Big Stock Bounce Back, Tariff Talks, Results on Deck. 5/27/25
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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.

A big stock bounce back, stock futures surging after this long holiday weekend and Wall Street's worst week in a month. Investors focused on President Trump's global tariff war, scaling back a threat against one of America's largest trading partners. And the consumer front and center once again with a big week of retail reports on deck. This is Tuesday, May 27th, 2025. You're watching Worldwide Exchange on CNBC and streaming on CNBC+.

Good morning, everybody. Thank you for being with us. I'm Contessa Brewer in for Frank Holland this morning. Let's kick off this Tuesday morning with U.S. stock futures. And they're pointing to a sharply higher open after the Dow, the S&P and the Nasdaq suffered a worst week since early April. Right now, we're looking at the Dow implied to open higher by 532 points, the S&P 500 by 84 points.

and the Nasdaq by 344 points. Tech among the biggest gainers on the S&P in this pre-market. We're looking at Skyworks Solutions, Palantir, Supermicro leading the gains. Supermicro indicated higher by 4% in that pre-market trading.

laggards include Dexcom and Cooper companies as well. There you're seeing the ones in the red, Dexcom off by 2.5%. Let's check the bond market here and the 30-year yield dipping back below that

psychologically important 5% mark. You're seeing that now at 4.973 the year on the 30-year, the yield on the 30-year. The 10-year Treasury, 4.46, and the two-year at 3.98. Bitcoin below its all-time high. It hit a

111,891 last week. Right now, it's higher by 0.62% at 109,757. We're watching shares of Tesla this morning, sharply higher after Elon Musk posted he's back to focusing on his companies 24-7. As you can see, Tesla is up by 2.5%. We'll have more on that just a little bit later, and certainly the challenges that he's facing overseas.

This morning's top story, investors breathing a huge sigh of relief after a whipsaw weekend of Trump trade tactics concerning one of the U.S.'s largest trading partners. Karen Cho is in London with more for us this morning. Good morning, Karen.

Contessa, good morning to you. Certainly relief on markets here for two days now as US President Donald Trump has delayed imposing a 50% tariff on imports from the EU until the 9th of July, following a conversation with the European Commission President Ursula von der Leyen. Now that decision came just days after Trump had threatened the bloc with a 50% levy from the 1st of June, amid frustration with the pace of trade negotiations between the two sides.

The EU Commission President Ursula von der Leyen said Europe was ready to fast-track trade talks with the US, adding that in order to reach a good deal, the two sides will need time until the 9th of July. Meanwhile, the EU's Trade Commissioner, Maros Sefcovic, has held talks with the US Commerce Secretary, Howard Lutnick, and Trade Representative Jameson Greer on Monday, and went on to post on X after that

conversation that the EU is committed to reaching a deal and remains in constant contact with Washington. So the Europeans contested saying this fresh impetus to get a deal done, hoping to step on that accelerator pedal. And what's the reaction been like in Europe to the promising results of a phone call with President Trump?

You're right to point out it's just a phone call because the threat still looms large that the tariffs could be enacted if there's no deal. But the reality is we have escalated to a fresh high on the DAX today, record territory for the German stock market. We have been rallying on the Italian stock market and on France too. So it feels as though the markets are really very much as pricing in the positive scenario that you've got Trump here that blinked when it came to China and hopes that he will too roll over when it comes to Europe because it is such a large trading block.

But Contessa, a ton of different issues to solve here around food standards. That is a big one for the Europeans. They don't want to take those standards down too much. Digital services, a big source of revenue for the Europeans as well. So still lots of issues to conquer here. The other thing is it was reported that Trump was frustrated by

the slow nature of the progress of negotiations. But there are 27 member nations in the European Union. How complex is it to try and get a deal with all the members on board?

Well, that's exactly right. A huge number of member countries to negotiate with. And don't forget, each country has its own individual sector that it's trying to protect. I mean, you think about German industry, huge amount of autos there, and Sefcovic was on a call as well with the German automakers about some of the negotiations that have been taking place. So there is certainly a complexity around agriculture as well. That is a big source of revenue for individual countries too, namely France. So individual countries having their own priorities.

which adds to the complexity at the same time that Europe is trying to bolster its own strategic advantage here, use this momentum that it's got, that the U.S. pushback has handed it. And don't forget, we've had those huge fiscal packages around defense, around infrastructure spending. So Europe is trying to maximize this moment and ensuring that it gets a good deal for all of those 27 countries. Karen, it's great of you to lay out what's at stake there for Europe and really impressive to see those gains fluctuate.

across the board on the exchanges there. Thank you. Once again, stocks are getting set for a strong rebound on the trade talks, but the back and forth on tariffs.

