Returning to Washington, Oil Prices Moving Higher, Futures Point To Lower Open 6/17/25
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A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities.

and even another passenger. We're three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones, member SIPC. I'm Frank Holland, and you're listening to CNBC's Worldwide Exchange. Our show is live weekdays at 5 a.m. Eastern. Listen in.

Right now, the president expected to arrive back here in the United States, leaving the G7 conference just a bit early. Some new headlines crossing saying the president's looking for better than a ceasefire when it comes to the Iran-Israel conflict. Again, reports have him heading straight to the Situation Room. Again, the president's saying he's looking for something better than a ceasefire, according to headlines just crossing.

This morning, we're also watching oil prices continue to climb with the violence between Israel and Iran continuing. You can also see that's pushing futures lower this morning. It is Tuesday, June the 17th, 2025. And this is Worldwide Exchange on CNBC and streaming on CNBC+.

And good morning and welcome to Worldwide Exchange. I'm Frank Holland. Thank you so much for being here with us. Let's get you ready for the trading day ahead. We begin with the U.S. markets and we are on record high watch with the S&P just about one and a half, two percent away from an all time high. You can see it right here. One point eight six percent. The Nasdaq about two and a half percent from its all time high. We continue to watch for these record highs. It could happen in one day. We've seen some big upside moves in recent weeks.

But first, we're going to take a look at the pre-market laggards and leaders. Let's start with the laggards first. Taking a look at those, we're seeing Enphase Energy right here at the top of the list pulling back more than 16%. First, Solar pulling back more than 9%, followed by T-Mobile, AES, and NextEra Energy. Then the other side of the coin, the S&P 500 leaders. Looking at those this morning, you see right here a couple

of defense names here on the list. Northrop Grumman right here at the top of the list. Those shares up two and three quarters of one percent. RTX down here. We're going to be talking about this stock later in the show. Bit of a spoiler coming up later in the show, up about one and a quarter. Also, Halliburton shares up almost one and a half percent right now in the pre-market. This morning, we're also watching oil prices and the impact of the Israel-Iran conflict, at least on the minds of investors. Some new reports this morning that an oil tanker in the Strait of Hormuz

A crash there that was due to a navigational issue, not a not due to the conflict between Israel and Iran. Also, the IEA out with a report this morning. Their forecast is that oil supply will outstrip demand in the near to medium term. But right now, take a look at oil prices.

You can see they are higher right now. WTI and Brent crude both up right around one and a half percent. Natural gas also up about one percent right now. Looking at gold, the safe haven pulling back just about a percent yesterday, perhaps signaling that investor concerns about the Middle East. They are beginning to ease at least somewhat. This morning we're seeing gold pull back again, pulling back just about a half a percent. But take a look this week. Gold up over one and a half percent.

And also this morning, we're watching bond yields head of the start of the Federal Reserve meeting. No rate cuts expected. Yesterday, we also saw a 20-year auction that our Rick Santelli gave a C-plus for demand. Taking a look at the 20-year, we don't often show it. Right now, that yield at 4.95%. The benchmark at 4.43%. Also looking at the two-year, well below 4% right now, 3.95%. Not well below, but about five basis points below the long bond at 4.94%.

We also want to take a look at futures. We skipped over them just a bit earlier, but important to show you the futures right now. You can see futures right now. They're about a half a percent lower across the board. The Dow looks like it would open just about 200 points lower. OK, that is your setup. Now turning to the latest on the Israel-Iran conflict.

President Trump just landed in Washington after departing the G7 summit in Canada. Israel and Iran, they continue to attack one another with that conflict now on its fifth day. As we're watching the president just arrive right now at Andrews Air Force Base, we're going to toss things over to NBC's Alice Barr in Washington with the very latest. Alice, right now we're looking at the president's plane landing again back here in the U.S.

Yeah, Frank, and I think that image right there says a lot. The very fact that President Trump chose to leave the G7 a day early underscores just how serious this moment is and the escalating conflict between two major Middle East military powers, Israel and Iran. Speaking to reporters aboard Air Force One just a few hours ago, President Trump said that he wants more than a ceasefire, but

between Israel and Iran. He said he wants a real end with Iran giving up entirely on its nuclear program. He also said the Israelis are not slowing up in their attacks on Iran and said they're going to find out over the next two days nobody is slowing up. He called for the National Security Council to be ready in this situation room, according to an administration official. So we're expecting as soon as he de-planes, he's going to be heading straight into that

room as he weighs whether to help Israel in its mission, essentially, to destroy Iran's nuclear program targeting those deep underground enrichment sites or to keep pushing for a diplomatic deal to stop Iran from developing a nuclear weapon.

President Trump posted on social media that Iran should have already signed a deal, adding, quote, everyone should immediately evacuate to Iran. He did not offer further explanation and was asked aboard Air Force One for his thinking on that. He said he just wants people to be safe. He also sounded undecided about whether he's going to send some of his envoys, including Vice President J.D. Vance, to meet with Iran. He said maybe depends on

on what happens when he gets back and was adamant that Iran knows not to target any U.S. military troops or installations anywhere in the region, saying the U.S. would come down so hard if they did anything to our people.

