OpenAI, Anthropic & SpaceX Valuations 6/2/26

 Oil slips, yields pulling back and stocks still near record levels. I'm Dominic Chiu and this is your morning call.
 Good Tuesday morning. I'm Dominic Chiu and for Morgan Brennan today checking US equity futures after all three major indices closed at fresh record levels
 record levels in yesterday's session. We are seeing a little bit of a pullback so far in the extended session this morning. The S&P futures are implied lower by just about five and a half points for the opening bill.
 The Dow is lower by about 120 points and then the tech heavier Nasdaq 100 down by about 17 to 18 points. So modest declines but again coming off record levels.
 We're watching energy prices on mixed messaging from the president and Iran on the state of talks to end the war over there.
 The latest headlines from the Middle East in just a moment but so far the action is showing just about a one and a half to one three quarter percent loss for US benchmark crude prices currently at $90 and 58 cents.
 World benchmark ice print crude futures at $93.25 off by about one and three quarters percent as well tracking treasuries ahead of the big Joltz report later on this morning.
 Job opportunities labor term over survey that US two year note yield 4.02 percent and then the 4.43 percent yield for the spend to our 10 year note yield.
 So keep in mind those again ahead of that big Joltz report on jobs some stocks to watch here HPE shares soaring after blowing past expectations with its second quarter results reporting its biggest earnings beat since early 2018.
 More on those results in just a moment but those shares are currently up 23 and a half percent on a pre market basis.
 We're also watching shares of Nvidia after closing up over 6 percent yesterday in the back of that new PC chip announcement in video shares extending those gains up another 1 percent this morning.
 Another chip name to watch is micron also up over 6 percent yesterday closing above the $1,000 1,000 market level for the first time with yesterday's gains that stock is up over 260 percent so far this year micron shares just down about a percent after a big day yesterday.
 Turning back now to the war in Iran in a very fluid situation around peace talks president Trump suggesting indirect talks with Tehran were continuing at a rapid pace in a truth social post.
 This is after shrugging off the potential collapse of those negotiations telling CNBC he didn't care if they were over speaking to ABC news the president adding he believes a deal to reopen the straight of hormones and extend the ceasefire with Iran is reachable quote unquote over the next week.
 Let's now get out to Dan Murphy and Abu Dhabi with the latest there on the midi state Dan.
 Tom good morning. Well efforts behind the scenes in the last 24 hours appear to have come to the markets and put the path to diplomacy back on track.
 The picture from the region this morning is a little more status quo. Of course Iran threatened to walk away from talks with the US saying Israel's attacks on Lebanon were a direct violation of the US Iran ceasefire.
 Officials told the semi official taznim news agency that no talks with Washington would resume until Israel stands down and also threatened retaliation in the straight of hormones.
 Now of course that sent oil prices popping through the course of the session yesterday. We have seen some give back now off the back of new reporting from Axios that suggests president Trump got on the phone to Israel's prime minister Benjamin Netanyahu shortly after his call with CNBC and put the prime minister on blast.
 With an expletive heavy exchange. Now CNBC has not independently verified the contents of that call but on social media his tone was pretty victorious.
 On truth social president Trump said he had a very productive call with the prime minister announcing that Israel had agreed there would be no troops going to be rude and any troops already on route had been turned back.
 In exchange he said Hezbollah had agreed that all shooting would stop but Netanyahu then also put out his own statement saying the IDF would continue striking southern Lebanon as plans.
 Dom analysts have spoken to today say the US has successfully pushed Israel back from escalating in Lebanon. It's a red line for the Iranians that could have put the US Iran negotiation of track.
 The question now is how long will Israel hold off and how soon before the US and Iran can actually get a deal and come back to the table here.
 Dan Murphy a lot more attention on what's happening in Lebanon these days as well in that Middle East conflict. Thank you very much for that.
 Let's see how now markets in Europe and Asia are shaping up. Steve Sedgwick is in London with the early trade there. Steve good morning.
