CNBC’s Fast Money: "Volatility Spikes as Rates Drop… And China’s Growing Chip Demand"

Episode Date: October 16, 2025
Host: Melissa Lee with Steve Grasso, Courtney Garcia, Dan Nathan, Guy Adami, and special guests Dan Ives, Rick Santelli, Chris Maranack, and Madrigal Pharma CEO Bill Sibold.

Episode Overview

This episode dives into a choppy market day marked by a sharp uptick in volatility (VIX), falling treasury yields, and a rout in regional banks. The panel analyzes the causes and implications of these moves—debating whether they signal deeper market trouble or simple profit-taking—while also exploring key news on biotechs, tech’s AI wave, and a fresh look at Chinese chip demand. The episode features actionable insights for investors, sector spotlights—biotech, regional/larger banks, cloud—and memorable, candid reactions to breaking news and interviews with industry experts.

Key Discussion Points and Insights

1. Market Reversal & Volatility Spike

• Backdrop: The S&P 500 swung nearly 2% intraday, closing down >0.5%. The VIX hit 25 (highest since May), and 10-year Treasury yields fell below 4%.
• Fears & Flight to Safety:
  • Steve Grasso [02:23]: “I think [lower yields are] a perceived flight to quality… On a 40-point handle day lower in the S&P… there’s no way the VIX should be at 25. It’s clearly trying to tell the market something.”
  • Gold’s concurrent rally seen as another risk-off signal.
• Profit-Taking or Signals of Deeper Problems?
  • Dan Nathan [03:07]: Downplays shutdown/tariff fears as major market drivers, instead focusing on the pain in regional banks and risk that AI euphoria can’t save the market this time:

    “If we’re about to lose a couple of these banks… what saved us back then? …It was really the interest in this AI trade. At this point, I don’t think AI can save this sort of situation.”

  • Melissa Lee [04:30]: Suggests cash on the sidelines (from institutional investors) could cushion corrections and spark rebounds, moderating longer-term worry.

2. Yields, Fed Policy, and Balance Sheet Moves

• Safe Haven Flows:
  • Dan Ives [05:02]: Views rate moves as “safe haven”—some China/government shutdown concerns, but forecasts the Fed will lower rates and end QT soon. Notes rarity of 10-year yields below Fed Funds Rate.
• What is SOFR Telling Us?
  • Rick Santelli (CME) [07:53]: Connects the explosion in SOFR (Secured Overnight Funding Rate) to broader tightening in credit, despite the Fed aiming to ease.

    “Check engine light is on on the US economy. But I don’t think the engine’s going to break down… SOFR is basically the oil in the gears of the funding market.”

3. Regional Banks in Focus

• KRE ETF Plunges: Regional Bank ETF KRE down nearly 7% after Western Alliance, Zions disclose problematic loans.
  • Steve Grasso [06:26]: “If things were as robust as the market suggests, KRE should not be at these levels.”
• Expert Guest, Chris Maranack (Janney) [12:03]:
  • Downplays contagion risk—banks have “a lot of capital…earnings to handle this noise.”
  • Notes that short-term panic tends to subside, expects buybacks, continued M&A, and that “tightening of credit is going to be temporary.”
  • Guy Adami [14:47]: Questions what private credit’s boom means for risks; Maranack acknowledges higher leverage/risk in private deals but says major problems should be rare.

4. Large vs. Regional Bank Strategy

• Panel’s Take:
  • Dan Ives [17:11]: “Since SVB, you really don’t want to go with the regionals… Stay with the money center banks—they have the most capital.”

5. Biotech & Weight-Loss Drug News

• Breaking: Presidential Comments Sink Pharma Stocks [17:39]:
  • President Trump claims weight-loss drug prices “coming down significantly,” sending Eli Lilly (-4.6%) & Novo Nordisk (-3.7%) sharply lower.
  • Eamon Javers (CNBC) relays [18:19]: President’s comments at odds with Dr. Oz (CMS), who says “We don’t have a deal just yet.”
  • Dan Nathan [20:42]: Notes investor unease when government intervenes:

    “When this administration comes… you can’t say no to them. There might be some situations… that are uneconomical for these companies.”

6. Oracle's AI & Cloud Guidance

• Oracle Surges after Analyst Day [24:11]:
  • Cloud revenue forecast for 2030: $166B (from $10B in 2024); cloud infra margins 30-40%.
  • Larry Ellison [24:54]: “None of the other three big cloud vendors do that… they are primarily tech platforms.”
  • Panel Skepticism:
    • Dan Nathan [26:12]: “30 to 40% [margin] seems a really tough road…[Oracle is] a distant fifth cloud provider—you have to spend tens of billions… this seems like, I don’t know, they’re going to be the patsy in this whole thing.”
    • Dan Ives [27:10]: “The market just needs to hear they refute the margin topic… you kind of have to hold your nose and just buy the stock.”

7. Lululemon Downgrade & Retail Competition

• Bernstein Downgrade [29:38]:
  • Cites markdowns, “worsening traffic,” concerns over new product line from “unproven designer.”
  • Courtney Garcia: Sees possibility for a turnaround given low valuation (~13x forward), but upside unclear; increased competition from Nike/Skims, aloe, Vori.
  • Dan Ives [30:17]: “Too much competition. I don’t know if the new unknown talent person is going to be able to move the needle, but I’d stay away from the stock.”

