eastern time. final trades. >> weiss i also added, as you know, to taiwan semi on monday because no matter what happens, they are the winner. >> sniper palo alto. >> stay. long here. >> kerry ford of precision instruments for manufacturing. >> the joe t. >> chubb strong. >> earnings despite. >> the costs in la. >> okay got a lot going on today and i hope you'll join me on closing bell. the exchanges right now. >> thank you very much scott. and welcome to the exchange i'm kelly evans. it is a big. hour ahead. >> the fed's. >> first rate decision under the second trump administration. >> is coming up. >> they are widely. >> expected to pause despite. >> the. >> president's call to immediately lower interest rates. >> and now. >> they have trump's government funding freeze to contend with, with. >> which some argue. just increase the odds. >> of a us recession. >> and nvidia shares are down again today. >> as alibaba. >> becomes the latest chinese. >> name to release a sophisticated ai model, with rivals meta and microsoft reporting. after the bell today, we'll explore what it all means

for these stocks and for the next leg of the ai race. first, though, let's get the fed market set up from dom chu. >> it's relatively calm right now, as you might expect ahead of a big fed announcement. and of course, a press conference from fed chair jay powell. but we are to the downside. and i will point out we are near session lows at or near session lows. right now. the broader s&p 500 is holding above that key 6000 level 6042. but it's still down 25 points. we were down roughly 27 points at the low down five points at the highs of the session. so it has been a modest decline overall for the day. the dow industrials at 44,803 are off just about one tenth of 1%. that's roughly 50 points to the downside. and the tech heavy nasdaq composite index at 19,566, is down about 172 points, or roughly three quarters of 1%, nearly a full percent at this point right now. so that kind of volatility or price discovery phase continues post that big deep sink news earlier this week and this past weekend. with regard to technology, we are still watching what's happening with nvidia shares because as kelly

points out, they're down again. but down 17 up 8 to 9. down again. five and a half points. the roller coaster continues as traders again try to assess what the proper level for valuations is. one place that is a strong upside mover is asml holdings. this is the dutch semiconductor equipment maker better than expected earnings report and their bookings. a possible gauge of future business down the line came in better than expected. that's the reason for the nearly 4% jump there. but again, some people look at asml as a possible leading indicator for the overall semiconductor space because it makes the equipment that makes those chips. so keep an eye on those names. and then of course, meta platforms, microsoft and tesla, those three of the magnificent seven are all out with earnings reports after the closing bell today. as things stand pre fed pre earnings microsoft shares down about 1%. half percent decline from meta platforms. and tesla shares down about 2.75% as well. so the setup for these mag seven names a little bit weaker. we'll see if there's any kind of upside volatility and what they

have to say to get that. kelly i'll send things back over to you. >> this earnings. >> season for the big tech names coming at a very momentous time. >> tom. thanks. and as per usual. >> the. big action may. >> not be in the. >> fed's actual rate. >> decision today. >> but in the language. >> from chair powell. >> recall his remarks after the. >> fed's hawkish cut in. >> december threw stocks into. >> a. >> tailspin that day. let's get more from steve. >> liesman, who's prepping down in. >> washington, d.c. hi, steve. >> hey, kelly, if you don't mind, just a second. some breaking news here. i'm looking at the twitter feed of our correspondent, peter alexander from nbc news, who is put up a memo saying that the administration has rescinded the order freezing federal assistance. the washington post had reported. now it looks like peter alexander from nbc is also reporting it. all of this folds into the fed, because all these dramatic announcements from the trump administration in just the past 24 hours, when it comes to federal workers and federal spending, they've underscored this decision that looks to be coming from the fed to pause and wait for greater clarity before considering any additional rate

cuts. the fed already had to weigh the potential effects of tariffs, tax cuts, deregulation and deportations. now it has to put into the mix this idea of a potential decline in government spending, though now that looks perhaps to have been rescinded, and some portion of 2 million federal workers could be out there looking for a job. so the keys to the fed outlook today will be whether it affirms that the direction of rates is still downward, that it has confidence that inflation is still headed towards the 2% target. and of course, this fiscal policy dance that fed chair jay powell will do with reporters at the press conference where we ask questions about fiscal policy that he does not want to answer well, compared to how markets priced the outlook for fed rate cuts after the december meeting. futures are now priced for less of a chance of a cut in march, about the same, even money chance of a may cut. but now a greater probability of that first cut coming this year in june and the second one in december. in this context, what you led with kelly, president trump's recent demand that the fed lower interest rates, that could be the least of fed chair

powell's concerns. he could ignore that. what he can't ignore all these changes going on on the fiscal side that could have big macroeconomic effects, kelly. >> and we're chasing. >> those headlines, steve, as well. appreciate you mentioning that. we'll let. >> you finish getting ready and we'll see you in about 55 minutes. >> steve liesman. >> with. >> the fed's decision at 2 p.m. eastern. meanwhile. >> my next guest still agree the fed's bias. >> remains towards. >> more easing. >> one even says 3 to. >> 4 cuts. >> are still possible. >> this year. >> joining us, michael. >> gapen is chief u.s. economist. >> at morgan stanley. >> subadra rajappa is head. >> of u.s. rate strategy at societe. >> generale, and jamie cox is managing partner at harris financial group. >> jamie. >> you're in kind of the broader. >> washington. >> d.c. area. so i'm going to start with you today. >> as. these headlines go back and forth. >> about the president's. >> plans to freeze or cut. funding and workers. >> the significance, as. >> far as you're concerned, what does it feel like in that kind of broader region? and what does it all mean for the fed? >> well, i. >> think, kelly. >> i think it's. >> interesting to note that. >> the source of market. >> uncertainty has. >> used to be the. >> federal reserve. now it's