 Hey Dom great see my friend look there is no doubt about it we can look at earnings we can look at technology IPOs we can look at all kinds of AI stories but it is the geopolitical worries that are really concerning.
 I mean we'll have a look at Asian equities now fairly mixed in today's trade investors weighing those geopolitical tensions in the Middle East against the fresh wave of AI related announcements as you were just referring to from the likes of Nvidia and as well Intel.
 Now the European equity markets they are extending some cautious gains today investors again watching those developments in the Middle East from the President and Terran and elsewhere but also turning their attention to the flash Eurozone inflation data.
 We're all waiting to see whether the Fed the ECB the the banking and whether they have to put rates up in relation to what's going on with the war but may inflation came in at 3.2% year over year according to flash estimates.
 Core CPI rising to 2.5%. One stock story I'm just going to bring your attention to this is Abevac. Now the shares they've been sinking latest trial for an inflammatory bowel drug showed three different people developing three different types of cancer while taking the higher dose Abevac said the cases were considered unrelated to the treatment by the investigators and the drug men its own goals with more than half of patients experiencing remission.
 But Jeffries Jeffries said the cancer case is seen in maintenance break its investment thesis shares coming down around about 30% back to you.
 All right Steve said you're with the latest action out of London. Thank you very much for that back to those HPE earnings results and the stock taking off on the back of those results right now again those shares are up nearly 24.5% in the pre market trade the company easily by the way beat expectations on both the top and bottom lines reporting its biggest earnings beat since early 2018.
 HPE's boosting its full year earnings guidance by a full dollar per share saying it is now tracking two years ahead of its own long term financial plan and goals ahead of the earnings the stock closed up 9% yesterday after hitting a record high after unveiling a new server power by Nvidia's Vera CPU at the Computex conference out in Taiwan HPE shares again 24% higher.
 Let's turn back to the broader markets and bring in Kevin Mann the president and CIO Ahenyan and Walsh has had management.
 The story these days Kevin has always been about AI I guess it has been for the past couple of years at this point now just how much are investors enjoying this ride and how cautious do they have to be in the coming months.
 That's a great question Dom and let 2026 serve as yet another reminder to investors of the dangers of trying to time the market.
 Remember back in March following the commencement of Operation Epic Fury the markets fell down by about 5%.
 Now in the following months in April May the markets up over 16% were currently on a nine week winning streak but the majority of those games particularly in the month of May took place in the information technology sector.
 In fact pull out tech and the index likely would have been down for the month of May.
 So this should also serve as a reminder of the potential dangers of concentrating in any one area of the market notably technology.
 And I would remind everyone that pull back we saw on the software side of the market related to the AI revolution may come back to the forefront and investors would be wise to diversify across the entire AI ecosystem and not just try and find the next hot.
 Semiconductor or chip stock but we are now well into that kind of searching for derivative plays trade.
 I mean before two three years ago the AI story was all about the hyperscalers right those mega cap technology and communication services companies.
 But I'm looking at shares of caterpillar right now caterpillar construction equipment which are up 50% so far this year and up about 150% over the past 12 months because that has become a derivative play.
 Artificial intelligence what exactly do you do and look at to create that basket of AI it's not just all tech these days.
 It's exactly why I created my air seven basket of stocks to compete with the mag seven the AI revolution seven which spans the entire ecosystem you mentioned caterpillar.
 I might also mention companies like ACOM or Mcore that are also involved in data center construction.
 How about a company like digital realty one of the largest operators at data centers in the world with over 300 existing and operating data centers.
 But as you know Dom these data centers require tremendous amounts of power and they run very hot which introduces utilities into the equation for the power side and cooling solutions for the cooling side.
 We've been talking about burden for a couple of years right now but then you look at companies like a Modi manufacturing or a comfort systems that are also providing cooling solutions.
 If in fact Jensen Wang is correct Dom and by the end of this decade there's somewhere between three to four trillion dollars spent on AI infrastructure.