Could weigh on sentiment. We're looking at another major focus for investors this week, and that's NVIDIA's first quarter results on Wednesday. We'll also hear from several Fed officials and get the minutes from this month's Fed meeting Wednesday. April PCE numbers out on Friday. That could provide some clues on the outlook on interest rates. Joining me now is Cole Smead, CEO and portfolio manager at Smead Capital Management.

We're looking at just coming off of a long holiday weekend. That pivotal phone call with the European Union's commission president seems to have sparked a lot of optimism overseas. Should it spark optimism here or are you more cautious?

Yeah, and thanks for having me, Contessa. So here's what I would say. Europe's really just following on what's been doing most of the year. Go look at bank gains, for example, in Europe. Banks have been making really good money the last year to two years. That continues to kind of fall forward. You're seeing a lot more spending in Germany. There's an article this weekend about MERS saying to make deep strikes into Russia, you know, through Ukraine. And so I say that because

It seems to be that Europe's very much on their front foot. This call to get this laid out with Donald Trump is very much in the camp of we just don't want to break anything. I think the United States is having to take a much more pragmatic view of this because obviously tariff day came and went, caused a lot of economic fears.

I think the difference is for the United States, we are coming off of the idea of American exceptionalism being kind of the idea of the moment late last year and early this year. The only problem is we're doing that on borrowed money. And so we have this tenuous place where, you know, do you let the 30-year go to 5% or 6%?

or do you deal with your economic reality, which we've borrowed too much money? That's just a very different place than where Europe sits right now. And what do you expect to hear? I mean, we're going to hear from Neil Kashkari, the Minnesota Fed president. We're going to hear from the New York Fed president, John Williams. What...

What do you expect to hear from the people who are leading the Fed about where to go from here? Yeah, it's a really good question. So the history is, is that the Fed will blink. I mean, that's just the history of this. So, for example, again, you have this idea of rates and then you have the economy. And for the Fed, it's inflation and full employment. OK, well...

Again, the history argues that you have inflation on us because we borrowed so much money. If you look back, we borrowed a lot of money in World War I. That was to fund our allies. And then World War II, we obviously did the same thing. But as soon as those wars ended, we tightened our spending right away. That's the big difference now. Even this year, Scott Besant saying, hey, we'd like to get, you know, he said originally, let's get our GDP, our deficit down to three to three and a half percent. The difference is now he's saying, well, let's grow our way out.

The problem is that just takes a lot of time and the government spending is tough to get out. Your company has $7.8 billion under management. How are you positioning clients right now amid the uncertainty of our tariffs on, our tariffs off? Where do we go? I think what the Liberation Day in April did was heighten the idea that people are really worried about the economy.

okay now in comparison we're talking about like a 30-year at five percent it doesn't seem to be that the stock market's greatly repricing itself based on a you know 30-year at five percent so it's interesting to think about asset markets versus the economy okay the economy continues to chug along despite people worrying that um you know what could go on with liberation they could really sit on the economy what i think i noticed more than anything is if you talk to a business owner today they're really worried about tariffs in general you go talk to you know joe and jane six pack on the street

They don't care. So this is kind of a rich people problem, right? If you own assets, if you run a business, this is a big deal to you. But that's a small part of America. Middle America, main America, you know, I'll call it Main Street. This is not that big of a deal. If you look at the economy, economy's done fine through, but that's a lot tied to government spending. Cole, I appreciate you coming in. Appreciate your perspective. Thank you for sharing it with us. Yeah, thank you.

Let's go back to Washington, D.C. now, and President Trump and Russian President Vladimir Putin caught in a rare verbal back-and-forth following Russia's weekend attack on Ukraine. The war of words between those two leaders comes as Trump is trying to secure a ceasefire to end the Ukraine war. NBC's Bianca Faccine joins us now with the latest. Bianca?