just down the street. >> at 1600 pennsylvania avenue. i think that's what we're seeing day by day. since the president. >> took office. >> last week. one of the things i think is going to be very interesting for the fed is to. >> watch. >> you know, the balance sheet. i mean, today. >> they're not. going to move. >> on the fed funds. >> rate, but i think you may in fact. >> see them. >> further reduce the run off on the balance sheet. it's about. >> eight months ago when. >> they first reduced the balance sheet runoff down to about 45 billion. >> it's very. >> possible they'll. >> reduce it down to $20 billion. >> the reason why. >> i say. >> that is. >> they're kind. >> of running out of reverse repo. >> some of the easy money. >> to run off the balance sheet. >> the next mile. was with bank reserves. >> and they need. >> to be. >> careful given that the debt ceiling is back in play. you have a new treasury secretary who will change the complexion of which you know what type of treasury issuance. >> is used. >> to fund the government. and so it's just going to be. >> interesting to see. >> i think they're going to have to. >> start to deal with. >> the balance sheet early so they don't. roil and cause a funding crisis. >> or have money. >> markets get out of control on

them. so i. >> think that's what you're going to see. and one. >> last thing, kelly. i think the tax policy debate. about the tax cut and jobs act, they're not going to be able. >> to. >> do it in one. >> reconciliation bill with border security. >> and also with. >> defense spending. >> you've got to break it into two bills. i don't think they have the votes. it's the tax is so controversial that it's going to be very difficult. my meetings on the hill, there are so many back and forth, you know, ideas about how to pay for the tax cuts. it's going to be difficult for some of the members to take votes. i think they're going to ultimately have to break it up and do border security and defense. spending first, and then delay the more difficult votes for the tax cuts in june. >> so i think that's. >> that's the setup. >> for this year. but jamie. >> as. >> you and. >> i know, if the market. has months to contend with whether or not these tax cuts will be extended, they may not agree with scott bessent that it would be an economic disaster, but they will certainly agree it's going to affect earnings and probably. the broader economy if it doesn't pass on the corporate side. i mean. >> i think the corporate tax cuts are not a problem. i think it's more on the 20%. >> section 199 cap a. yeah, the fight is over the personal side for sure, salt and whatever is

going to happen there. but because it's all tied up in the same package and if it's going to be a separate bill, it'd be. >> much better for markets. >> if it were one bill that were going. >> to move. >> early in the year. right. if they're. >> breaking it up and. >> we're kicking that. >> into the back half, that's going to mean a lot of uncertainty. about a key variable. i think. >> they can do it. >> by june. >> they can get the tax package done. >> by june. the problem. >> is the payfors, you know, in the last tax cut and jobs act, the. >> original, they had. >> a lot of repatriation money that they used. to sort. of offset some of the cost of the tax cuts. >> that money is gone. >> so the other payfors. >> are much. >> more complicated, changing, you know, maybe reducing the head of household deductions or whatever in the, in the, on the personal side, or worse yet, changing the deferrals. >> of. >> retirement plan savings for americans by limiting how much you can defer in your 401 k on a tax deferred basis, or making other changes that might not be so pleasant. so those are going. >> to be. >> much more complicated discussions. and it will it will create a lot of policy uncertainty as we move through the year. but i think they can get it. >> done by june. >> they're actually more likely

to get it done by june if they break up the bill into two as opposed to doing one. >> all right. let's pause there for a moment. >> and dig into this market sell off. we're seeing on these headlines about the federal aid freeze. >> dow is. >> down 150. a moment ago. >> megan cassella is in washington. megan. >> what's happening? >> kelly. >> that's the latest. >> this hour. we just have this memo from the acting director of the office of management and budget rescinding that federal freeze on all federal aid programs that was meant to go to all federal programs. but now, let's just recap here. this was issued on monday night. the office of management and budget came out saying that all federal aid was going to be frozen in place. >> while the. >> white house reviewed it, there was mass confusion over. >> what exactly. >> this would mean. the white house was out yesterday, emphasizing that direct aid to individuals would not be affected. they said medicare, social security, welfare and food stamps those were their ofn over medicaid specifically, as well as meals on wheels, head start and other programs. late yesterday evening, a federal judge issued a temporary stay. this wasn't meant to take effect immediately. now we have this

new memo and i'll show you guys. it's very brief. >> just two lines here. going to. >> all heads of federal agencies and departments saying that this omb memo has been rescinded. and if you have questions about implementing it or implementing any of the president's executive orders, please contact your agency's general counsel. so obviously, here, guys, responding to this mass confusion that we've seen over the past 24, 36 hours over how exactly this would be implemented now just rescinding it entirely. >> kelly. >> stay with us. >> for just a second. i want. >> to. >> show. >> everybody with this leg lower in the market, there's two things going on at once here. the headlines that megan is telling us about what may be going on with federal funding in washington. also reports out of bloomberg that the government may also be working on tighter export controls for nvidia chips. you see those shares moving down to session. >> lows just a little bit more. >> than they had been, but enough probably to put some. >> further. >> pressure across the markets. >> remember. nvidia's. sales of chips to china. >> specifically are a big question mark for analysts who. >> are trying to figure. >> out what its revenue and earnings exposure are going to