 Well the infrastructure play is where you'll see growth opportunities for the next few years until a lot of these hyper sailors start to get an ROI on all of the spending that's taking place now.
 Look for where the money is being spent not who's spending the money.
 All right and then one final point before you let you go here.
 How important are interest rates to this AI expansion story capital expenditures are a big part of it so debt is also a component of that capex story as well.
 With without a doubt and I don't think investors should be looking for too much from the Federal Reserve this year perhaps we get one rate cut of 25 basis points.
 That's the Fed suggested in their March dot plot chart of course Kevin Worsh is now taking the home and he'll be overseeing his first meeting later this month but we shouldn't expect too much more in terms of interest rate reductions and interest rate hike isn't in our base case right now.
 But if in fact that straight or poor moves remains closed for too much longer and the inflationary pressures that go alongside with that perhaps an interest rate height may enter the equation and that could slow down the economy.
 That could slow down the air revolution so stay tuned for more details on that hopefully we do get a resolution soon.
 A lot of complexity and nuance for sure. Kevin Mon and Henny and Walsh thank you very much we'll see you soon sir.
 Thank you Don.
 A lot more to come here at morning call including a fresh test for the software trade speaking of technology showing increasing signs of life as the retail crowd dives back in to software stocks plus we talk with the CEO of another retail crowd favorite red wire.
 We're moving into the booming business of space and defense ahead of space X's highly anticipated IPO and then later on Greg Able not stopping with his deal for Taylor Morrison homes the big bet the brochure CEO is making on one very well known tech giant.
 A very busy hour still ahead when morning call returns after this commercial break.
 Welcome back to morning call the software sector which was left for dead earlier this year on worries about AI disruption is in fact very much alive thanks to a broadening out of the hot AI and chip stock trade data from vendor research shows that the IGV ETF the chart you're seeing right there.
 Saw record retail buying in yesterday's session topping the previous high set back in early February by around a 40% margin we've seen huge moves and some of the individual software names post earnings in recent days including snowflake and octa we're going to hear from another one today Palo Alto Networks reports after the closing bell that stock by the way has doubled just over the course of the past three months alone.
 Let's now bring in Fatima Boulani co head of US software research over at city someone I got to imagine Fatima that's been busy as all heck these days giving shifting narratives about fundamentals on the corporate side and the broader macro narrative around just how dead software really is.
 Take us through the interesting story lines in your mind and whether or not that software trade is dead because the so called saspocalypse.
 Thank you for having me I'd like to say cybersecurity has been the exception in the broader sell off in the enterprise software space and to your point earlier both Palo Alto Networks and crowds strike which are the bellweathers of this space those stocks have been on a torrid run but you know substantially the entire performance on a year to day basis has transpired in the last four weeks and what's really changed in the last four weeks well I would say two things number one.
 The fear and the loathing around the frontier labs of the AI native companies that has you know very swiftly melted away in terms of these companies abilities to encroach on what crowd strike and Palo Alto are doing fundamentally and secondarily a concurrent realization that you can't really rely on the labs to be able to a guard rail and secure we're going to be novel systems that are going to be in the market.
 So that's really what's created a sense of exception for the cybersecurity names that were you know circa two months ago thrown where the babies thrown out with the broader software bath water but we've certainly seen more discernment and nuance in the market and understanding that that's just not the way it's going to play out and certainly we don't think so.
 The development in the world towards a genetic AI and eventually artificial general intelligence about just how much that cyber security theme is going to have to play out and and going to have to evolve.
 You mentioned crowd strike you mentioned Palo Alto is the bellweathers are they the only ones within cyber that you really want to turn to right now I think of fortnet is another name how exactly do those cyber names differentiate themselves.
 So crowd strike and Palo Alto again truly the bellweather names and that's for two very important reasons those two companies sit at extremely critical control points on your IT infrastructure stock so they're already there they've got the beach front a state so to speak in terms of sitting on your end point and sitting on your network these are the most important places that a vendor wants to be and should aspire to be.
