The Exchange – CNBC – September 8, 2025

Main Theme & Purpose

This episode of "The Exchange" delivers a packed rundown of the day's critical business and markets stories, with extra focus on technology sector dynamics, the interplay between Fed policy and stocks, the upcoming Apple event, inflation outlook, and the shifting competitive landscape for Tesla and EVs. The hosts, Mike Santoli and Melissa Lee, are joined by notable analysts including Dan Niles, Steve Kovach, Samik Chatterjee, Steve Liesman, and Scott Kroner for deep dives and discussion.

Key Discussion Points & Insights

1. Markets at a Crossroad: Mixed Performance Amid Rate Cut Expectations

Timestamps: 00:54–03:30

• Market Overview:

  • NASDAQ reaches record highs, led by semis (notably Broadcom); mega-cap tech (Amazon, Tesla) outperform, while real estate and utilities lag.
  • Commodities like gold surge to an all-time high ($3,600/oz), with gold miners ETF up dramatically.
  • 10-year Treasury yields hit new lows (3.497%), signaling anticipated Fed rate cuts.

• Macro Narrative:

  • The market remains attached to a "Fed will cut rates" narrative, buoyed by weaker economic data.
  • "It's very difficult to dislodge one of these entrenched market narratives when you haven't gotten overwhelming evidence that you should go away from it." – Mike Santoli [01:51]

2. AI Adoption and the Tech Trade: Opinions from Dan Niles

Timestamps: 03:30–12:03

• AI Adoption Deceleration:

  • New data (Apollo, MIT) signals AI adoption is slowing, notably among large enterprises.
  • Dan Niles urges caution: stock prices may be “pulling forward” gains; fundamental improvements from AI are less clear.
  • “Don't confuse what stock prices are doing with what's actually going on fundamentally, because those two things can be completely different for short periods of time. And that's what you have going on right now.” – Dan Niles [04:24]

• Examples:

  • Meta's internal AI team restructures and possible partnership with Google/OpenAI.
  • Apple’s promised AI features for Siri are delayed, possibly requiring partnerships post-antitrust decision.
  • OpenAI’s massive projected spending/burn to reach forecasted revenue.
  • Recent misses on datacenter revenues by Nvidia and weaknesses at Dell and Marvell support Niles’ caution.

• Market Drivers:

  • Easy money and rate cuts are the main drivers of tech stock rallies—fundamentals “don’t matter” right now.
  • “Forget about valuations, forget about fundamentals, it's all about easy money. And the party is going to continue right up until it doesn’t. My thought has been that's around Thanksgiving." – Dan Niles [08:07]

• Q&A on the AI Pull-Forward:

  • Niles expects possible disappointment post-Thanksgiving: much demand has been pulled forward due to buyer anticipation of rising prices and tariffs.
  • Rate cuts may not be enough to save the market if a recession sets in, drawing comparisons to post-2001 and 2008 cycles.

3. Apple’s Product Launch Outlook: Hardware vs. AI Hype

Timestamps: 14:40–22:00

• Event Preview:

  • Apple set to unveil a new iPhone with a major redesign (rumored as the “iPhone Air”), the first major overhaul since 2020.

• What Drives Upgrades?

  • “An executive at a major wireless carrier told me over the weekend, customers aren't even asking for artificial intelligence when they upgrade. Instead, they want hardware features like a better camera or longer battery life, along with what this executive called eye catching new designs.” – Steve Kovach [15:35]

  • Foldable iPhones expected in 2026, major redesign in 2027 for 20th anniversary.

  • Price increase speculation: possible first hike in base model price in five years.

• Apple’s AI Position:

  • Slow AI rollout is almost a blessing—can partner with established AI model providers rather than build from scratch (Anthropic, OpenAI, Google).
  • “They can take their sweet time now because customers don't seem to be climbing for [AI] the way we thought they were a year ago.” – Steve Kovach [17:31]

• Investment Take (Samik Chatterjee, JP Morgan):

  • Apple's premium valuation tied to predictable, resilient growth from its large user base and services, not rapid growth.
  • Most upgrades driven by necessity or hardware desire, not AI features.
  • Partnering on AI lowers CapEx/OpEx burden versus peer companies, offering potential financial advantage.

4. Stock Additions to the S&P 500: Robinhood & Applovin

Timestamps: 23:42–25:44

• Both companies pop on news of S&P 500 inclusion; history suggests “joining the index” pop is a one-time event, not a forecast of future outperformance.
• “I always like to point out Tesla has underperformed since the day it went in the S&P.” – Mike Santoli [24:15]
• Discussion of how companies are chosen for the index, and that newer additions tend to be more volatile and expensive.

5. The Inflation Outlook, Fed Policy, and Stagflation Fears

Timestamps: 27:17–32:17

• Fed’s Dilemma:

  • Stagflation risk is present: weak jobs (“stag”), and sticky services inflation (“flation”).
  • Upcoming inflation data (producer prices, core CPI) critically important; 3.1% core inflation expected for August.
  • Market is fully pricing three rate cuts this year; September cut remains likely barring an inflation shock.