So this is, of course, a rapidly developing situation. There are questions about just how far the U.S. is willing to go. And, of course, everyone's waiting to see what comes next. Yeah, Alice, of course, we're still looking at the president's plane here at Andrews Air Force Base, getting some other headlines literally while you were talking. The president clearly in a very talkative move on that plane, saying he's not much in a mood to negotiate with Iran. Also, as you mentioned, saying he may send the vice president to negotiate with Iran.

So a lot of talk here from the president about what's going on in the Middle East. He also added that pharma tariffs could be coming very soon. With that, we're going to switch things over. Before his early departure from the G7 summit, President Trump and British Prime Minister Keira Starmer announcing details of a trade agreement between the two countries, tariffs clearly on the mind of the president.

For more on that and the European market reaction, let's go to London and our Steve Sedgwick. Steve, good morning to you. A lot of talk for the president about what's going on in the Middle East and tariffs. Give us the latest on what's going on with this conversation when it comes to the U.K. and the U.S.

Yeah, just adding on what Alice was saying, what you've just been saying, one of those talkative Trump tweets you just mentioned says that the EU is not yet offering a fair deal. So an ominous comment there, given the fact that he had his first bilat with the leader of the commission, that's Ursula von der Leyen, in the last 48 hours. Anyway, the good news is Donald Trump has signed an executive order reducing tariffs on some UK exports immediately.

into the United States, confirming parts of the deal that was announced between the two countries last month. UK auto and aerospace companies, they are definitely the big winners, with the tariff on the first 100,000 vehicles shipped from the UK slashed. Truth be known, that is most of the vehicles that we actually sell to the United States. And the levy on jet engines, which is mostly Rolls-Royce, let's be brutally honest about it, the levy on the jet engines and other aviation components

have been scrapped. Now, we look at the FTSE here. It's still down. It's down 0.4 of 1%. But the reason why it's not down as much as the rest of the European markets, and I can show you the rest of the European markets now as well, is because we have the oil majors. You've got Shell, you've got BP. And of course, the oil price is going up on the back of those concerns that Alice and you were just talking about.

the top of the show. So the FTSE gets a bit of a pass on some of the downtick. It's the only sector up, I can tell you. That's the oil and gas sector. That aside, we've got declines across the board. The worst hit, the Italian market, you can see just there, the FTSE mid trading down 1.2%. I'll show you some sectors quickly. One sector in positive territory last time I looked, that is the oil majors.

There you go. Up 0.9 of 1 percent. Autos just clawing themselves back into positive territory. And I'll finish on the losers for you as well as I hand it back to you, Frank. The losing sectors look like this. Back to you. Steve Sojic live in London, by the way. Great interview with the Joby CEO. Very provocative questions there. Definitely a must watch interview. Steve Sojic live in London. Always good to see you.

All right, turn our attention back here to the U.S. in addition to that U.K. trade deal and the very latest developments out in the Middle East. Investors also watching the Fed as it kicks off its latest two-day policy meeting today. The central bank is expected a whole rate steady for much more. Let's bring in Mark Hackett, chief market strategist.

for Nationwide Investment Management Group. Mark, good morning. Great to have you back. Thank you. I think the question I want to ask you about oil. Oil prices up higher right now. A lot of questions about what's going on in the Middle East. They did pull back a bit yesterday, but higher again this morning. What does that say about investor sentiment when it comes to Middle East risk? Well,

Well, I think a lot of what's happening right now is all about investor sentiment. Oil is one of the factors here, but only one of them. The fact that we're not seeing aggressive movement in the oil prices, yes, we're seeing them up a little bit, but really not to the degree you might think, given the level of disruption we had. That's a consistent theme that we've been seeing, which is

The market is still reactive to news, but not emotionally so. A month or two ago, it was much more violent. Now it's actually a little more subtle. But in all fairness, this is actually buy the news. Instead of, you know, buy the rumor, sell the news.

And also seeing some defense names higher in the pre-market. We're just showing some of the S&P pre-market leaders, RTX, Northrop Grumman, also Halliburton. What does that say in your mind about how investors are trying to play this? Is that a defensive trade to go into these defensive defense names? I'm kind of mixing the two terms up, defensive trade and also defense stocks. But is that a defensive trade or is that just a trade where you see a lot more upside considering all the geopolitical uncertainties?

Well, I think part of it is they came from a much lower level. So the fact that we're seeing oil stocks and defense stocks, we hadn't seen them run the way, for example, like we've seen the technology stocks. But this, I think, is much more of a knee-jerk reaction to the news cycle. Historically, we've seen these one or two or one week cycles.

moves like this, they tend not to be longer-term impacts. But in all fairness, the ITA did hit a recent all-time high, I think a couple of days ago, before this actually started. It actually hit a couple of highs in the build-up to this. And we do see the EU spending more in defense and other things like that. So you're saying this is more of a knee-jerk, more of a trade than an investment in the defense space? Well, the last week has been.