 Secondly, both these businesses have scale to become multi product franchises so the individual scale of certain products within the umbrella of these companies could be standalone companies on their own so in a market that we're in right now where traditional buyers and IT decision makers chief information security officers are absolutely inundated with the type of technology that's coming out of the labs.
 The last thing they want to do is experiment with new security vendors so a lot of the work that we've been doing for the better part of last six months and the better part of the last year is understanding and appreciating that decision makers want to buy from vendors they trust and by virtue of crowd strike and Palo Alto being in those important places in the network and already commanding a decent chunk of wallet.
 Actually this is where this is those want to spend more and effectively these companies right a first refusal as it relates to anything AI related or wrapping AI related security in these agent systems and agent AI as you mentioned.
 All right Fatima Boulani it sounds like the expectations are high for that cyber space as well going into these earnings reports we appreciate it and we'll see you again soon thank you.
 All right we're going to hear more on Palo Alto's results when the company CEO Jim joins our own Jim Kramer exclusively on mad money later on tonight at 6 p.m. Eastern time a big conversation with the Keshe Rower coming up on mad money.
 Straight ahead on the show anthropics looking to get a jump on the competition in the race to go public why our next guest isn't necessarily sold on its potential valuation.
 And as we have to break a check on Northern star resources names we don't talk about very often here shares are closing up 13.5% in Australia multiple reports that Elliott management has taken a $1 billion stake in the gold mining giant calling for Northern star to carry out a strategic review and consider a potential sale Northern star resources up 13.5% in Australian trading morning call this back after this.
 All right turning to anthropic now looking to get a leg up on rival open AI in the race to go public confidentially filing its IPO and the topic did not disclose the size or the terms of the offering.
 Now when it comes to the timing of officially going public users on call she leaning towards a late fall trading debut for the company as you can see there before September 1st to 37% chance but before October 1st at 68% and before November is trending at 89% on call she right now.
 Last month anthropic revealed it had raised $65 billion in fresh funding giving it a valuation at that level of $965 billion putting it ahead of open AI which is preparing its own IPO later on at some point speaking exclusively to CNBC yesterday open AI CEO Sam Altman playing down the race to go public.
 I think there is a a race to deliver the best technology and build the best business but you know going public is a financing event and I don't think that's one that we're focused on the timing of we'll do it when we think it makes sense.
 But you will do it as well.
 All right those are big IPOs coming up for more let's bring in Sarah Coons the managing director over at Cleo Capital I guess maybe what stands out to me is the trajectory and speed at which some of these shifts between open AI's momentum.
 And Claude slash anthropics momentum have taken shape what exactly does it say to you this newest development on open AI maybe not going public as soon as anthropic does.
 I think that it's going to be tough to be the last man standing in this sort of unholy trinity of IPOs this year of of SpaceX Anthropic and open AI and you know Sam has expressed a lot of ambivalence about being a public company CEO.
 We certainly know that they're not as focused on figuring out a path to profitability they're burning a lot more money and right now they're also making less of it so it's unclear if the market is going to be as excited about open AI as they are about anthropic.
 Why do you call it the unholy trinity I wonder what the factors are that make the three of those in your mind quote unquote unholy.
 I mean you look at those revenue multiples you look at you know particularly with SpaceX as some of those rewards that that Elon has baked in from himself some of that unconventional sort of shifts they've made in terms of when they're going to be listed in the big exchanges when you know a lot of mainstream Americans retirement accounts are going to be buying into these whether or not they want to and it is not businesses usual.
 Okay so in that unholy trinity would it be fair to say that you like this anthropic story more than say the SpaceX or the open AI and make the relative case between those three.
 Yeah I mean I think that a lot of this right now is about storytelling all of these companies do things make things right but the valuation that they want and the amount of money that they are trying to raise against their revenue against their kind of non existent profit margins makes it a case of storytelling and I think that anthropic has a really strong story you know I think that going after enterprise more was the right move versus consumer.