Absolutely crazy. Emotional. These are the terms U.S. President Donald Trump and the Kremlin use to describe each other these days. The war of words erupting days after Russia launched several deadly attacks on Ukraine. I'm not happy with what Putin's doing. He's killing a lot of people, and I don't know what the hell happened to Putin. Following the president's comments, a spokesperson with the Russian government said Trump might be dealing with, quote, emotional overload.

It's a significant shift in tone from just last week, when Trump had a phone call with Russian President Vladimir Putin that he said went, quote, very well and included discussion on ending the conflict with Ukraine for good. Meanwhile, Ukraine says Russia launched over 700 missiles and drones Sunday, killing at least 18 civilians, including children. One Ukrainian resident says, let the world wake up and see how long can they bomb children.

Ukrainian President Volodymyr Zelensky is urging the U.S., Europe, and quote, all those around the world who seek peace to impose sanctions on Russia, writing on X that they would serve as a guaranteed means of forcing Russia not only to cease fire, but also to show respect.

But Putin isn't the only leader Trump currently has harsh words for. On his website Truth Social, the president writes,

Now, it's unclear if President Trump is seriously considering sanctions, but GOP lawmakers like Senators Lindsey Graham and Chuck Grassley are working on a bill that would impose sanctions on Russia and its allies. Contessa? It's really fascinating to see the devolvement of this relationship that seemed so cozy at one time. Bianca, thank you. Appreciate that. Coming up on Worldwide Exchange, do...

A lot more to come, including the one word investors have to hear today and the stock pick every investor needs to know. First, despite the U.S.-China trade truce, partly business as usual at many of China's largest factories. Yunus Yun takes a closer look next. Plus, critical consumer earnings reports on deck. The key names we'll be watching in this week ahead.

Later, President Trump out with a new threat against Harvard and the Ivy League despite fresh legal challenges. We have a busy hour ahead. One Worldwide Exchange returns.

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China's government reportedly is considering a new version of President Xi Jinping's master plan to ramp up production of high-end technology, such as chip equipment. Bloomberg reports the made-in-China measure could signal Beijing's intention to keep a strong grip on manufacturing, even as President Trump looks to bring more factories and production back to the United States.

Chinese factories are already running at full speed, trying to ship orders to American customers before the 90-day pause on tariffs between the U.S. and China ends in mid-August. Eunice Yun joins us now from Beijing with a look at how manufacturers are handling this upsurge in activity.

I'm at a factory in the port city of Ningbo. 100% of its products have been selling in the U.S. on Amazon and other retailers. The company says that it's feeling relieved about the U.S.-China tariff truce, but it's hardly business as usual.

Like many other Chinese factories, this maker of outdoor gear and other items has been holding inventory for its U.S. customers, who stopped shipments when President Trump hit China with 145 percent tariffs in April. Boxes are piled up next to production lines, which the company says is not normal practice. These boxes have been here since January. They were supposed to ship out in April.

For now, most of this factory's clients are trying to rush backlogged orders to the United States during this 90-day pause in the trade war.

But some may face delays because of a lack of space on container ships, since so many suppliers here are doing the same thing. The factory says that it's responsible for all the costs until its products reach that port. Everything else beyond that, it says, is paid for by U.S. importers as well as other American companies, including the tariffs.

For its future, in April, this factory started shipping to new customers outside of the United States. This area used to be packed with boat awnings that would go to the United States, but all of those headed to Europe. Unlike the American versions, these European ones, which will be used on lakes rather than the ocean, don't have a protective coating for saltwater. Redesigns by a Chinese factory unsure of what comes next.

The tariff issues have become so sensitive, Contessa, that the company that we visited didn't want to be named in our report, and the managers that we spoke to didn't want to be interviewed on camera.

When you talk, Eunice, to the business owners, to the people who are responsible for manufacturing goods that are destined for America or used to be destined for America, is there optimism that there can be a permanent deal on tariffs before the deadline ends, that pause?

I think the feeling here is that the truce is very fragile. Just last Friday, the foreign ministry had said that the vice foreign minister and the deputy secretary of state had held a call. But it's unclear whether or not that call really fits into the actual talks and what was described in Geneva as

a trade consultative mechanism. In addition to that, the Chinese have yet to remove the expert controls on rare earth metals, as that was agreed upon in that statement. And the Chinese have also been making a lot of critical, strong statements about the Trump administration's recent moves to tighten curbs on AI chips, including on Huawei chips. So the Chinese have actually described that

as undermining the trade talks and are now threatening legal action for those who enforce those curbs. Eunice Yoon, thank you for the report from Beijing. Still on deck, Elon Musk appears to be shifting his CEO efforts back into high gear and investors are excited. What does it mean for his White House Doge agenda? We discuss when Worldwide Exchange returns.