But I think in general, we've seen the trends have been, you know, whether it's the discussion in D.C. or, as you said, the discussion broader in NATO. I think this the secular trend is supportive for those stocks. But then obviously you get weeks like this where you have a little bit more knee jerk.

All right, something else to talk about here, the XLK, the tech ETF, really dominated by mega cap tech. NVIDIA, Microsoft, and also Apple are about a third of that ETF hit an all-time high yesterday. Some other components like IBM and Palantir hitting all-time highs. What do you make of that tech trade right now? Is that a place where you see more upside considering all, again, the uncertainty?

I think a lot of it is when the technical rallies happen, investors tend to gravitate towards tech. So in general, tech's been defensive as well. So in bad times, we've seen tech work. In good times, we've seen tech work. But generally, when you get through the more technical rally like we've seen over the last two months, you're going to need to start looking to fundamentals. And frankly, the valuations there are very extended relative to some of the value sectors and international, for example.

What about the dollar? This is more of a long term question. Obviously, right now we're seeing some disruptions due to geopolitical uncertainty, but we've seen continued weakness in the dollar. What do you think that means for the market going forward? If it's a multinational, it's great for earnings. But if you're a small cap or more domestic focused company, it's not as great.

Certainly, we've seen that. We've seen the small caps underperform again, frustratingly so, frankly, for those of us that they're looking for that to start working. But, yeah, the dollar has been actually beneficial for earnings. We've seen earnings for the S&P 500 start to stabilize expectations for 2025 and 2026. A lot of that due not only to the competitive advantage for a weaker dollar, but also the translation you get back is an automatic benefit.

benefit to earnings. Worry that the dollar might weaken to a point where it's not beneficial because the president again saying he's going to send out letters for tariffs, saying pharma tariffs are on the way. That seems to negatively impact the dollar. Are you concerned about is there a level where the dollar can fall to where it's actually not great for earnings and not a tailwind like it has been? I think it's much more of why the dollar is weakening than it is the dollar weakness itself.

If the weakness in the dollar is because foreign governments are selling treasuries in order to support their own governments, or if it's some sort of punitive action, that certainly isn't good news. But if the dollar is weakening a little bit here, remember, we were at very elevated levels a year or so ago for the dollar. So a little bit of weakness.

is actually not a terrible thing for earnings and also might be a reflection of the relative balance between domestic earnings and foreign earnings is starting to level out. Mark Hackett, always a pleasure to see you. Thanks for coming from Philly and just a cool head for all these Wall Street types getting too excited. Mark Hackett, always great to see you. Thank you.

Thank you. All right. A lot more to come here at Worldwide Exchange, including the one word that investors have to hear today in the stock pick that every investor needs to know. But first, much more on President Trump's return to Washington just minutes ago. He has said he has something much bigger than a ceasefire on his mind when it comes to the Israel-Iran conflict.

Plus, energy leaders keeping a close watch on the Middle East. CNBC is talking exclusively with the CEO of Shell and what the war means for his company's operations. And then later, the Senate getting the ball rolling on its version of Trump's mega bill. Details on where lawmakers will be at with the odds, be at odds with their House counterparts. Worldwide Exchange coming up in just two minutes.

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All right, turning back to energy, we continue to watch the latest developments out of the Middle East as the Israel-Iran conflict. It continues to fuel supply worries, that conflict likely on the top of minds for energy leaders that are gathering in Malaysia for this year's Energy Asia Summit. Our J.P. Ong is there talking to those industry insiders and joins us with much more. J.P., good morning.

Good morning, Frank. And as you can imagine, in day two of the Energy Asia Summit, the discussion continues to be that dark cloud of uncertainty being cast over the outlook for global energy demand, cast by the growing conflict between Israel and Iran. We've seen it manifest with regards to how price shocks and how price volatilities have started to roll out in Brent crude futures so far. And it is something that everybody and a lot of the industry executives are watching out for. We did get to speak to Shell CEO Wael Sawan earlier on today.

to get his take on this and on what's unfolded. And we also asked him as to whether or not this is starting to remind him of some of the volatility that was brought on by the onslaught of the Ukraine-Russia incident that also saw similar volatility really rock price markets. Here's how he's treating things and why he's reminding us that volatility is something we might have to deal with for the time being. For the last...

Let's say two years we've been talking about this sort of volatility amidst the geopolitical uncertainty. Of course, you have Russia-Ukraine that is still a heavy element in that. Now you have the escalating tensions in the Middle East. You have the geopolitical tensions between West and East. And all of that continues to play.

Again, what we try to focus on is very much what we can control. And when we look at things like investment opportunities, we have to look at 10-plus year windows. I mean, these investments are very long cycle investments. What we do also focus on is making sure that we have resilience to the uncertainty.

