CNBC Halftime Report: The Fate of the Record Rally

Date: September 23, 2025
Host: Frank Holland (in for Scott Wapner)
Panelists: Josh Brown, Joe Terranova, Jim Laventhal
Major Themes: Market rotation, sustainability of the record rally, AI and tech sector capex, Fed policy, labor market

Episode Overview

This packed episode dives into the persistence of the current stock market rally—fresh off record highs for both the S&P 500 and Nasdaq. The Halftime crew unpacks what’s driving the uptrend, debates whether the rally is narrow or broadening, and scrutinizes recent AI-related spending and its ripple effects on tech bellwethers like Nvidia. They also preview the highly anticipated remarks from Fed Chair Jerome Powell, focusing on the interplay of rates, inflation, and employment.

Key Discussion Points and Insights

1. Market Rotation & Leadership (01:17–11:00)

• Rotation Between Tech and Broader Market:
  Joe Terranova observes that investor attention shifts day-to-day between “the Mag 10” (top tech stocks) and the “490+” (rest of the S&P), likening it to the ‘odd/even’ gas restriction days of the 1970s (02:08). When tech lags, other sectors (banks, energy, small caps) rise, and vice versa.

  "It's like one day it's the Mag 10, the other day it's the 490 Plus... The calendar works in your favor as we move towards the end of the year."
  — Joe Terranova (02:08)

• Mean Reversion and Broadening:
  Josh Brown emphasizes the importance of ignoring daily noise, focusing on long-term leadership by large-cap tech names. He argues that historically, bull markets are marked by concentration at the top, and today’s tech dominance isn’t anomalous—it’s earnings-driven (04:27–07:04).

  "Every bull market has had concentrated winners at the top. It's almost a hallmark of how you know you're in a bull market when there's leadership... This is being driven by earnings."
  — Josh Brown (05:04)

• Expanding to Small Caps:
  Jim Laventhal brings attention to small caps, arguing that future market strength could be broad-based. S&P 600 small-cap earnings are projected to match or beat those of large caps in coming quarters (07:56–09:46).

  "What if for the foreseeable future, it's no longer the 493 versus the 7? What if it's the whole market?"
  — Jim Laventhal (08:07)

2. Rate Cuts, Sentiment & Catalysts (09:46–11:00)

• Role of Rate Cuts:
  Discussion centers on whether rate cuts are necessary for the rally to sustain. Joe believes profit margins and earnings matter more than policy.

  "I don't think it's a requirement that you get two more rate cuts for the rally to keep going."
  — Joe Terranova (10:34)

3. AI, Nvidia & Capex Concerns (11:00–23:34)

• OpenAI’s Stargate & Nvidia Investment:
  Reporter Mackenzie Sigalos provides an on-the-ground update on the massive AI data center expansion and Nvidia’s $100 billion investment, noting the biggest constraint is power, not capital (11:19–12:42).

• Bubble or Virtuous Cycle?
  JPMorgan’s warning about vendor financing sparks a comparison with the tech bubble of 1999–2000. Josh Brown acknowledges the risk but draws key distinctions: this capex cycle appears less leveraged and more strategically driven (13:26–15:44).

  "These investments are going to be made anyway... It's a little bit different than what we've seen in prior Capex booms."
  — Josh Brown (14:44)

• Is AI a Bubble?
  Jim Laventhal and Joe Terranova agree it’s not a bubble yet. While acknowledging inevitable corrections, they stress fundamentals remain strong and multiples for leading names have actually contracted, unlike in historic bubbles (16:11–23:34).

  "Will there come a point in time where the AI trade is a bubble? Almost certainly. Is it now? Almost certainly not."
  — Jim Laventhal (16:20)

  "Bubbles are built upon leverage. I'm not sure what we're doing right now is building upon leverage..."
  — Joe Terranova (17:48)

• Market Reaction to AI Slowdown:
  Consensus is that the precise 'inflection point' will be unknowable in advance; what matters is positioning and risk management rather than trying to time market turns.

