phenomenal fundame fundamental franchises >> understood. brent, thanks for checking in with us today. we appreciate it >> thank you >> the market continues to be under pressure, those tech stocks ipaicar, 'ln rtulwel have more on the other side of this break.

welcome back to "power lunch," everybody. the fed minutes sending a bit of a shock through the markets over the past, particularly the high-valuation tech sector let's bring in bob pisani. what did we hear at the top of the hour accelerate this selloff, particularly nothing the nasdaq companies >> yeah, tyler, normally the fed minutes is a bit of a snooze fest, but this was a surprise, it was more hawkish than a lot of people expected, including people i was talking to. the surprises, number one, they talked about potentially raising

fed fund rates sooner than expected that wasn't quite expected and i think even more unexpected was they talked about initiating a balance sheet runoff, $9 trillion on their balance sheet. they can let that run off. they did that in 2018, it was called quantitative tightening and the market had a little bit of a hiccup with that. the s&p we lost about 20 points on that. what's holding up very well, defensive names like coca-cola, pharmaceuticals, industrials and cyclicals and energy stocks have been holding up under the theory that omicron may slow down the recovery, but it's not going to derail it. tech stocks is the issue the bifurcation that we're seeing, mega cap tech that generally has very high profits and great revenue growth potential, down but not that much what's really been getting hit is stuff that has maybe revenue growth potential but either

doesn't make any money, companies like doordash or twilio or that has very high multiples or very low profit margins, shopify they're the ones that are down 9, 10, 11, 12, 13% so far this week another one, kelly, before i turn it to you, gamestop near the lowest level since march of last year. 132 is the old march low for that so keep an eye on the meme stock. >> crypto's also under pressure. and the semiconductor is down 2.5% >> yeah. and, again, i wouldn't worry that much about those. the ones -- remember, this is all based on a discounted cash flow model when interest rates go up, what's the value of those stocks that have high cash flow that's a bit of a problem

because interest rates reduces the present value of that cash flow and that's why some of these more speculative tech stocks are being sold at this point the fed surprised people today by being more aggressive >> bob, thank you. tyler, what a market >> yeah, it's really been a wild hour >> and it's not over yet, folks. stay tuned to "closing bell. they pick up our coverage right now. ♪ yes, we do thank you, kelly and tyler and welcome to "closing bell." i'm sara eisen a turbulent day here on wall street with losses accelerating, yields jumping after the fed minutes this afternoon, the nasdaq sharply underperforming, down 2.5%. >> good afternoon, i'm wilfred frost. let's have a look at what is driving that negative action, as sara mentioned, the nasdaq continues to lag as rising yields remain in focus microsoft, apple, and nvidia among the biggest drags. salesforce plunging as well and putting pressure on the dow