And really focusing on this volatility brought on by geopolitical events that are really outside of their control is something that really will perplex perhaps a lot of these industry executives here. One thing that Total Energy CEO Patrick Pianet also told us earlier on is that if we see an even bigger shock via an attack on more critical infrastructure in the Middle East or in the Gulf region, that could send even bigger price shocks that they'll have to deal with. And again, just showing you why this is top of mind for many executives here at the Energy Asia Summit in Kuala Lumpur. Frank, it's back to you.

Great reporting as always, JP. Right now, watching oil prices up more than 1%. Our JP Ong live for us this morning with the very latest from the Shell CEO. Thank you very much. Great to see you. Still on deck here at Worldwide Exchange. Shares of T-Mobile under some pressure as one high-profile investor pulls back. We got all the details on Worldwide Exchange returns. Shares of T-Mobile pulling back just about 4% right now.

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And welcome back to Worldwide Exchange. Let's get a check on some of this morning's top stories. Bertha Coombs is here. Bertha, good morning. Good morning, Frank.

OpenAI has won a $200 million contract with the US Defense Department. The department announcing the one-year contract for the company to provide it with AI tools. And the development comes as the Wall Street Journal reports that tensions between OpenAI and Microsoft are intensifying. The journal says OpenAI wants to ease Microsoft's grip on its AI products

and resources and secure the tech giant's approval to convert into a for-profit company. But the talks between the two have become difficult recently.

Meantime, Eli Lilly is in advanced talks to acquire gene editing startup Verve Therapeutics, according to the Financial Times, which puts the price tag of a potential deal at $1.3 billion. The FT says Lilly is aiming to strengthen its pipeline of experimental medicines and that the deal could be announced as early as this week.

And SoftBank unloading more than 21 million shares of T-Mobile, raising $4.8 billion, according to a term sheet reviewed by Reuters.

Ahead of that sale, the Japanese company owned just over 7.5% of the mobile carrier's shares. SoftBank remains T-Mobile's second largest shareholder now after that stock sale. Shares of T-Mobile under pressure this morning ahead of the open. Frank? All right. Thank you, Bertha. We'll see you a bit later in the show.

And as we had a break, a check on shares of AMD coming off a nearly 9% jump yesterday on the back of a Piper Sandler price target hike. Shares right now just up very fractionally, week to date up just about 9%. Piper Riding expects a snapback for AMD's GPU business in Q4. We'll be right back after this break. I'm in constant touch. And as I've been saying, I think a deal will be signed or something will happen, but a deal will be signed. And I think Iran is foolish not to sign one.

That was President Trump on the sidelines of the G7 summit yesterday, talking the ongoing violence between Israel and Iran. The president arriving back in Washington just moments ago, reportedly requesting the National Security Council be prepared in the situation room for his return.

Welcome back to Worldwide Exchange. I'm Frank Holland. Coming up, the latest on the continued tensions in the Middle East, the president's latest comments, and the options he has to try to de-escalate the situation. But first, we're going to get you ready for the trading day ahead. We begin with the U.S. markets. They are currently on record high watch with the S&P

Just about 2% away from its all-time high, about 1.8% right now. The NASDAQ just over 2.5% or right around 2.5% from its all-time high. Quick look at futures this morning. Taking a look, we're actually seeing futures pull back a bit, down about 0.5% across the board. The Dow looks like it would open.

About 250 points lower at this hour. Also looking at small cap futures right now. Small caps, they gained more than 1% yesterday. This morning, you can see they're pulling back nearly 1%. Bit of a reversal from yesterday to the futures today. We want to take a look at the NASDAQ 100 laggards and leaders in the pre-market as well. First, the laggards you can see right here at T-Mobile. You can see those shares pulling back about 4%. The biggest laggard in the NASDAQ 100 we mentioned yesterday.

A share sale by SoftBank, a catalyst for that stock move. Strategy lower, Bitcoin lower this morning as well. Microsoft down about 1%. Trade Desk also down about 1% on some news. The meta would look to add ads to WhatsApp, perhaps putting some pressure on their business as well. Then the other side of the coin, the NASDAQ 100. Leaders, you're going to see a couple energy names up here. Diamondback Energy and Baker Hughes up here on the list. Diamondback up about three quarters of 1%. Baker Hughes up about two thirds of 1%. Palantir, defense name,

also up about three quarters of one percent. We're also watching oil prices and the impact of the Israel-Iran conflict on the minds of investors. WTI making an upside move in recent days. Right now, you see WTI up about one and one third of one percent right now, off of its highs of earlier, but still higher. As you can see, Brent crude up just about one and one third, almost one and a half percent. Natural gas up over one percent right now as well. Also looking at gold, the safe haven pulling back about a percent yesterday, perhaps signaling

Investor concern about the Middle East is easing at least somewhat. This morning you're seeing gold pull back just about a half a percent, but week to date still up about one and a half percent. Also looking at the tech trade this morning, the XLK ETF hitting an all-time high. A number of holdings also hitting all-time highs, including Microsoft, IBM, and Palantir, all three of those hitting all-time highs.