 I think cozy enough to the Pope was the right move I think that they're telling a story of we know that AI has concerns we see what's happening with the data centers and we're trying to make this as useful palatable cheap and profitable as possible and I think that that's very different in the story that Sam and Elon are telling all right and then one last point we got a few moments left before we let you go here.
 Google slash alphabet big capital raise one of the biggest capital raises of all time 80 billion dollars among multiple sources brochures one of those pieces quick thoughts on whether you think this is a good move for Google.
 I continue to think that Google is borderline undervalued when you look at the fact that Google essentially has its own anthropic in the form of deep mind.
 And they're also doing a lot of Elon's greatest hits with things like Waymo I think that people still struggle to understand the value of all of the different businesses inside of alphabet and so yeah this is a big expensive fundraise but I still think that they are well priced and a little bit under appreciated.
 All right a four and a half trillion dollar company under appreciated and Sarah Coons thank you very much we'll see you soon.
 All right still on deck for the show the skyrocketing investor enthusiasm around space investing we're going to talk to the CEO of red wire.
 A space X's IPO upcoming IPO gives his stocks and others in the space feel fresh fuel more than doubling in just the last month I guess it's rocket fuel at this point as we have to break though checking the price of sugar coming off its best daily gains since late April.
 Key factors driving those gains include elevated energy prices impacting production and concerns over what's expected to be a strong El Nino weather pattern season.
 Sugar prices on the rise but down fractionally this morning morning call continues after this.
 All right that's a live shot from Washington DC not far down the road from where the CNBC CEO council is happening later on today I'm Dominic Chiuin from Morgan Brennan welcome back to morning call.
 Checking US equity futures after all three major indices close their fresh record highs the Dow is now implied lower by just around 190 points the S&P lower by about 10 points the tech heavier Nasdaq 100 down by just around 20 to 25 points.
 Watching energy on mixed messaging from the president and Iran on the state of talks and the war over there on balance US benchmark crude prices down one and a half percent to $90.73
 International benchmark prices for Brent crude $93.47 off about a similar one and a half percent point amount tracking treasuries ahead of the big Joltz report coming on this morning you can see here the benchmark 10 year no yield just a hair below 4.44%.
 The two year no yield 4.025% and the 30 year long bond 4.957% some of the stocks to watch this morning HPE share soaring after blowing past expectations with its latest quarterly results those shares again up about 26% also watching Nvidia after closing up over 6%
 yesterday on the back of that new PC chip announcements and then micron also up over 6% yesterday closing above the $1,000 market level for the first time ever.
 Getting a check on global markets a mixed session in Asia markets in Europe though are higher in early action you can see there the NK 225 add on your record highs gave up about one quarter of 1%.
 Checking some of this morning's latest headlines the Trump administration's announcing a new proposal to slap 25% tariffs on goods from Brazil over what the White House calls quote unquote unfair trade practices US trade rep Jamison Greer says that while the president has had several.
 Constructive meetings with Brazil's leader the two sides continue to have substantial differences the development comes after the White House announced plans to reduce tariffs on agricultural equipment in a push to reduce costs for US farmers and manufacturers.
 Meanwhile the Trump administration is planning to drop its controversial $1.8 billion weaponization fund to compensate alleged victims of the Biden administration.
 This according to sources speaking to MS now the president's proposal had faced bipartisan pushback in Congress.
 We just hit by the way on this with Sarah Coons but alphabet revealing it plans to sell 80 billion dollars in stock to help fund its AI build out ambitions.
 The move comes after the tech giant revised its CAPEX forecast this year to between 180 and 190 billion dollars that happened back in April.
 Berkshire Hathaway by the way jumping on that opportunity to invest in alphabet shares buying 10 billion dollars worth of that offering the deal adds to Berkshire's position in alphabet which has been rapidly building over the last three quarters became one of the conglomerates largest holdings.