My rough plan on the White House is to be there for a couple days every few weeks and to be helpful where I can be helpful.

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We're watching shares of Tesla this morning moving higher in the pre-market, up by 2.6% following a tweet from Elon Musk over the weekend, where he reiterated his commitment to business and a focus less on politics.

Musk posted back to spending 24-7 at work and sleeping in conference slash server slash factory rooms. I must be super focused on X and XAI and on Tesla as we have critical technologies rolling out. The tweet comes alongside a new report from The Washington Post.

that claims Musk has grown disillusioned with politics and said he will spend, quote, a lot less time on those issues in D.C. CNBC senior technology correspondent Arjun Karpal joins me now with more. Nowhere would the commitment from Elon Musk seemingly be more important than in Europe, where you're noting a dramatic drop in sales of Tesla.

Yeah, that's correct, Contessa, and good to be with you this morning. There were some figures out this morning from the ACA, and they suggested a 49% drop in sales of Tesla cars in April, year on year. That is huge, and it continues a decline of what we see. And what you were alluding to there around Elon Musk's involvement with Doge and with the White House,

has caused some brand damage here in Europe and that's really affected sales. We saw some protests in March outside some Tesla dealerships across Europe as well because of Elon Musk's involvement there. But also there's a number of other issues here in Europe as well, Contessa. There's rising competition, particularly from Chinese players like BYD who have very aggressively expanded into the market. There's also the fact that Tesla has a very aging lineup of cars.

The market's very much waiting at this point for it to come out with a new model, perhaps a mass market model, which could appeal to a broader audience here in Europe. So a lot of issue Tesla has to deal with. And the fact that Elon Musk now is saying he's going to spend a bit more time in the servers or the factory room, that's reminiscent of a pledge he made back in 2018 when Tesla was trying to get the Model 3 production off the ground. And that

was a very, very key car for the company. So throwback a little bit to the kind of energy Elon Musk was bringing back then to what Tesla shareholders really want to see now from Musk as it pertains to Tesla and his other businesses. OK.

OK, so if if Elon Musk is truly recommitted to Tesla, does that repair the brand damage in Europe? I mean, if if if what is part of what is causing this massive drop in sales is the fact that he got so involved with the Trump administration and with government cuts so much so that it was prompting protests at dealerships in in Europe.

Does his re-involvement change that? I think there's a lot of work now to be done to repair that image. You know, Elon Musk is still saying he may spend a couple of days here and there at government. I think that's still going to be a bit of pressure on the brand image towards Tesla and Elon Musk.

in Europe. But I think it's also now what Elon Musk has to do and Tesla more broadly is refocus on the strategy in Europe. I mentioned there there is increasing competition from the Chinese players who have been very, very innovative. They've been very aggressive on launching cars. And what Tesla needs to do is come up with a car or two that really appeals here to the market in Europe at a very competitive price point as well. But there's another big issue here, I think, for Tesla. When we looked at the figures that came out today, one of the things we

that was quite stark was the popularity of hybrid cars. So these sort of combination of a small battery with traditional fuel cars. And the problem is there is still a big infrastructure problem across Europe in terms of charging, et cetera. And of course, Tesla doesn't have a hybrid car on the market. So there's a lot of fundamental issues in terms of the market. There's a lot of brand work that Tesla needs to do and a lot of product work too. So big task here for Elon Musk and Tesla.

Arjun, thank you so much for laying out what's at stake for Tesla in Europe. We continue to follow what's at stake for Tesla here in the United States as well, and we'll be doing that here all day.

Coming up, Fed Chairman Jay Powell defending some of President Trump's favorite political targets during a weekend speech at an Ivy League university. And as we head to break, a look at mega cap tech with Nasdaq futures pointing to some big gains at the open. OK, so first look at let me point out NVIDIA, which is up two and a half percent in the early morning trade. You've got Apple up two percent, Microsoft up one and a third, Amazon two percent, Alphabet two point two percent.

We continue to follow those towards the market open and Worldwide Exchange is back right after this. We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins. China in particular represents a lot of volume in certain categories like electronics and toys.