The XLK year to date, you're seeing some of the winners here. Jabril, those shares up about 26.5% down there. NVIDIA shares, maybe surprisingly, NVIDIA shares up just over 7.5% year to date, but one of the top holdings in the XLK. Also looking at bond yields this morning ahead of the start of the Federal Reserve meeting. Again, no cuts expected.

Also, we saw a 20-year auction yesterday. Our Rick Santelli gave a C-plus for demand. Quick check of the 20-year. That yielded 4.95. Again, C-plus on demand, according to our Rick Santelli. Also looking at the benchmark right now at 4.42. Okay, that is your setup. Now we want to turn our attention back to our top story.

and the latest developments in the Israel-Iran conflict. President Trump touching down in Washington just moments ago after departing the G7 summit in Canada overnight. Our Megan Casella joins us now in Canada with the very latest from his early exit from the summit. Megan, good morning.

Good morning, Frank. That's right. It was a surprise departure for the president from Canada late last night. We did not expect him to leave until the end of the day today. He had a whole host of bilateral meetings scheduled, as well as a press conference tonight. Scrapping all of that in order to leave early to get home, we are

We're also just in the last few minutes, Frank, getting some audio from the president talking with reporters overnight about 1:00 a.m. Eastern on Air Force One, that audio just coming through now that they have just landed. The most news that he made was, of course, on Iran. The top headline is that the president told reporters, we are looking for better than a cease-fire in Iran. He went on to elaborate that would mean a -- quote -- "real end" to the conflict.

He also had posted on social media that his leaving certainly had nothing to do with a cease-fire. He said it was much bigger than that. He also told reporters he reiterated that Iran cannot have a nuclear weapon. He said he may send his vice president, J.D. Vance, and his Middle Eastern envoy, Steve Witkoff, to the Middle East to meet with the Iranians, but he was noncommittal on that. Not clear at this point if that meeting would be happening. And then he also just posted in the last few moments on social media as well that he has not reached out to Iran for peace talks.

in any way. So a lot of moving pieces here on this, Frank. And I will just say that the news, as I said, was a surprise departure. We didn't expect him to be leaving until his press secretary, Caroline Leavitt, posted on social media late last night just before the dinnertime here, saying that President Trump had had a great day at the G7, even signing a major trade deal. But the president later said it was easier to be in Washington than in Canada, so that he didn't have to rely on phone calls to know what was happening.

Frank. Yeah, Megan, certainly a lot of moving parts. You're doing some great reporting from the sidelines of the G7. I want to go back to that post from the president posted just about 10 minutes ago. He goes on to say, you just mentioned it. I have not reached out to Iran for peace talks in any way, shape or form. This is just more highly fabricated fake news. If they want to talk, they know how to how to reach me. They should have taken the deal that was on the table.

I'm sure there's a lot of discussion about Israel and Iran there at the G7. Did you hear from any other either leaders or members of the administration just about these talks that the president is talking about and the idea of a deal that he's now saying is completely fabricated?

There has been a lot of discussion, Frank, but it's been hard to parse out what's real and what's not. It was the French President Emmanuel Macron that first said the president was leaving, President Trump was leaving to deal with a ceasefire and to try to arrange one. That's what the president was pushing back on when he said it's much bigger than a ceasefire. Macron was wrong about that.

So there's been a couple of instances of that where we hear one thing and then we hear the president, the U.S. president, say something else. The Europeans have been fairly unified in this and wanting to push for a negotiated solution. And the president, to his credit, has mostly been saying the same thing he has long said. That was his preferred solution as well. I also want to flag one other piece of news, Frank, is that just before the news that the president would be leaving, he had posted on Truth Social again that Iran should have signed the deal that he told them to sign.

And he ended the post by saying everyone should immediately evacuate Tehran. That raised a lot of questions here about what exactly that meant. Was that a threat? It was ominous. The president later told reporters that he posted that because he, quote, just wants everyone to be safe. Our Megan Casella live in Canada right now in Alberta, I believe. Great reporting as always, Megan. Great to see you. Thank you.

We're going to stick with Washington. The Senate Finance Committee releasing that chamber's long awaited version of President Trump's mega bill. And the legislation is putting lawmakers there at odds with their House counterparts. Emily Wilkins joins us now with the very latest. Emily, good morning.

Good morning, Frank. Well, yeah, that Senate version of the multi-trillion tax bill, it's already causing heartburn among senators as well as some House lawmakers as well. As you noted, Senator Josh Hawley, last night he was heading into a meeting with Senate Republicans and he said that he has concerns with some of the proposals around Medicaid. He's told us that the bill needs work.

Rand Paul, he's told us previously that he's planning to oppose the bill over raising the debt limit, which this bill does to the tune of $5 trillion. And Senator Ron Johnson said that he's a no over how much the bill is set to add to the debt ceiling. He told reporters last night that the problem is it just simply doesn't meet the moment. Johnson called it inadequate. He said, we're not seriously addressing our long-term debt deficit and debt issue.