be. >> in the next couple of quarters. >> they were able to. >> kind. >> of thread. >> the. >> needle on export controls earlier. that's in part how deep seac was able to. still use those chips. >> to create its latest. >> large language models. >> if there is a further. >> tightening, though, that would. certainly be a. >> business headwind for them. >> megan, back. >> to you, though, on the on the on these headlines. >> coming out of. >> washington and these. questions about. >> i guess. >> for me, from my understanding, do we. >> think. >> that. >> basically the. >> the white house both put out this. >> order yesterday and. >> rescinded it today, or is there some sort of internal white house fight going on here? >> it could be a fight. it could be just a little bit of. confusion over how this was going to be interpreted. so what they were saying yesterday was that this was only it was meant to be more narrow, that it was about things like the green new deal die policies that that was they were what they were meaning to target when they wanted to freeze federal aid. but the way that the initial memo was written, it was written very, very broadly, making it seem as if all federal funding was going to be paused. and then we even saw lawmakers talking about medicaid programs and systems in their individual states actually

being. >> on pause. >> and so it was interpreted very broadly. may it was a question about how it was written and who wrote it, and what it was meant to be saying that we could always see them come back with sort of a more narrower, targeted, rewritten version of this in a few days or a week, a couple of weeks. but for now, they're just sort of scrapping it and saying, let's move on. >> all right. s&p is down about two thirds of a percent. megan thanks. megan cassella in. washington will continue to follow this story. >> michael gapen subadra rajappa. >> still standing by. >> along with jamie cox. michael. >> i'll turn. >> to you. what are we supposed to think about. >> the fed in the midst of. >> all this? >> yeah, i think the fed. >> has in some ways an. >> easy meeting, but a hard meeting. >> and i. think essentially we're. >> looking for three. things today. signals about the future. >> one. >> one is how much confidence. >> do they. >> have that inflation is moving lower. we think. the data that's come in since they met in december should give them confidence. it's still heading lower. that should guide markets. >> to. >> lower rates. on the other hand, as we've all been saying.

in this segment, there's a heck of a lot of policy uncertainty. >> the more. >> that they get stuck. >> with that, the more they're probably on on the sideline now. >> so it's a tricky balance for them. >> at the moment. >> and then third, as was mentioned by jamie, what do we do with the balance sheet. when do we start having serious discussions. >> on ending the. >> balance sheet. so a lot of things on the fed's schedule today, i. >> as steve said, i'm. >> not sure powell wants to answer a lot of these questions. they need more clarity, just like markets do. >> imagine if he just. >> canceled the press. conference and said, you know what. >> we're just. >> going to pick it up next time. >> so i think that would be a good idea. >> you know what? what could be. worse than than. >> inadvertently causing. >> a big sell off? subadra yesterday, diane swonk was here and said something. >> interesting, which is. >> while she agrees. >> with everyone. >> that they're probably going. >> to bias towards waiting as this all comes in, that they might have a better shot at doing a cut in march than. >> later in the. >> year. >> in part. >> because of how she thinks the tariff and kind of price issue will evolve. >> i'm just.

>> curious if you could. >> weigh. >> in on. >> that and you still. >> think we could have, what, three cuts this year? the way that things are looking now? >> yeah. >> i think that if you look at the trajectory for the economy, everything is fine. but as mike gapen was pointing out, uncertainty is really what's driving a lot of the price action, not just in the equity market as well as, you know, in the bond market. so, you know, there's you know, the fed is going to be very data dependent. i don't think they tell us what they're going to do at the march meeting. but ultimately their bias is towards easier policy. so let's say we get a weak employment figure. >> or. >> you know, we get more uncertainty on any of the other policies and the impacts of that are being borne by the market. i think the fed's bias is going to be towards easing. so, you know, in that sort of context, the market's very efficiently priced in for just two cuts for this year. i could easily see a scenario where if things the data actually turns and we start

seeing some weakness, say in employment, for instance, that the fed starts pivoting towards easier policy, for sure. whether that needs to be front loaded or back loaded is not clear to me. i think that that's going to really depend on the sequencing of the data. >> but i don't like what you said because, you know, i think we'd all love the rate cuts that, come on, you know, the immaculate disinflation as it's called without the slowing economy part. >> and it was interesting in the. >> consumer confidence survey, where a lot of consumers were a little bit more downbeat about their job prospects. >> we've seen a little drumbeat of headlines now with some. >> companies that are struggling like kohl's. >> but steadily. >> there's been a lot of trimming and job. >> cuts in the news. >> subhadra. >> so is that what. >> you're talking about, where we could see some labor. market weakness? >> yeah, you could definitely see that. i mean, there's also the wildfires in in california that could have some sort of near-term impact. and then broadly speaking, the impact of immigration. i mean, that could eventually lead to tighter, tighter labor market. but again, we're starting to look at any

possible potential sign of weakness. i think the fed is going to be much more biased towards easing than staying on pause or hiking from here on. so they're going to have to weigh a lot of conflicting, you know, policy, you know, measures and what the impact is going to be. but ultimately, i think that they're probably going to favor easier policy. >> all right. well, i thank you all for hanging. >> with us on. >> this busy news day. >> and we'll see. >> if it's. >> busier or not. >> next. >> our michael. >> gapen, subadra rajappa and jim. >> acosta really appreciate it. coming up, we just mentioned nvidia. is it invincible. no more shares are near. >> session lows. >> and down. >> nearly 6% today. >> on. >> reports of the. >> white house. >> tightening curbs. >> on. >> their china sales. >> we'll have the latest on the ai front including. >> alibaba getting into. >> the race. >> and openai's. >> new accusations against deep tech. meantime, meta is hovering. >> near all time highs. >> and bucking the broader. tech sell off this week as it tries to extend its seven day win streak down about a. >> fifth of a percent. >> right now. >> the stock some are calling