All of the tariffs create cost pressure for us, but the larger tariffs on China have the biggest impact. That was Walmart's CEO on the call earlier this month talking earnings and the impact of tariffs on the retail giant's latest results. And we'll get a fresh look at the state of retail with a number of high-profile names reporting this week, including Macy's, Best Buy, Costco, Gap.

Welcome back to Worldwide Exchange. I'm Contessa Brewer in this morning for Frank Holland. Coming up, we'll have much more on the key names to watch and what we may learn about the health of the consumer and the growing ripple effects of the Trump trade policies. First, let's kick off this half hour with a check on U.S. stock futures, which are pointing to a sharply higher open after the Dow, the S&P and the Nasdaq last week suffered their worst week since early April. But right now, what a turnaround. You're seeing the S&P 500 increase

Implied to open higher by 85 points, the Dow Jones, 541 points higher in the futures and the Nasdaq, 348 points higher. Let's take a look at some of the biggest Nasdaq 100 gainers. There you're seeing Marvell Technology up 3.8 percent, Shopify 3.3 percent, Palantir is up 3.3 percent and Applovin up 3 percent.

Let's also look at the biggest laggards on the Nasdaq 100, where you're seeing Dexcom off by two and a half percent. Automatic data down one and a half. Global foundries down by one percent. And Fastenal down by a third of a percent. President Trump has performed a pretty significant about face on tariffs against the European Union.

Following weekend talks, the president delayed those tariffs taking effect, not from June 1st, but to July 9th. There was a phone call between the president and the president of the European Commission. And apparently that phone call did some work.

Checking the bond market now and the 30-year yield dipping back below a psychologically significant 5% mark. There you're seeing the 30-year now at 4.9%, just barely below the 5% mark. The 10-year yield is 4.465% and the two-year Treasury, 3.981%. I want to take a look at oil now. Crude is coming off its first negative week in the last three. And right now it looks like it's trading higher.

up by four tenths of a percent to $61.80. And Brent is higher by half a percent. Checking Bitcoin this morning, just below its all-time high of 111,891. It hit that last week. Now it stands at 109,584, up about half a percent.

And a huge week on tap for retail. Results including Gap, Ulta Beauty, Macy's, Dick's Sporting Goods and Best Buy. This week's reports follow what was a mixed bag from the likes of Walmart, Home Depot, Lowe's and Target. Target came in with earnings and an outlook that once again fell short of analysts' estimates. Walmart, for its part, arguably was talking a bit too much about tariffs and rising costs and spending.

It was so much that it caught the ear of the White House. Let's talk more about what's in store. Joining me on set, Jessica Ramirez, co-founder and managing director of advisory firm The Consumer Collective. Also with me, Brian Nagel, consumer growth and e-commerce senior analyst at Oppenheimer. Oppenheimer, and it's great to have both of you. Jessica, I'll start with you. First of all, just generally speaking, when you see Trump saying that he had a great call with the commission president of the European Union...

that is going to delay the start of those 50% tariffs. What does it do in general for consumers in the United States and for the companies that you're advising? So I think mostly with all the news that we hear day in, day out from Trump,

there's a lot still of uncertainty and you can see it through the consumer. So one day we hear one tariff from one country, another day we hear something else, there's postponed on dates as well. It just makes the consumer even more shaky. And I think that's what's going to continue through this whole summer.

As well for the retailers, I think the retailers are taking an approach of they can handle what's within their power. And if it's a global company, they are looking to other regions of growth or they're looking to see where strategically they're going to take the hit or where they're going to increase their price.

Brian, when we're talking Walmart and its massive reach for it to discuss tariffs to the extent that you heard the CEO on the call saying, look, we're going to have to pass along some of those cost increases. I mean, a lot of these consumers will pull back on spending not just at Walmart, but across the board. How are you thinking about the tariffs, the trade war and where we are in the uncertainty game?