Now, the measures makes dozens of tweaks to the House bill, including making key tax breaks for businesses permanent. That includes measures on research and experimenting, faster depreciation and deducting interest. It also extends some of those clean energy tax credits so that more projects could potentially get the credit. And it softens the impact of that so-called revenge tax on foreign investors and countries, gives them a little bit of a longer deadline, a little shorter of a tax ceiling there.

Now, the text that Republicans released did not contain a final proposal for that state and local deduction, the SALT cap. But a group of House members threatened to sink the bill yesterday if it went lower than that $40,000 cap they agreed to. Congress is going to need to move quickly if they want to finish by July 4th. And some senators don't think it's possible, including Johnson, who told us last night that there was no way they would be able to get consensus and get it done in the next few weeks. Frank?

Yeah. By the way, Senator Johnson is going to come up on Squawk Box later this morning for much more conversation on what's shaping up to be a really busy morning in D.C. Emily, thank you very much. Always great to see you. And with that, let's bring in Jimmy Pethokoukis, economic policy analyst at the American Enterprise Institute, also a CNBC contributor. Jimmy P., great to see you as well. Good morning.

Frank, how you doing? All right, so what do you make of some of this GOP infighting when it comes to this bill right now? A number of issues. Why don't we start with the one that Emily was just referencing? Senator Hawley having some questions about Medicare, and this is interesting.

One of the issues here in this bill is they want to cut the taxes that fund that provide funding for some Medicare that's going to impact rural hospitals, which Hawley seems to be upset about. What do you make of kind of this butting heads over what what taxes to basically cut in this case? Everybody wants to extend, at least on the GOP side, the Trump tax cuts. But some other taxes seem to be in contention. Yeah. You know, you have this, you know, you know, the real kind of populist wing here.

of the Republican Party, which isn't that interested in debt and deficits, has a lot of constituents who are on Medicaid, and has really departed from sort of the traditional GOP

You know view that we that we need to have entitlement reforming They would probably like to spend more money on Medicare and Medicaid and Josh Hawley is part of that So that doesn't that doesn't surprise me At the end of day though, I think I think really most of these senators who are expressing complaints Whether it's about debt whether it's about Medicaid or are gonna get on board almost to an exception

All right. One other hot button issue seems to be the salt deduction. Now, this is interesting. The House, they put out one number and they're looking for one number. The Senate put out a number basically as a negotiating chip. I mean, talk me through this. How common is this for the House and the Senate to literally put out a proposal on a bill to negotiate from?

- Yeah, well, ideally, in sort of the version of lawmaking that you may have gotten in government class in high school, the House would have a bill, the Senate has a bill, and then they'll come together and work out the details. So, that's kind of how it's supposed to work. Neither house is supposed to sort of rubber stamp what the other House of Congress wants to do. Now, what's really interesting about the SALT

that you know is that the Senate said you know no we're not we're not gonna do 40,000 we're giving you nothing we're gonna stick with the law as it is and yeah that's obviously a negotiating tactic because and I think a lot of negotiating tactic really is around

those clean energy subsidies from the Inflation Reduction Act, which there are a lot of Republicans, either because they think we need more clean energy investment, whether it's solar or nuclear, what have you, or they have a lot of that activity happening in their states,

they do not want those credits to phase out anywhere near as fast as in the House. So I think that's where you're going to see the action. You'll see the action on raising that $10,000, but also on extending the various tax credits, which the House bill really puts very strict limits on.

One other question we have to talk to you about, Jimmy, is the news this morning. The president returning back to the U.S., leaving the G7 summit early, also posting this morning that it's not about peace talks. What do you make of the president's comments and the fact that I think a lot of people, including, according to Megan, even President Macron of France, thought he was coming back to broker a ceasefire. And the president saying, you know, that's not necessarily the case. Right.

I think in these situations where you have the president making sort of moves and there's there's there's, you know, truth. Social media post is kind of revert to the baseline. And sort of my baseline with President Trump is that he ran as a dealmaker, not a war maker, but very reluctant to use military force. I think the idea of getting the U.S.

whether it's helping Israel blow up these nuclear facilities with bunker busting bombs.

I think he would much rather make some sort of mega deal that involves Israel, Iran, maybe Saudi Arabia somehow. So that's where I would default to rather than looking at that line about evacuate Tehran as the beginning of military action. So this is a lot of uncertainty. We still have tons of uncertainty coming out.

on trade, which certainly was not settled by the G7 meeting. And now we have a lot of uncertainty, not just about Iran and Israel, but what the president wants the U.S. role to be going forward.

Jimmy Pethokoukis, always great to see you. Thank you very much. Thanks, Frank. All right, coming up here on Worldwide Exchange, the U.S. political divide expanding to your portfolio. The Wall Street Journal's Gunjim Banerjee lays out how differing views on where the markets stand is having a big impact on investment strategies. Worldwide Exchange, back in just a moment. Welcome back to Worldwide Exchange, taking a look at U.S. stock futures. You can see right now, I believe we're hitting the lows this morning. All three indices down more than a half a percent. We're also going to look at the Dow leaders and laggards in the pre-market, taking a look at those.