the one clear winner from ai. we'll talk about that with evercore mark. >> mahaney next. >> mahaney next. >> this is the exc (♪♪) the booking app i used didn't have agentforce. so an ai agent didn't know to move my reservations inside... ...or know what i like to eat, which is not that. what's up, my brother? oh, hey, bud! we really needed this rain. right? [car splashing rain water] agentforce helps restaurants prevent dining disasters. paddle on over! it's what ai was meant to be. we got you, brother. ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ ♪♪

at state street, we know everyone's trying to get somewhere. ♪♪ take the next step toward your future, by investing in the s&p 500 with spy. getting there starts here. >> reported at least. >> that. >> they have. >> a cluster. >> of. >> 50,000 nvidia gpus. >> deep sea. >> their model. >> is actually the top performing, or roughly on par with the best american models. you can see the deep sea new model. it's super impressive and it's super compute efficient. >> we're not just about managing information. we're about supplying digital workers. now we're the way i approach work post fatherhood, has really trying to understand the generation that we're building devices for. here in the comcast family, we're building an integrated in-home wifi solution for millions of families like my own. in the average household,

there are dozens of connected devices. connectivity is a big part of my boys' lives. it brings people together in meaningful ways. granger for the ones who get it done. >> welcome back. >> nvidia is once again the talk of the day. >> it's the stock of the day. >> it's now down more than 6%.

>> there are. >> new reports just a few moments ago that the white house. is considering tightening curbs on their china sales. of course, this comes as the ai ai trade tries to find its footing post deep seek, and the internet giant alibaba is. >> out. >> with a. new ai model of its own, which it claims outperforms. deep seeks version three. >> let's get. >> out to deirdre bosa with more on this rapidly shifting race. but deirdre, today's headline potentially from the you know from washington is a reminder that where the rubber. meets the road here may. >> be in. >> exactly how. >> much and to. >> what extent the government constrains nvidia from trying to do further business in china. >> yeah, i don't know the details. >> of what they're going to do. >> differently. >> but it should be. >> different because. >> the. previous export controls. >> not only were. >> they useful, they backfired. >> they essentially led to deep sea. >> and all of this just fits into this overarching theme. >> welcome to the ai. >> race post deep sea. this is a breakthrough so significant. >> it redraws. >> the battle lines and. >> it makes. the winners. >> of. >> the previous era. >> openai and. microsoft makes. >> them look like. >> sore losers. accusing deep

tech of using open. ai inputs. that is the kettle. calling the pot black because just like openai. >> trained chatgpt. on internet data. >> deep sea trained its model on updated. >> we think likely. >> updated generative. >> ai internet data. >> so sure. >> copy the playbook. >> but it did so far more efficiently and then open. >> source it and innovated. >> on top of it. you can see all of this because it's open source and published the research paper accusing deep tech of using open ai outputs. again, this is just kind of ironic to hear it. >> from openai. >> to sum up the new race in one word distillation, a way to shrink a big. ai model into a faster, smaller one while keeping what it learned. >> here's what. databricks ali. >> ghodsi told me. earlier this week. >> so we're going to. >> just see distillation happening left and right. it's already. >> happening like. >> there's so many versions of deep sea. >> that have. >> been reproduced and. >> redone just in the last week as we speak. >> so this distillation is going to just create so much

competition at the llm or the ai layer. >> and so alibaba's new clean model, which it claims surpasses deep sea v3, that is part of this new frenzy post deep sea one that meta, the american. >> open source. >> leader. >> is no doubt already. >> engaged in working on. deep sea is already. >> leading to a. >> reranking in. >> ai. >> leadership, one where the winners will be the companies that can iterate the fastest, making models leaner, cheaper and more accessible. and so. those new export controls, whatever they shape up to. >> be, kelly. >> is going. >> to have to work a lot. >> differently because the race has just totally changed. >> well, you wonder if they're just going to clamp down a lot further and just say, you know, because last time around, i think they said, okay, you can make this high power version for a little while, and then they. >> clamp down on that. and if they. literally just. >> start saying no. >> leading edge chips of any kind from nvidia to china. >> that would be a big deal. >> okay. but but what's going to happen then? >> it's going. >> to actually force. >> china's chip industry. >> to race even faster. >> there's been reports that deep sea is using huawei chips

for inferencing. >> right. >> so the chinese are incredibly resourceful. going back to this phrase, i know everyone's heard. >> a million times. >> this week, but really necessity is. >> the mother of invention. >> the chinese have found ways to work around this. it's hard to think that they won't continue. >> to do so. >> and i will. >> say. like arvind srinivas. >> the ceo perplexity. told us. >> a few. >> weeks ago, the. >> way to sort of beat deep. >> sea is to outinnovate them. >> just continue to compete instead of trying. >> to. >> outlaw some of these. >> factors, although maybe they'll try to do both at the same time. for now, we'll see. >> like you said deirdre. >> thanks, deirdre bosa appreciate it. and meta meantime has been bucking this. >> well you. >> could argue it's benefiting i mean the shares are up about 4% since monday. my next guest is expecting strong results from the company after the bell today. let's bring in mark mahaney. he's head of internet research at evercore isi. mark, a number of people call. >> this. >> stock the single biggest winner from ai. they can immediately implement this optimization into their ad models, make money from it right away. the cheaper it is to run in the long run, the more profitably they can do that,

right? >> i think that's. >> largely true. i think that's why you've had almost a $200 billion gain in market cap for meta. if you go from where they were trading pre-open on monday to where they're trading now, i think the market's kind of correctly seen this. it's been our point of view too. if you're not selling, if you're not trying to monetize directly, monetize or sell lms, if you're if you're not selling the basic infrastructure, then you're buying lms or you're deploying them and you're buying infrastructure. and somebody a year and a half ago, two years ago came across, came up with a great innovation hack in terms of ai. and that's what openai did. and then this last week, we had a company come up with a great efficiency hack when it comes to ai and a way to deploy ai much more cheaply, the more of those that come across, you know, that's the better for those players, especially those big app players like meta. and so, yeah, i do think it's a fundamentally positive development for meta. i don't think we're going to see it show up in its in its its pnl anytime