Yeah, well, good morning, Contessa. So, I mean, I just want to be glad I don't officially cover Walmart. I have a colleague that does. Obviously, I cover a number of retailers and consumer spending broadly. And I look, I totally agree with what Jessica says. I mean, the key word here is uncertainty. It's both on the part of the consumer as well as these companies. You know, I just think I think every day we get more whiplash back and forth. That level of uncertainty increases. So today we're feeling better. We're waking up to the news. I guess we got it yesterday.

on the holiday here in the United States, you know, that there's now, you know, we're pushing back these proposed tariffs on the EU. But on Friday morning last week, you know, we got shocked by this announcement. It's just this back and forth that's causing a great deal of uncertainty out there. I think it is weighing upon consumer spending. And as I'm talking to these leading retailers, and like you said in your opening, we have a number of them reporting this week, you know, they don't know what to do because they really can't manage their business when they're, you know, they're basically at the whim of what may come out at any hour. What?

What are you hearing from the companies that you cover about demand trends from consumers and about whether there's already been a pullback in spending? What kind of color are you are they giving you on current quarter?

Yeah, so the way I would characterize spending is, look, I think, now I want to make sure I'm clear on this, discretionary spending, right? You know, because in my coverage universe, I cover primarily discretionary companies as opposed to like no need-based retailers. But look, the way I think this sets up is we had a kind of a weakish, you know,

so not great spending dynamic. Into late into last year to twenty four. And then as this trade I think as the trade rhetoric really started to heat up. You know that weakest demand backdrop has turned even weaker. And so when we're hearing from companies as they're reporting again we'll get more updates on that this week.

I think we're hearing these companies say that, look, the consumer's cautious, particularly on these more discretionary, larger ticket type items where the purchase can be deferred. Now, there is one silver lining. OK, and we have seen some of this. I think there actually has been some pull forward in demand. You know, as consumers, you know, watching news like we are buying ahead of tariffs. Yeah. I mean, the discussions at my house was like, do we buy the Apple Watch watch?

for the adolescents now and just hold them that we're not quite ready to give them yet, but should we just buy now and save the 25% the 50% what's it going to be right exactly let's dive down into some names who's likely to impress who's likely not to impress and who are you thinking of right now Jessica might be just a wild card.

I think in terms of impressed this week, Dick's Sporting Goods. They sit still in a bright spot. We do like the acquisition that they announced most recently, the Foot Locker. It's sport. The consumer is still very much interested in sports and they're participating. I think there's a lot about. Because there's an experiential side of that, right? We're talking a lot about to our clients and all around a loneliness epidemic.

And so if you think of running clubs, if you think of racquet sports, it brings the community together. People are dating in a different way. It's a tough time. You still want happiness. There's a different sense of wellness. So Dick's Sporting Goods is in a really bright spot. Who I don't expect to be impressed by is Capri at all.

I think it's great that they are selling off Versace, but Michael Kors is still in a very tough spot. And the wild card is Ulta. I think there's a lot of misconception about beauty right now out in the market from what I've heard. We don't see, I think beauty is a bright spot. It's just beauty will shift. It's normalizing. And also beauty is replenishment.

you're going to replenish your moisturizer you're going to replenish your eye cream and they're more expensive it's interesting that ross said it's one of the most important segments of its business it's suffering it it's stock was down like about 10 last week when you look at the off-brand or bargain priced stores do they have an opportunity i think they do again as both brian and i have mentioned you know the consumer is very much in a shaky place

the way that they're going to spend is going to be extremely strategic. They were doing that last year and off price does become a winner. In terms of Ross talking about beauty, they're

assortment anytime we've been walking into a raw store has been phenomenal. It's almost incredible. It's at the way how Marshalls and TJ started. Yeah. So it's, it's a category again, in general, that I'm going to tap into Brian. I wanted to talk to you about one of your picks here, auto zone, because I'm seeing it as it's a pick on CNBC. It's a pick. What, what about auto zone right now, which is reporting earnings? I think that today that, sorry, what about auto zone? Do you really like at this moment?

Yes, AutoZone has been reporting for a couple hours. Look, I think the auto parts retailers, they're well-positioned here in this very uncertain, very fluid tariff dynamic. One, these companies have a lot of pricing power. They can effectively, and they have effectively, passed along higher costs. And oftentimes, those higher input costs serve as a sales growth driver. So I think AutoZone is actually in a position to capitalize effectively

on tariffs. The other, you know, this goes back to what we're talking about as an uncertain consumer. I mean, there's a counter-cyclical nature to auto parts demand. You know, typically demand for aftermarket auto parts improves or strengthens, you know, in weaker economic backdrops simply because consumers hold onto their existing cars longer and then do the maintenance on those cars. So I think that's, to me, look, AutoZone's still cheap. You know, I just, I've liked AutoZone for many, many years. I just re-upgraded it

not that long ago. And I mean, one key point is, I think, relative to other names in the space, auto zone stock remains quite cheap. Yeah, even if the tariffs affect the auto parts, my colleague Phil LeBeau points out that you're seeing cars now at an age that's a record high and that 92 million vehicles on the road are at least 16 years old. It's really an incredible opportunity. Brian Nagel, Jessica Ramirez, thank you for joining me today.