 And a jury has found famed short seller Andrew left guilty of securities fraud the US charged left who ran citron research for allegedly manipulating the stock market and defrauding investors with misleading claims about his positions in multiple companies including the likes of Nvidia and Tesla.
 He faces the potential of more than two decades behind bars when he sentenced later on in August.
 Now to the latest on the aftermath of the explosion of a blue origin rocket as you are seeing right there this happened again last week.
 NASA's chief is telling CNBC it will take quote unquote serious time to repair damage to that launch pad.
 The incident coming at a critical time for blue origin which is seeking to compete on the level of big arrival SpaceX.
 Speaking to our own Morgan bread in yesterday at the CNBC CEO council summit Jared Isaacman says 2028 timeframe is quote unquote within the realm of possibility.
 We're all getting organized generally around the idea that we we we certainly want to see blue origin be very successful so recovering getting the pad recovered providing subject matter expertise root cause analysis for sure.
 Let's figure out what's what's broken and then we got to keep moving forward we're going to need a lander available for Artemis 3 testing.
 All right to the competitor SpaceX expected to kick off the IPO road chauffer investors next week if out of what could be the biggest IPO ever later on this month.
 The company is setting aside 5% of the shares in that offering for certain employees and individuals chosen by top executives there that's according to a new regulatory filing out just yesterday.
 Those people would be exempt from any post IPO lock up restrictions well anticipation and excitement over the SpaceX IPO has lit a fire rocket fuel fire under space related stocks this year rocket lab shares are 75% this year.
 AST is up more than 40% into it machines has more than doubled in value another that's benefited from investors looking for proxies in the SpaceX trade in the public markets is red wire.
 This is the maker of components for satellites and spacecraft those shares have doubled in just the past month alone.
 So joining me now for that story is red wire chairman and CEO Peter canito Peter it has been amazing to watch what the stock is done over the course of the last year but the absolute bulk of that has happened in just the last four to five weeks.
 What exactly in your mind was the catalyst was at all SpaceX and what exactly are you trying to do to capitalize on this attention on space.
 Here and of course the last month and the last quarter quite frankly has been very good for red wire certainly SpaceX is a big part of it as they really put a spotlight on the industry and I think bring much more awareness to really what's going on in space that I think a lot of investors didn't realize and quite frankly a lot of the
 public doesn't totally understand this incredible time we have in terms of the growth of capability in space and of course as you showed their NASA administrators goal to return humans to the to the moon.
 So it's a great time to be in space. I think the SpaceX IPO is representative of that but red wire also had a really strong quarter from a bookings perspective we had talked back in 2025 about how there was a build up of demand associated with the government shutdown in the fourth quarter and what we had talked about proved to be correct that
 a number of bookings from the US government for space were coming out and we saw those bookings happen in the first quarter our orders were actually almost double our revenue for the quarter so it was it was a great time to have a really strong quarter from an orders perspective.
 And we have a lot of momentum and then the SpaceX IPO coming out and starting to put a spotlight on the sector with large has been kind of a nice moment.
 Peter you mentioned that there's a little bit of an information or knowledge gap in the public with regard to some of the things that you actually do.
 We talk about things like avionics we talk about things like uncrewed unmanned aerial systems drone technology that sort of stuff and you mention of course space given SpaceX.
 Exactly is the kind of business break up of what red wire does because there is the space component as you point out eventual people in the moon and Mars and then there's the defense technology side of things which is getting a lot more spot like these days because of what's happening in Iran and Ukraine.
 What's the business split look like and what do you want to evolve it towards.
 Yeah well in the most simplistic approach it's about 50 50 between space and defense tech and essentially at the end of the day red wire is a critical infrastructure company we provide.
 As you showed up there a moment ago five critical value drivers everything from next generation spacecraft.
 To as you mentioned uncrewed airborne systems and and these are fast moving swim lanes right now in terms of rapidly growing infrastructure.
 I mentioned the return to the moon I think people are realizing that space is a critical aspect of national security and there's a lot of investment if you look at US defense budgets.