soon. but the potential is there in 26 and 27. >> it's also a. >> little soon. right? >> i mean, we. >> had tiktok rumors this would cover through the end of december. what they'll tell us tonight. you know, it wasn't until really the last couple of weeks that tiktok went dark and then everyone had to scramble. so how much of an effect or any effect are you expecting them to show from that? what actual do they still report? user growth? what kind of numbers are. >> you. >> expecting there? >> oh. >> low single. >> digit percent user growth. you know you've got three, 3.5 billion people on the platform. it's kind of hard to grow much more than very low single digit percent. where we're expecting to see is one of the fastest growth rates, probably the fastest growth rate that we'll see across advertising. you know, our channel checks were pretty positive on digital advertising kind of across the board in q4, but particularly for meta. so i think they'll be able to print at kind of the high end of the revenue guidance range that they provided, probably 17, 18% year over year revenue growth. now, there's going to be a challenge for them, as it will be for any of these multinational companies because of all of this, you

know, dollar currency headwind, even though that's tapered a little bit recently, it's still a major headwind. and the company is going to give you pretty aggressive, i think capex and capital expenditure and operating expense guidance for the full year. they're unique in doing that. i think it's a great business practice, by the way. but they'll do that. and i think that will probably be a little bit of a hindrance to street estimates off the print. >> let's dwell on that for an extra second because much like previous quarters, the capex number could be what the entire market moves on. so they provide more clarity than others. what do you what do you expect? >> well, i do think it's a great business practice. i think all businesses should do this. look, i don't know. you may not know what your revenue is this next year, but you probably should know what your capex is and your and your expense budget is. so guide us that way and let's see how good you are at it. i think it's great practice that that meta does that. i don't know any other company that does that. so kudos to them. and then i let me rephrase what i said earlier. i think they've actually de-risked this a little bit because zuckerberg told people on friday on facebook that they're going to spend 60 to 65 billion in capex. so they actually de-risk the print. and it's also interesting, they must have known about deep, deep sea. i'm

sure they did. and the efficiency gains that they that they've uncovered there. and yet they're still spending that 65 billion. i just think it gives meta over time the ability to toggle. they can either keep this capex level where it is and they're just going to get a better return on ai roi, or they can lower that over time and have the same sort of model improvements and targeting improvements and user engagement improvements that they've been planning on all along. it's just a great position for meta to be in. >> if you. >> haven't coined that already. >> roi. >> i love it. >> well, we'll coin it right here. >> mark. >> final coin it. >> okay okay. good good. you can get all the all the royalties. final question then is. meta the new google meaning you know, we all talk about how google had maybe the best business model of all time, you know, what was it? what were their margins? i mean, one of the best advertising businesses. we've ever, ever, ever seen. now they're being disrupted by by kind of ai with unclear how they're going to monetize that. and here comes meta with its videos, which might now be the new best way to monetize ad dollars. i don't

know. >> but do. >> you think they're going to start moving to even more of a position of strength there in terms of where ad spend goes? >> i think so. >> i don't know that they'll. >> be the. new google. there's one great thing they both have in common and one major differentiator. the one great thing they both have in common is first party data. look, it's great to have all this data, but if you have first party data like that's all on your network, you have more insight. you can you can, you can attribute ad campaigns much more effectively than somebody who's relying on third party data. google has that first party data meta does too. they have more than anybody else. it's a huge advantage for both companies. the big difference is search revenue, which is, you know, better than any any ad targeting tool ever created. and that's natural on google and has been forever. and i don't think that's going to change near term. there were d.o.j. and ai risks against those, but i think they've been kind of tempered down or moderated down over the last couple of months. i think google has proven that, but we'll still see. that's still a little bit of a question mark, whether meta could really tap into that with this meta ai feature i'm skeptical of, but, you know,

they're rolling it out. there's no downside to this for meta. so it's a great it's kind of an option play for meta. so if they if they're successful there and they can match what google is doing. yes. then this could this will be the next google. >> all right. and again we've seen earnings season for big tech be a huge mover the last couple of quarters. i wouldn't be surprised to. >> see. >> the same now. mark thanks. appreciate it. >> thanks kelly. >> mark mahaney with evercore isi coming up. plenty of. >> fireworks at. >> robert f kennedy jr's. >> out ongoing confirmation hearing for hhs secretary. after the break. we'll tell. >> you. >> what he's. >> saying about his views. >> and look at how he'd fit into the trump administration. >> speaking of the president, shares of trump media. >> are higher. >> after. >> announcing plans to. >> expand into. financial services through. >> investment products and. >> services later. >> this year. remember last. >> week trump. >> criticized big banks. >> for allegedly treating some conservatives unfairly? for the full story. >> go to cnbc.com. >> djt up 7% today. we're back after this. >> techcheck is sponsored by >> techcheck is sponsored by comcast when we started feeding bogie the farmer's dog,