Thank you. Appreciate it. Coming up, the quiet moves NVIDIA is making around one key space in the tech trade, likely a big focus for both investors and competitors when it reports this week. We'll have details when Worldwide Exchange returns.

Mary, seeing stock futures moving noticeably higher. NVIDIA, one of the big market events this week, reporting first quarter earnings Wednesday. The stock fighting to make its way back toward positive territory for the year, now down about 2% year to date. Investors focus on NVIDIA's results, and the company is looking to push further into part of the market dominated by the big AI hyperscalers. Christina Partsenevelis joins us this morning with more. Good morning, Christina.

Good morning, Contessa. Well, NVIDIA is really quietly making moves that should have AWS, Microsoft, and Google really looking over their shoulders. Well, NVIDIA's latest product, it would be DGX Cloud Leptin, isn't just another cloud service. It allows NVIDIA to reach out to some of its

6 million developers directly and offer them GPU compute with specialized providers like CoreWeave and Lambda rather than go through the large cloud provider partners. It so essentially cuts out the middleman. Think of it like an Uber for GPU marketplace where developers can find the compute they need without traditional gatekeepers.

The timing, though, is clutch. Hyperscalers are trying desperately to reduce dependence on NVIDIA's expensive chips by developing their own custom silicon. Broadcom, Marvell Technologies, both rivals of NVIDIA, are designing custom AI chips for OpenAI, for Apple, and Meta. Meta is one of NVIDIA's largest customers.

Nvidia sees the writing on the wall. Instead of waiting to get squeezed out, the company is really just doubling down by investing in these Neo-Cloud alternatives, that's what they're called, like CoreWeave, where Nvidia owns at least a 7% stake according to SEC filings.

NVIDIA doesn't want to build massive general-purpose cloud infrastructure like AWS or Azure. That requires tons of spending, a lot of money, and this is really a shift away from NVIDIA's core strengths in chip design and software. By launching platforms like DGX Cloud, Lepton, which they just launched at Computex last week, and investing in alternative providers like CoreWeave, NVIDIA is subtly challenging hyperscalers' dominance with

without directly competing. It's a calculated move that could fundamentally alter who controls this AI infrastructure space. Contessa? Like a chess match for all of these big tech companies. Fascinating. So I mentioned that NVIDIA reports earnings on Wednesday. What are a couple things that you think investors are really going to focus on?

There's two major things that I'll be focusing on for the investors. The first one is any type of weakness coming in from the quarter, either from loss of sales in China. Microsoft and both Google have pretty much alluded to maybe cutting capex in the near term. So what does that mean for Nvidia in the upcoming quarters? And then the second major point is Blackwell, which is their latest iteration of their GPU architecture.

if that is having any production hiccups. There's been some different reports out of Asia saying there has. So just those two factors and what that's going to mean for guidance this upcoming quarter. Christina Partinevelis, thank you. Ahead, falling behind in the growing AI arms race, Leslie Picker is here with the stumbles by banks when it comes to tapping into the red hot tech. We'll be right back.

Well, you'd be hard-pressed to find a company that is not integrating AI into their systems and offerings these days. And while banks certainly are among those working with the technology, it appears they're behind the curve when it comes to adoption. Leslie Picker joins us now. What are you seeing with banks and AI?

Hey, Contessa. Yeah, it's really interesting. There's actually a new report out saying that banks are, quote, falling behind when it comes to AI. While the industry is doing plenty of experimenting, only about a quarter of firms are using the technology strategically, according to Boston Consulting Group.

Now, the research found that most banks are, quote, playing it safe, using AI for individual productivity improvements rather than broad-based transformation. There are several reasons for this, though. The bank's data is notoriously fragmented and general-purpose large language models aren't really applicable.

Additionally, 61% of firms told BCG that running afoul of regulation is a top concern in fully embracing the technology. But the report definitely serves as a reckoning for an industry that spent more than $30 billion on infrastructure.