  "You could have a bear market within a bull market... Sometimes the answer is just position size."
  — Josh Brown (21:09)

  "If you look at [Nvidia], three years ago it was around 50 times forward earnings and now it's around 30 times... that's not what happens in a bubble."
  — Jim Laventhal (22:27)

4. Sector Spotlight: Energy Stocks Best Picks (25:32–30:32)

• Josh Brown credits Valero, Marathon, Baker Hughes, Phillips 66, and Chevron as top performers within energy, offering detailed chart analysis, technical pivots, and risk management strategies for each.

  "Valero is number one. I call this an A plus chart... Marathon is also an A. Not quite an A plus, but getting there... Baker Hughes as a B+..."
  — Josh Brown (25:38–28:58)

  Joe shares his own portfolio moves, highlighting that refiners have outperformed on stable oil prices and that recent trades have been shaped by risk and momentum.

  "The refiner trade in energy is probably where you have the strongest momentum in terms of price and in terms of earnings growth."
  — Joe Terranova (29:09)

5. Breaking: Fed Chair Jerome Powell Headlines (34:01–37:57)

• Powell Preview & Initial Takeaways:
  Ahead of Powell’s speech, Eamon Jabbers highlights the Fed’s updated risk assessment:

  • Downside risks to employment are rising
  • Upside risks to inflation
  • No “risk-free path” ahead; current stance is "modestly restrictive"
  • Unemployment rate has edged up, job creation slowing, inflation driven by tariffs

  "The unemployment rate is low, but it has edged up and there's market slowing in both supply and demand for workers."
  — Eamon Jabbers, summarizing Powell (34:12)

• Panel Reaction:
  Joe warns job-creation stats could be distorted by immigration and says the jobless rate is the vital metric; Jim expects the Fed to remain data-dependent and questions whether it can act proactively.

  "The unemployment rate is what you should be focusing on, not job creation... We've had upticks before and the Fed responded with rate cuts."
  — Joe Terranova (35:59)

  "Will the Fed be prophylactic [with cuts]? It's an open question. I think that's what Chairman Powell is going to say: wait on the data."
  — Jim Laventhal (37:11)

6. Notable Quotes & Memorable Moments

• On Tech Leadership:
  "Technology is mandatory to have in your portfolio right now."
  — Joe Terranova (07:06)

• On Market Participation:
  "Just be in it and enjoy it."
  — Jim Laventhal (09:46)

• On Watching for Inflection Points:
  "I don't think anyone can identify the inflection point. You only really see the inflection point after it occurs."
  — Joe Terranova (20:33)

Timeline at a Glance

• [01:17–11:00]: Rotation between sectors, market breadth, outlook for tech and small caps
• [11:00–15:44]: Nvidia/OpenAI investment, discussion of the capex “bubble” risk in AI
• [16:11–23:34]: Analysis of whether AI is entering bubble territory, panel perspectives on sector risk, leverage, and positioning
• [25:32–30:32]: Energy sector analysis—Josh Brown’s top picks
• [34:01–37:57]: Breaking news—Powell’s speech, panel reaction on labor and rates

Summary of Takeaways

• The rally shows resilience despite day-to-day rotation; leadership in tech is earnings-driven, historically typical, and not cause for alarm.
• Concerns over bubble risk in AI are noted but generally dismissed based on low leverage and strong fundamentals.
• The market is broadening, small caps show promise, and participation outside of mega cap tech is increasing.
• Rate cuts are not seen as necessary for further upside, but earnings and profit margins are crucial.
• Powell’s cautious stance is likely to keep the market data-driven and forward-looking on both rates and employment.

For investors: The meta-message is to remain diversified, maintain exposure to market leaders, be mindful of the cycle’s progress but don’t try to outsmart inflection points, and watch for sectoral momentum both in tech and in energy.

Note: This summary omits all commercials, intros/outros, and non-content elements per instructions.