We are seeing first the laggards, Microsoft pulling back about 1%, Nike pulling back about three quarters of 1%. Similar story for Amazon and Goldman Sachs. Then we have the down leaders and a lot of movement on the leader's side. Right now you're seeing Chevron, obviously a big oil player. Those shares up about a half a percent in the pre-market. Amgen, Caterpillar, and Coca-Cola essentially flat in the pre-market.

Coming up, we've got the one word that every investor has to hear today and the stock pick that every investor needs to know. Plus, Amazon looking to get cautious consumers to open up their wallets. Details on how the e-commerce giant plans to get Prime members to spend, spend, spend when Worldwide Exchange returns. Stay with us.

Welcome back to Worldwide Exchange. The political divide in this country is extending well beyond Main Street to Wall Street. Recent polls show there's a widening gap between Republicans and Democrats over who they believe, over where they believe the markets are headed, and it's translating into their investment strategies. Joining me now is Gunjan Banerjee, lead writer for Markets Live at the Wall Street Journal. Her latest piece is titled Red vs. Blue is Dividing Stock Portfolios Like Never Before. Gunjan, good morning. Great to see you.

Good morning, Frank. All right, let's talk about it. This optimism gap that you're seeing when it comes to making investment and trading decisions, what does this optimism gap mean for how people are picking stocks for their portfolios, index funds, et cetera? That's right, Frank. Conventional investing wisdom says that you should not be playing politics with your portfolio. But for a lot of Americans, that's easier said than done. And a lot of them are looking at their investment portfolios through red or blue goggles.

And I saw that in my interviews with investors this year, where a lot of them who might have voted for Trump seemed to think that the April or May volatility was a time to buy the dip. Meanwhile, I spoke with another individual investor for this piece who said that, you know, he was concerned about Trump's policies and he had decided to move some of his money abroad. Money managers told me that in the calls that they were receiving this year from their clients,

Rarely have they seemed so divided among party lines where a lot of Republicans were standing pat, a lot of Democrats meanwhile seem to be increasingly worried about their portfolios. One money manager, for example, told me that he had a wealthy client say to him, "I want to move all of my money abroad. I'm really scared about Trump's policies."

You know, you guys in the article, you mentioned that some of this partisan portfolio management started back during the Barack Obama presidency. And it kind of accelerated during the Trump presidency. In all fairness to probably the most polarizing presidents of all time, you know, deep political divides over both of them and deep social divides over both of them. Really, is this unprecedented? I mean, is this really the first time that people have made their investment decisions based on who's in the White House? Because it seems like that wouldn't be that crazy.

We have never seen it to this degree before. And in Gallup data provided to The Wall Street Journal, the so-called optimism gap in terms of how Democrats and Republicans view the stock market and whether or not it's going to rise over the next six months is the widest it's been in Gallup data going back to 2001 when George W. Bush was president. So this intense polarization that seems to dominate so many aspects of American lives, Americans' lives,

You know, we see it on social media. We saw it at the protests or the parade over the weekend. It's now showing up in our stock portfolios more than ever before. And yes, academics I spoke with did say that this started to emerge during Barack Obama's presidency, and it grew really extreme during Trump's presidency.

first term. And of course, we are seeing Wall Street try to capitalize on this, right? We've seen anti-woke ETFs crop up and all sorts of funds and strategies crop up trying to benefit from the

this divide. Yeah, in fact, we got the MAGA ETFs out there. One of the ETFs, we're actually showing it right here over the last three years up about 41 percent compared to the S&P up about 64 percent. Another conservative ETF kind of tracking the S&P actually outperforming it just a bit. All right, Gunjan Banerjee, always a pleasure to see you. Your news story's out. Red versus blue is dividing the stock portfolios like never before. It is a great read and it's always great to see you. Thank you.

Thank you. All right, coming up here at Worldwide Exchange, tapping into the defense sector, the play in that space. Our next guest calls his top pick up nearly 10% this month. We're going to reveal our mystery chart coming up right after the break. Stay with us.

And as we close on the 6 a.m. hour, a check of a few big stories that we are following this morning. President Trump returning to Washington a day early from the G7 summit in Canada on Air Force One. The president says he wants a real end to the problem in Iran, saying he has not reached out to Iran for peace talks. He also says the EU is not being fair on a trade deal and he may extend the tick tock deadline again.

The Nikkei closing higher today after the Bank of Japan keeps rates on hold and decides to slow the pace of its balance sheet drawdown. The BOJ's governor saying there's extremely high uncertainty over each country's trade policy, creating downside risk for Japan's economy. SoftBank raising nearly $5 billion from selling part of its stake in T-Mobile, according to a term sheet steamed by Reuters. SoftBank selling about 21 million shares. You can see here T-Mobile shares are lower ahead of the open, pulling back more than 4%.