 And quite frankly even European and global defense budgets going into space right now and then of course the effectiveness and the criticality of drones on the battlefield that we've seen in Ukraine.
 Iran and other areas also underscores that how they have become to future national security architectures red wire is operating in both of those areas and that's been a real tailwind for us.
 And Peter before we let you go there's a lot of focus right now on build out costs infrastructure costs debt and equity wise are any plans in place that you have to raise capital.
 Well so we on both sides of that equation did pay down some debt earlier in the year while at the same time we did announce that our last earning calls the three hundred and fifty million dollar.
 At the market capital raise a very efficient tool for raising capital with low fees and low cost so yes we are in fact raising and if you look across the industry in addition to SpaceX.
 All the big names are raising capital because of the opportunity is just that extraordinary that now is the time to be scaling.
 Getting market share and building capability.
 All right Peter can you do chair and CEO of red wire thank you very much please come back and see us again soon with some and any any any kind of update you have on space and defense tech.
 Thank you all right a lot more to come here on morning call including the AI on the ballot how the red hot tech is turned into a hot business button issue as voters in two states
 head to the polls today that story on morning call back after this.
 Welcome back to morning call voters in several states are heading to the polls today casting their ballots in key primary contests.
 One of the biggest issues in some of the more competitive contests is AI with the red hot technology creating a clear divide amongst democratic candidates Emily Wilkins joins us now with what that great divide is and just how important it is to many of these election contests Emily.
 Morning Tom well yeah look some voters they're going to be waiting in today about how they feel about the future of AI and AI regulation you've got a couple different AI packs that are playing in several of these democratic primaries but they're chosen candidates are now facing attacks from within the party showing that there is a stark divide right now among Democrats when it comes to how that they are going to actually handle AI.
 So a couple key races we got one in New Jersey's eighth district that's right across the river from Manhattan where AI pack leading the future which is backed by executives from open AI and in recent Horowitz among others they spent more than six hundred sixty thousand backing congressman Rob Menendez that led to progressive challenger moose of Ali to call Menendez out in a video saying that he can't be trusted to regulate AI if he's accepting money from them.
 We're seeing a similar dynamic across the country playing out in the race to succeed Nancy Pelosi a different AI pack is invested in that race they're called public first action they see themselves as more pro regulation alternative to the industry back pack although they have indirect support from anthropic so in that California race the pack has spent half a million backing Scott winner who of course it was a supporter for a major AI bill that passed in California.
 But that financial support led to his progressive opponent show about chakra party to tweet that all that the AI lobby has entered our race to bank roll my opponent Scott winner that's because he worked with them to water down AI regulations in California AI oligarchs want to control your future I will fight to put people back in control.
 AI packs have also spent money in Iowa and Montana house phrases those voters are also going to be heading to the polls today and I really think at the end of the day this speaks to the fact that you are seeing some key differences in the democratic party when it comes to whether or not to work with these tech companies or whether there's a sense that they need to really be kept at arms linked as Democrats figure out regulations.
 This is a cross section of Silicon Valley Wall Street and K Street for sure Emily Wilkins thank you very much for the story on the state of AI and politics straight ahead on this show the morning call crews assembling team up the training day ahead and why one member is bullish on one slice of the tech trade set to face a fresh test today that story coming up.
 Welcome back it's time now for your call sheet where we look at the topics driving the trading day ahead the crew members today our Tim Seymour of Seymour asset management he's also a CNBC contributor we've also got Gina Martin Adams of HB wealth and Chris Hodge of Nittix's C.I.B. in the Americas thank you very much crew for assembling here for us this morning let's start with our first topic which is the Iran ceasefire lack there of some kind of
 new development that we don't have yet all a lot of anticipation here let's start with you Gina on this one here from a strategy standpoint this is headline driven but the markets have seemed to become a little bit more I guess tempered with any kind of expectation market volatility included what's the take on Iran's ceasefire or lack thereof.