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york's. mid-level appeals court to overturn his conviction on 34 counts of falsifying business records. the notice begins the appeals process in the state. defense secretary pete hegseth revoked former joint. chiefs of staff chairman mark milley and security clearance and security detail. hegseth also ordered the pentagon's inspector general. >> to look. >> into, quote, facts and circumstances surrounding milley's conduct, which could lead to the reevaluation of the retired four star generals rank. a federal judge today sentenced the two businessmen convicted of bribing ex-new jersey senator. >> bob menendez. >> the judge gave businessman wale. >> hanna about eight years. >> in. >> prison. >> while his business associate. >> fred daibes. >> received a seven year sentence. >> menendez is. >> set to be sentenced at 2 p.m. eastern today. kelly, back to you. >> all right. thank you very much. >> now, it's been a heated. >> senate confirmation hearing which just wrapped up for rfk jr. president trump's controversial pick to head the department of health and human services. let's get to some of the highlights with angelica

peebles. i caught the warren exchange earlier. angelica. yeah, kelly. >> it's actually. >> still underway. >> but. >> you. >> know, so far. >> what we've seen. >> is that rfk jr. >> is defending his record and. >> managing to stay on message. >> he's saying that he's. focused on. chronic disease. >> and that's what president. >> trump hired. >> him to do make. >> america wealthy again. now. >> senator biden zeroed. >> in on. >> rfk jr. >> s anti-vaccine. >> history. >> attempting to, quote, blow the whistle. >> on what is. >> really are. >> i support the measles vaccine. i support the polio vaccine. i will do nothing. as hhs secretary, that makes it difficult or discourages people from. >> taking it. >> anybody who. >> believes that ought to look at the measles book. >> you wrote. >> saying parents. >> have. >> been misled. >> into believing that measles is. >> a. >> deadly disease. that's not true. >> dems hit him hard on vaccines. >> and abortion. and they. >> used his past. >> statements such as. >> quote, i. >> don't think the government. >> has any. >> business telling people. >> what they can. >> or cannot do with. >> their body against. >> him, to try. >> to show that.

>> he's flip flopping. >> to. >> get this job. >> he repeatedly said that. >> quote, every. >> abortion is a tragedy. in response to any attempt. >> at. >> diagnosing what he might do and believe as. >> hhs secretary. >> but he did. >> seem confused on the details. >> of medicaid. >> that's the program that. >> insures 79. >> million people. and the difference between. >> medicare. which covers. >> 68 million seniors. >> he criticized. >> medicare premiums. >> and deductibles. >> as being too high. but in reality, those. >> don't really exist. >> in medicaid, states can only charge limited. >> premiums, and his lack of knowledge. >> on that. >> topic topic is definitely one of the. >> biggest. >> surprises so. >> far that i've. >> heard about kelly. >> all right, angelica, for now, thanks very much. angelica peebles. speaking of medicaid and confusion, the omb just. rescinded the federal funding that was freeze that was put into place yesterday. >> my next. >> guest says it had. >> every agency erring. >> on the side of caution. so what happens now? let's bring in td cowen, washington research groups chris krueger, chris, a breathtaking 24 hours here. what's the latest? where does this where does this leave things. >> great question. i don't think anyone really knows. so the

executive order that was issued by omb was rescinded, you know, ten minutes ago, the judge, a federal judge, had halted the order, which effectively, you know, it was basically a 24 hour. quasi government spending shutdown. >> this the. >> overall framing issue, though. >> here is. >> the question of impoundment. does a president. >> have the. >> ability to not spend dollars appropriated by. the congress? >> this started. >> you know. >> this. >> is not. >> a new issue. >> this is this. >> started with with. >> president jefferson. >> in 1801. >> the process was made unlawful in a 1974 act that trump. >> and a lot. >> of his advisers. believe is unlawful. so this issue, it's probably. >> the. >> end of the beginning. >> the supreme. court will. >> probably weigh. >> in on. >> this at. >> some. >> point. but we're. >> you know. >> as of, you know, ten minutes ago, the federal. >> spending freeze has.

>> been halted. >> does that mean that the sort of job what are they called by buyouts, the voluntary job cuts? was that part of this or was that a separate issue? >> separate issue. >> the federal. buyout to also unclear. >> the legalities surrounding that. tim kaine. >> democratic senator. from virginia. where a lot of government. >> federal employees. >> resides, suggesting that that's not legal. >> that is. >> also probably going to be litigated. >> you know. >> this is definitely a bull market for lawyers. we'll see where that shows up. but that was. >> a separate order. >> okay. >> so basically. >> this is more narrowly about the federal funding freeze. if it did go forward what exactly was it and would it affect medicaid disbursement and so forth? >> well, it was a two page.

>> memo. >> and the. u.s. government. >> spends about. >> $7 trillion. >> a year the way it was crafted. >> and again, you know. >> the agencies. >> were erring. >> on the side. >> of caution. >> you don't want. >> to go against. a directive from from. >> the omb. i think the my suspicion, our suspicion is. >> initially this. was largely about. >> grants and loans. >> and seeing. >> if those. >> federal funds. >> sort of ran. >> afoul of. >> president trump's. >> you know, vision. for. >> america in the executive order. >> they they highlighted a lot of the dei efforts. >> and others. >> but the way it was. >> worded, you know, the. medicaid system, the online. >> medicaid system. >> shut down. >> right? >> because let me. >> just pause you there, chris, for a second. i've seen the same thing in the headlines. even when this was rescinded, it said, you know, omb rescinds, you know, order to freeze grants. and i thought, well, okay, that doesn't sound like that big of a deal, but why is

this order to kind of freeze grants, which is now been rescinded, shutting down things like medicaid? >> well, you know. >> because it was you know, it's a two. page memo. it was very. >> broad and. >> it just people didn't. my suspicion. >> is a lot of these. agencies didn't. >> really know. how to. >> interpret it. and typically they you. >> know. >> they. >> just they just freeze. i think another complicating component of this too. >> is that a lot of. >> president trump's appointees are. not in these agencies. >> yet. only a. >> handful of cabinet secretaries. >> have been confirmed. we're still very early days. so it was. just sort. >> of. >> mass confusion. >> which is. >> why i. >> we do think this. >> is sort. >> of not the. the you. >> know, this isn't this will return. >> in some capacity. >> russ vogt, who's been. >> nominated to be the omb director, should be confirmed probably by by. >> next week. so, you know, stay. >> tuned on. >> on further developments here. >> but the bigger.