8. AI & China’s Growing Chip Demand – Wedbush’s Dan Ives

• Wedbush Channel Checks from Asia [34:30]:
  • Dan Ives [34:37]:

    “Demand to supply for Nvidia chips, it’s about 10 to 1, maybe 12 to 1. Street’s underestimating numbers by anywhere from 20 to 30% in the next 12 to 18 months… We’re only in the second inning… this is going to continue.”

• Taiwan/China Export Controls [35:38]:
  • Demand for Nvidia chips in Asia still “probably up 20%” vs. three months ago—even with Chinese export controls.
• Huawei as Challenger:
  • Dan Nathan [36:41]: Asks about Huawei’s self-developed chips amid US export controls.
  • Ives [37:08]: Calls it a “huge opportunity” for Huawei and highlights Alibaba/Baidu as “prime position” AI leaders in China.

9. Biotech Deep Dive – MASH/Liver Disease Drugs

• Madrigal Pharma CEO Bill Sibold Interview [39:54]:
  • Rezdifra, first FDA-approved MASH drug (March 2024), faces competition from new entrants (e.g., Wegovy).
  • Sibold [40:12]: “Having more entrants is really helpful… drives awareness, treatment… so much market development left that this can support multiple products entering it.”
  • On Big Pharma Competition/Buyout Potential [42:16]:

    “I’ve competed against the biggest of big. That doesn’t scare me at all… this is a specialty market… We feel we can compete against anyone. And by the time the next competitor comes, we’ll be that many more tens of thousand patients into it.”

10. Charles Schwab & Trading Boom

• Q3 Beat Yet Shares Drop [45:40]:
  • Strong trading revenue; added >1M new accounts; 30% YoY volume jump.
  • Dan Nathan: Flags concern over stock underperformance despite solid news:

    “This is a stock… that has not confirmed any of the new highs in the S&P 500… Not that optimistic that investors are willing to reward that news right now.”

  • Melissa Lee: Highlights the influx of Gen Z and Millennials as a healthy demographic trend for retail trading.

Timestamps for Important Segments

• Market Reversal & Volatility/Regional Banks: 01:02–07:37
• Rick Santelli on Yields & SOFR: 07:53–11:21
• Regional Banks Deep Dive – Chris Maranack: 12:03–16:56
• Panel on Large Banks vs. Regionals: 17:11–17:32
• Breaking News: Weight Loss Drugs/Pharma Selloff: 17:39–21:36
• Oracle AI/Cloud Analyst Day: 24:11–27:27
• Lululemon Downgrade/Panel Reaction: 29:38–30:43
• Dan Ives – Asia AI Chip Demand: 34:30–37:43
• AI/Cloud "Second Inning," Quantum Trends: 38:39–39:04
• Madrigal Pharmaceuticals CEO Interview: 39:54–45:08
• Charles Schwab Trading Revenue/Panel: 45:12–46:28

Notable Quotes & Memorable Moments

• Steve Grasso [02:23]:

  “There’s no way the VIX should be at 25. It’s clearly trying to tell the market something… I think this will be a day or a week we’ll come back to in the months to come.”

• Dan Nathan [03:07]:

  “If we’re about to lose a couple of these banks… what saved us back then? …It was really the interest in this AI trade. At this point, I don’t think AI can save this sort of situation.”

• Rick Santelli [07:53]:

  “The check engine light is on on the US economy. But I don’t think it’s that the engine’s going to break down. We need a little more oil in the crankcase because SOFR is basically the oil in the gears of the funding market.”

• Dan Ives [34:37]:

  “Demand to supply for Nvidia chips, it’s about 10 to 1… Street’s underestimating numbers by anywhere from 20 to 30% in the next 12 to 18 months.”

• Bill Sibold [42:16]:

  “I’ve competed against the biggest of big. That doesn’t scare me at all… This is a specialty market… We feel we can compete against anyone.”

Fast Money Panel’s Final Trades

• Dan Ives: Churchill Capital Corp. (Quantum tech—“best positioned quantum company”)
• Courtney Garcia: Schwab (SCHW) as a potential opportunity after earnings-related dip
• Dan Nathan: Fade Oracle—skeptical about projecting multi-year high sales multiples
• Steve Grasso: The just-revealed “Fast Money” 2026 calendar (humorous plug)

Summary

This episode of "Fast Money" tackled the day’s surge in volatility and sinking yields, exposing a market at a crossroads: Are we witnessing early warning signals, or is this more healthy profit-taking in a robust year? Panelists sparred over the meaning of Gold’s rise, the VIX spike, and regional bank underperformance, while guests like Rick Santelli and Chris Maranack parsed Fed policy, SOFR stress, and the true strength of bank balance sheets. The rapid-fire format shifted to weight-loss drug policy’s impact on big pharma, bullish AI/semiconductor calls (especially in Asia), and deep dives into cloud, retail, and biotech stocks. Unfiltered, skeptical, and full of actionable debate, the episode equips investors with a clear-eyed look at sector skirmishes and the underlying currents beyond the day’s headlines.