And don't have enough time to snag all those deals during Prime Day. Amazon's annual sales event is expanding this year to four days from July 8th to the 11th. Adobe Analytics says U.S. shoppers, they spent more than $14 billion during last year's July Prime Day event. All right, turn our attention now back to the markets. Futures, they are lower ahead of the open. With that, let's bring in Kevin Simpson, CEO and founder of Capital Wealth Planning. Kevin, good morning. Good to see you. Hey, Frank, how are you? Let's start with your word of the day, Kevin.

My word of the day, Frank, is restrictive. Now, the geopolitical events are dominating the headlines and for good reason. But we do have a Fed meeting this week, and I think markets are going to be paying very close attention to the path of interest rates. And I could make a case that I think that we're already in territories where we're getting a little restrictive and we need to start having a conversation at least about rate cuts.

I see that we need to have a conversation about rate cuts. How do you think oil plays into all of this? We were just looking at it earlier. Oil's up about one and maybe a third percent has been kind of moving. It's off of its highs or is up more than one and a half percent, but still higher. The president also saying on Truth Social that there is no ceasefire. He did not come back for a ceasefire, but he did come back reportedly to go to the situation room and talk to some of his top security advisers. What do you make of that risk when it comes to the economy and also inflation when it comes to oil prices?

I mean, it's problematic for the Fed, because if not for the bump in oil prices, Frank, I think we could easily be talking about a rate cut this week.

Now, we have tariffs and we have an issue here with oil. That's going to take any rate cut off the table this week for sure. But we get a post-game presser, which is always interesting. We do get dot plots this particular meeting. So anything that's dovish, anything that's pointing towards cuts towards the end of the year, I think can be very constructive. You know, it's hard to parse through the geopolitics right now. The conflict in Israel and Iran is very legit. It's very real and scary.

But our job is to look at the economics behind that at times. And I think this week we've got to pay close attention to interest rates, because if you think of a 1% GDP in the third quarter, then growth is slowing. If you look at the labor market, although still super resilient, it's cooling a little bit. Last week with CPI and PPI, inflation was coming down closer to that 2% target. And again, if not for tariffs and a bump in oil,

we'd be talking about rate cuts here. And I think that's the right thing to start thinking about. You don't want the Fed to come to the rescue too late and start cutting rates because we're in a slowdown. It's a really fine needle to thread, but we'll see what they have to say tomorrow after the meeting. All right, Kevin, you're also paying attention to the geopolitical conflict when it comes to your stock pick for us today, which is RTX. Why is that a good pick in this current environment?

Yeah, I mean, it's almost too timely when you think about what's happening. We picked this up. We've known the name for a while, Frank, but we added to it a little bit last week when there was an indication that there may be some additional conflicts in the Middle East, which certainly happened. This is a 17 PE multiple, so still a good value name with a growth component. Pays a 2% dividend, so you're getting paid while you wait.

And if you think of the three components within Raytheon, they really focus on aerospace, defense and missiles. And they're one of the few companies that can sell to countries outside of the U.S., not exclusively, obviously, but definitely a name that in this environment makes a lot of makes a lot of sense. And they've been hitting all time highs.

Again, sort of cliche, but this is a stock that we've owned for a while. We added to it last week and we certainly like it long term. I'll just give you one stat. I know we're pressed for time, but we're seeing two point seven trillion in spending on defense last year. That's a 10 percent increase, which is the largest increase since the Cold War. So sadly, defense is a name you want in your portfolio. What about some of their names that were higher on the pre-market? Northrop Grumman, Halliburton. We also saw those higher. Do those also seem attractive to you right now?

Yeah, I mean, this whole space is, you know, budding up against all time highs, including GE. So you want to just look at multiples, make sure that you're not chasing something. But yes, I think the space in general, you need to have at least one or two names in here for a diversified portfolio. And by the way, right now we're looking at Northrop Grumman shares up about two and three quarters of one percent in the pre-market. Kevin Simpson, your pick for us today is RTX. Great to see you as always. Thank you very much.

Here's what I watched today, a busy morning of economic data, including the latest look at retail sales, import prices and homebuilder sentiment. We also get earnings from Apple supplier Jabril before the bell. And the Fed kicks off its latest policy meeting today. Before I let you go, one more look at futures. We have seen some movement when it comes to oil prices and futures in the pre-market. Taking a look, you see futures are in the red across the board. The Dow looks like it would open about 250 points lower.

We also want to take a look at the energy trade in the pre-market as well. We were showing you oil earlier up right around 1.5%, pulling back just a bit, at least when it comes to WTI, now up about 1.1% and a quick look at treasuries as well. Again, the Fed kicks off its two-day policy meeting today. Taking a look, the benchmark at 4.42%. That's going to do it for us here on Worldwide Exchange. You've been listening to CNBC's Worldwide Exchange. You can always catch us live weekdays at 5 a.m. Eastern.

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