 Yeah I mean the take is the situation the Middle East is still very volatile the market is trying to look through it for now very focused on earnings and economic data this week as long as the earnings and the economic data come in strong.
 The market is generally going to default to an assumption that this is not particularly meaningful for fundamentals in the short run I think it's not an issue for markets until it extends quite a bit longer resulting in potential earnings
 pressure in the second or third quarter earnings season for now the market is willing to look through this the other issue watch of courses the Fed.
 And what accelerated inflation may mean for the Fed in the second half of this year so I would watch the bond market as a key signal as well for where equities may going in the future months.
 This the bond market has been behaving relatively well let's say relatively well they're still extended the yields to the upside since the war began but they've been trading in a fairly tight range what does that suggest to you about the impact of the Iran war.
 I think the suggestion from this is that the American economy doesn't need $60 a barrel per oil to function very well but not having the possibility of oil rising to about $150.
 The $50 is a huge is a huge benefit so I think capping that upside is more important than bringing oil prices down to pre war levels.
 And Tim the market is again at record highs we're going to give back maybe a little bit at the opening bell although I will point out Nasdaq futures did now just take positive on the session so far.
 What is it that the market's getting right or wrong about the price action vis-a-vis Iran.
 Well I'm getting pointed out I think the earnings dynamics been extraordinary I think also we've had reaffirmation of different parts of the AI trade the fact that software and semis are leading that's 30% of the S&P.
 I mean just technically you have a dynamic where this is this is enough to drive indices to to all time highs the out performance the relative out performance so triple cues making relative highs to the S&P.
 The semis leading that cues move until we see that breakdown the market is clearly looking past what's going on in Iran and yes I agree there's there's pressure on rates here.
 Tim I want to move us on to the next topic because you gave me the perfect segue here there are individual stories here within that kind of tech trade overall.
 We'll get more data points from Palo Alto Networks from CrowdStrike from some of these earnings reports coming up including retail by the way with dollar general Victoria Secret which is now VS XY is there ticker very sexy or Victoria sex whatever you want to call it.
 There's a lot of reads going on right now Tim what are you watching for specifically.
 Well I think Palo Alto is a good example of just one of the most extraordinary terms in the perception of software and I don't know who we want to give credit to the real catalyst.
 Whether it was snowflake but the turn in the software look at the IGV is is extraordinary Palo Alto had been dead money for four years it's almost as if the assessment of AI and where software fit into the future of both the spend and where
 authentic was going to have its life well Palo Alto it's almost as if it needed this existential threat stocks up 100% off the list it frankly it's not cheap.
 What I think we want to hear is is really that incremental security side of the software spend but the platform strength at this stock it's it's up 100% since April 10th so I actually think the bar is kind of high here going in for these guys but I think the movement software is part of what.
 Clearly has been this next phase of rotation Gina can we talk about the consumer we've got reports coming up from I mentioned Victoria secret ultra beauty dollar general what exactly has the earnings season taught you about the consumer so far in the face of Iran.
 Well look consumer stocks have definitely been a laggard outside of consumer companies that have some kind of tech influence and that's because the consumers really not the story this year.
 I think we're going to continue to hear that retailers are not producing fantastic growth when we look in the aggregate brought retail earnings are up single digits in a market where earnings are up nearly 30% year over year that's reflective of the fact.
 The consumer is not doing particularly well they're not doing terribly unemployment is still fairly steady the unemployment rate is not rising wage growth is okay but wages are rising at a pace that's more than inflation.
 So the consumers just participating not necessarily leading I think the lower income consumer is in particular is definitely going to continue to show some struggle higher energy prices higher food prices you just can't get around it.
 Okay and Chris last word to you very quickly please Jolts and jobs data is it going to be important.
 Yeah of course you know I think we are going to see a steady uptick in the headline inflation over the next few months and there has been optimism that the labor market has stabilized a bit and should that optimism continue it will allow the Fed to keep its focus firmly on inflation.
 All right thank you very much for the call crew today thank you very much squawk box starts right now.