AI last year more than any other industry except for software. And the stakes are high with BCG saying the window is closing for banks to fully embrace AI or risk losing their competitive position. The report says Gen AI and agentic AI will dismantle current moats that banks enjoy, things like complexity and sticky customers and opaque pricing. However, the double-edged sword in all of this is if

or when banks fully lean into AI, there could be a drastic reshaping of the workforce. One unnamed large bank in the report is set to be targeting a 35 to 50 percent reduction in headcount by 2030 with full potential deployment of AI. Contessa certainly seemed to justify investors and analysts.

Full focus on how are you using AI because that would be a significant cost savings. Leslie, thank you. Coming up, betting on housing despite growing cracks in its foundation. Why our next guest likes this sector play despite the fact that it's down 22% this year. Or maybe that's why. The name revealed next.

Check on a few stories that we're tracking this morning. President Trump is delaying tariffs on imports from the European Union until July 9th, after threatening Friday that he would impose a 50 percent charge starting June 1st. But apparently a phone call with the European Union Commission president helped on that front. Tesla's sales in Europe dropping nearly 50 percent in April, even as sales of other electric vehicle brands rose by more than 25 percent. Fed

Fed Chair Jay Powell defended the central bank's independence, speaking at Princeton University Sunday. Powell pointed to action the Fed took during the pandemic to try to contain the global economic crisis.

President Trump took another shot at Harvard, saying he's considering taking $3 billion in grant money from the university and giving it to trade schools across the country. Nvidia reportedly is launching a cheaper Blackwell AI chip for China and plans to start mass production as soon as next month. A spokesperson tells Reuters the company is still evaluating its limited options.

That stock is up 2.5% in the early market trading action. Disney's live-action remake of Lilo and Stitch and Tom Cruise's latest Mission Impossible movie brought crowds of people to the theaters this holiday weekend, and that helped the box office to a record total of more than $326 million over the four-day period. Bad weather always helps the movies on a Memorial Day weekend.

the trading day ahead and let's bring in josh wine portfolio manager at hennessey funds josh set up this uh the perspective for me we have this trading shortened week with memorial day holiday we have news on the terror fronts we have elon musk saying he's going to rededicate himself to tesla how is the week shaping up in your perspective good to be with you contestant yeah it's a big week and i guess two days ago

We kind of started getting ready for it with the announcement of a delay in tariffs with the EU. So yeah, the market's looking to open strongly higher. There's some M&A news on the horizon, perhaps, with Salesforce buying Informatica, some nice headlines out of Nvidia, and you mentioned Tesla. And I think that people are getting excited. I think that this is a good setup for a leg higher. I think notwithstanding this volatility in trade announcements and things like that, I think

You know, I think we're at a good place. We are just getting news right now that Minnesota Fed President Neil Kashkari is speaking in Tokyo this morning and he's calling for steady rates and awaiting for clarity on what the impact will be from tariffs. How important is it for the Fed to be seen as authoritative and credible in this period?

I mean, I think it's important. I think it's always important, especially when there's, you know, an administration that's certainly speaking directly to them through the media and whatnot. So, yeah, I think it's important. I think that the market ultimately appreciates it, regardless of whether people think they're being too dovish or not. So, yeah, I think it counts for a lot. I noticed that your stock pick idea is KB Home, market cap $3.6 billion, and your word of the day, Stoic. Is there any crossover there?

I think so. Yeah. I mean, I think, well, yeah. So stoic, I think, you know, it's remaining calm in the face of uncertainty. That's not Webster's definition, but something similar. So, yeah, I think that a lot of people are going to buy a name like KB Home when all the numbers line up and we have clear sailing ahead. And I think it will be too late at that point. So I think right now the stocks come under a lot of pressure in the last three, six, 12 months. And I think this is a good setup. I think that...

You know, can't get worse. Josh, thanks so much for your time. Thank you for joining us. You've been listening to CNBC's Worldwide Exchange. You can always catch us live weekdays at 5 a.m. Eastern. The new McCrispy Strip is here. Dip approved by ketchup, tangy barbecue, honey, mustard, honey mustard, Sprite, McFlurry, Big Mac sauce, double dipped in buffalo and ranch, more ranch, and creamy chili McCrispy Strip dip. Now at McDonald's.