>> picture the federal government runs. >> out of. funding on. >> march 14th. we have a debt ceiling issue this year. democrats are. >> going to be needed for both of those measures, along. >> with california. >> wildlife relief, etc. so. >> you know, i think congressional democrats had. >> largely given trump. >> had, you. >> know. >> hadn't really pushed back too much on. >> the. >> incoming administration. and a lot of democrats have referred to this as a. constitutional crisis. so i think march 14th will be here sooner, maybe. >> than than folks want it. >> to be. >> and that. >> could be a real issue. >> yeah, it's a. preview of that larger fight. and maybe, you know, the ongoing fight that we're going to have all year long. chris, thanks. appreciate you helping to clarify some of this. chris kruger joining us from td cowen today as we head to break, take a look at shares of starbucks, which are doing quite nicely. >> wouldn't you know 52 week. >> high. >> after those earnings yesterday. >> they did beat their global. >> comp sales were worse than expected, were less bad than expected, although china. >> was still. >> weak, down 6%. >> and the average. >> ticket down four. the ceo

acknowledging the headwinds. >> on squawk on the street today. >> by the way, starbucks is now up 8%. here's what brian niccol had to say. >> there are some challenges right now from a macro standpoint, but i also think there's a real opportunity for starbucks to continue to own the premium coffee experience, that third place experience, and then also do some things as it relates to menu management, pricing architecture, some pricing, or, i'm sorry, menu innovation. just to make. sure that we have the right products for the customer in china. >> brian tried to stop you from switching to cuba. >> missus sir. she's not a friend. >> sara. >> brian. >> so i was right about cuba. >> tell me. >> what do you. >> like most about their ai powered total spend management platform ai. >> that predicts, prescribes and automates direct. >> and indirect. >> spend management. >> you know, i like how coupa helps us mind our business. >> that's interesting because you seem. >> to have. >> a hard time. >> minding your business. your shoes. >> are too. >> big.

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>> it's earnings exchange time and. >> when better to do it? i mean. >> the. >> biggest of the big start reporting after the bell today. also caterpillar we've got to watch that in the morning. international bellwether microsoft tesla and cat are the subject of today's earnings exchange. we're going to ask about nvidia i keep saying netflix when i mean nvidia. anyway tim seymour is here and he's the cio at seymour asset management and a cnbc contributor. it has been a very newsy hour tim. let's just start with microsoft to kind of set the scene. i'm glad you are here. piper sandler expects accelerating azure workloads. they are warning about losses from open ai and fx headwinds. those could weigh on results. what is your take here ahead of the print? >> i you know, if you're worried about fx headwinds when you have big secular trends here, i think that's, you know, a nonevent, i

think the. open ai losses. >> are going to have an. >> impact on eps. look for a company that's not cheap at 35 times forward, you care about the eps number and the valuation. but i think azure is what it's all about. i mean, this has been the meal ticket over the last five years. this is a $12 billion business in 2020. i think they're going to be probably a $100 billion business by 26. so this is double digit growth as goes azure i think as goes microsoft. but but obviously this has been an ai story. and i will say that we have to remind ourselves that this is possibly, you know, a $10 billion revenue ai story. and that's something that's going to continue to grow with significant delta to it. so that's the reason that i think microsoft, relative to the group, the groupnghe mag seven stocks looks really interesting here. it's not cheap, but and i can't i'm not going to make a call on the market here. or maybe i'll do that on fast money at some point. but you know it's really more about microsoft relative to the group. i think the earnings

power here is awesome. >> let me just sneak in a quick mention then while we have you about nvidia. so again, would it represent a big earnings revenue headwind for them. if the government clamps down further on their china sales? >> yes and no. i mean remember we've done the calculus on china and nvidia and what it's meant and where those export controls already were an impact. i think the bigger issue is the i wouldn't say it's existential, but what we had with deep tech over the last few days is one, where are your biggest customers? has everybody overspent for capex, etc. that that's the story with nvidia. it's less to me about export controls in china. i'm sure the company is going to say and do and feel that they want to do everything that's on the right side of that. i'm less worried about that. >> all right. let's move along to tesla then, because, you know, this is always a hard one around earnings because they seem to move on. not really earnings. related stories but they will have their delivery forecast any new projects. or services. how musk's government role could impact his work at the company if it's diminishing that somewhat, what do you do

with the stock here? >> it's always a fascinating earnings release. it's always a fascinating call. again, elon, on this call, first time post-election post, doge post everything. there's a lot to listen into, including ev credits. and if he expresses a view on that because that's another big story in terms of demand, i think the units delivery has been kind of makes this a bit of a nonevent. we've gotten some of those numbers. i think it's about gross margin. and again, that's a function of everything from ev credits to demand to pricing and the competitive landscape. and yeah, a world where china is a big deal and where they care a lot about that. and it hasn't been a great time in china. so for a stock that even after a 20% pullback to where we're trading today from the recent highs, it's up 180% since last spring. i mean, you know we know what's going on with the stock. it's not cheap i think today's earnings release is more about the insight into key issues for the company and that gross margin. >> yeah. and again like any kind of insight as to you know, how his role, you know, might affect

the china sales so much more. we'll see if we get some good color on that. which brings us to caterpillar which is always worth watching. i don't know if it would move, you know, the whole market, but for everyone trying to figure out earnings trends for the whole year, things like that. tim. just the health of the global economy. tariffs by the way. you know there's a lot of that that could be in the mix here. the stock you know it's up 30% over the past year. so no slouch. what are you thinking. >> yeah. no this is i mean this seems pretty darn boring and terra firma relative to the other two. but but that may be what works at some point in 25. and we started to see some of that. by the way, certainly the broadening of the market, the equal weighted part of it and the dow itself outperforming. i think it's a story of that second derivative of less bad in 25 for the. construction stocks. and that means we're going to see construction fall a bit in the us and europe and in china. this isn't the backdrop that you're getting excited necessarily about the top line, but it is a case where i think the comps get a lot better. the valuation, it's probably two turns cheap to it's historic. i

kind of like caterpillar here. i think it's a second half story. when the comps get very you know they get easier. >> all right. >> 18 times forward i just like that you said terra firma that to come up with that i mean that was that was very good. >> i said i had to sit in a parent's day for my parents, my kid's latin class today. did you you know. yeah. i mean. and it's the teacher will be happy to know. i quoted him on cnbc. >> fantastic. >> do you want to make a quick final call about the fed? >> well, i think this is a less if the other if last meeting was a hawkish cut. this is a dovish pause. and i think we've gotten whether it's wall or whether we've gotten whispers i think the fed has to indicate tariffs. and that will be something that at least will give them the ability to be more dovish. >> tim seymour thank you sir seymour asset management and that's it for us. six minutes to go. thanks for. watching the exchange. we'll pick up our coverage of the fed rate decision. >> after this. >> is this how you're hoping to retire. >> well hope isn't.

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right now ahead of the federal reserve. the dow's down 70 points. that's a whopping 0.1%. the nasdaq though kelly continues to be the story nvidia we'll get more on that down again nasdaq down 8/10 of 1%. the yield on the ten year treasury note. again this could all move on the fed i don't think we will see a big move. >> but you never. >> know 4.56%. >> we'll see if we get that dovish pause that tim seymour was looking for last hour. and as brian mentioned take a look at shares of nvidia taking a dip lower today and right near session lows. after reports. last hour that the trump administration is considering restricting its exports to china. nvidia shares are down more than 6% now and that's exerting that extra pressure across the nasdaq. >> all right. so that is all. >> coming up. but let's. >> right now get to your big fed panel with some of the brightest names on wall street, david kelly of j.p. morgan asset management, stephanie roth of wolfe research and. >> jim. >> caron of. morgan stanley investment management. david, it's been like seven years. we've talked. so i'll. >> start. >> off right with you. what do you expect from the federal

reserve today? well, no change in rates. and i think they're going to try really hard not to attract any attention. i mean, the economy is pretty strong. inflation is still on the high side of 2%. the unemployment rate is low and stable. so there's absolutely no reason to cut rates at this point. but they don't want to get get pulled into a conversation. >> with the. >> administration on rates. so i think they're going to say no change and they're going to say it as quietly as possible. okay. now i don't know what we're going to talk about for the next half hour. i'm kidding, stephanie wolf, i mean, would you agree with that? and if so, what what. will then the fed headline be? because the fed does nothing and says nothing is not really. >> a headline that. >> we want. >> to have. >> yeah. >> totally fair. and i very. >> much agree with. >> david that. >> we're likely. >> to see. >> hopefully nothing. it should be a quiet meeting if all goes according to plan. for powell. the things that will come up as a potential headline are how the fed is looking at tariffs. are they going to going to see through it like they talked about in the september 2018 book, or are they going to have to react in a more hawkish way,

which was a negative one for markets. and then of course, how are they going to be thinking about immigration? now? trump has already announced some policies that are going to be reversing what biden had put in place in terms of immigration. so we're going to have a reduced labor labor supply. so how is the fed going to be thinking about that? is that going to be factoring in a potential for a lower unemployment rate and some upward pressure on wage inflation? >> yeah. so david thinks we could be on hold indefinitely. stephanie, you've gone to one cut from two. jim, you think, well, what do you think? >> so. >> so i think it's somewhere between 0 and 1 cut this year. look, for me, it's. >> always about the labor market. and i'm being. >> i'm surprised. >> at. >> how strong the labor market's been. so i'm looking for hints from the fed. how seriously are they taking. >> this. >> recent data in the. >> labor market which has been very, very strong. and how much are they extrapolating that. >> into the future? >> or was this. >> just a one off? the other thing. >> i'm going to look at. >> for the fed. >> is. >> is how. >> serious are they about getting. >> to that 2% target inflation? or could they live with somewhere around 2.5%? and is that. >> good enough?

>> right. and as we all know, that makes a big difference a little bit over time. and also in terms of what they decide to do on it. so we've got the pre market set up and. a dovish hold maybe might be the consensus maybe a cut or two. and as we just heard jim's between 0 and 1 cuts for the year brian. yeah. >> and right now let's get. >> to steve. >> liesman and the fed's decision and call on rates steve why does the federal reserve maintaining the funds rate in the range of four and a quarter to 4.5%? they did say that inflation remains elevated as it had last time. but they crossed out a line this time saying that inflation has made progress towards the 2% objective. 100% sure what that means. perhaps we'll ask powell about that. is that hawkish or just. getting rid of a tired old phrase? they say labor market conditions remain solid. they had said that they had eased, so they did an upgrade of the condition of the labor market. also noting that the unemployment rate has stabilized at a low level. the economy, as they said last time, is expanding at a solid pace. the