• Market Reactions:

  • Bond yields compress despite moderate/sticky inflation—consensus is on weaker growth, not inflation panic.
  • “The bond market has been really curious... They are not focusing on, not demanding a higher inflation premium.” – Steve Liesman [31:08]

• Stocks vs. Macro:

  • "The equity market is not anchored to a 2% target. 3% inflation longer term... is totally compatible with stocks doing fine." – Mike Santoli [30:35]
  • Market breadth is expanding beyond the big tech names, signaling possible broadening rally if the Fed eases.

• Sector Playbook (Scott Kroner, Citi):

  • Expect continued tailwind from AI; market approaching fair value but with more room if AI investments play out over several years.
  • Small caps and rate-sensitive sectors (“laggards”) are starting to catch up; expect volatility into the Fed’s meeting, but a year-end rally is likely if cuts continue.
  • “The 9% ish earnings growth expected for the S&P this year, literally your mag 7 contributing half of that." – Scott Kroner [35:55]

6. Tesla’s Shrinking EV Market Share and New Competition

Timestamps: 37:57–43:05

• Tesla Update:

  • Tesla’s U.S. EV market share hits a low (38%), down from >80%, as legacy automakers and Chinese entrants ramp up.
  • General Motors, Ford, and Toyota making gains; elevated August sales driven by U.S. federal tax credits expiring in September.

• Global Competition:

  • European market is particularly competitive, with new Chinese EVs (e.g., BYD, Xpeng) entering at lower price points despite tariffs.
  • BMW and Mercedes compete in the premium segment—market growth is at the lower end.

• Tesla’s Narrative/Valuation:

  • Tesla’s trillion-dollar market cap can’t be justified on auto sales alone; core story now rests on robotics, autonomous, and AI solutions.
  • “As a pure automaker, that valuation makes no sense at all. But Elon Musk has pushed a new narrative and for the most part the investment community has bought into it, that the future is robotics and autonomous and AI as well.” – Phil LeBeau [42:23]

7. Gold Rally & Gold Miners Outperformance

Timestamps: 43:05–44:42

• Gold hits a record $3,600/oz; gold miners ETF is up 98% year-to-date, outperforming the metal itself.
• Margins for miners expand as costs stabilize (oil down, labor steady) and gold price surges.

8. Rapid Fire: IPOs & Stock Picks

Timestamps: 44:42–47:02

• Klarna set for long-anticipated IPO at $14B; speculative pop-and-fizzle pattern likely, as seen with Figma and Circle.
• Summit Therapeutics drops on lung cancer drug trial disappointment.
• Oracle higher ahead of earnings as analysts turn bullish.

Notable Quotes & Memorable Moments

• “Don’t confuse what stock prices are doing with what's actually going on fundamentally, because those two things can be completely different for short periods of time.” – Dan Niles [04:24]
• “Forget about valuations, forget about fundamentals, it's all about easy money. And the party is going to continue right up until it doesn’t.” – Dan Niles [08:07]
• “An executive at a major wireless carrier told me over the weekend, customers aren't even asking for artificial intelligence when they upgrade. Instead, they want hardware features like a better camera or longer battery life, along with what this executive called eye catching new designs.” – Steve Kovach [15:35]
• “As a pure automaker, that valuation makes no sense at all. But Elon Musk has pushed a new narrative and for the most part the investment community has bought into it, that the future is robotics and autonomous and AI as well.” – Phil LeBeau [42:23]

Timestamps for Important Segments

• [00:54–03:30] Market recap, narrative, rate cuts & sector moves
• [03:30–12:03] Dan Niles on AI adoption slowdown & tech fundamentals
• [14:40–22:00] Apple event preview, hardware vs. AI upgrades, valuation discussion
• [23:42–25:44] Robinhood & Applovin S&P 500 inclusion analysis
• [27:17–32:17] Inflation outlook, Fed rate cuts, market implications (Steve Liesman)
• [32:41–37:39] Scott Kroner (Citi) on equity outlook and market breadth
• [37:57–43:05] Tesla EV market share and competitive landscape (Phil LeBeau)
• [43:05–44:42] Gold prices and gold miner stocks
• [44:42–47:02] Rapid Fire: IPOs (Klarna), Summit Therapeutics, and Oracle earnings preview

Overall Takeaways

• Tech stocks continue to ride easy money and rate cut expectations—regardless of fundamental signals.
• AI adoption inside companies is a murkier, slower story than stock rallies suggest.
• Apple’s coming event will likely hinge more on hardware than breakthroughs in AI, with “iPhone Air” in focus.
• Index additions create short-term stock pops but aren't predictive for long-term outperformance.
• Inflation remains sticky, but growth remains a more immediate concern for markets and the Fed.
• Tesla’s automaker dominance is receding under competition and shifting global market dynamics, but its valuation persists through tech-optimism about AI and robotics.
• Gold and gold miners continue their rally; new IPOs remain speculative and volatile.

The episode highlights that while headlines point to AI and tech innovation, the true market driver is macroeconomic policy—and investors continue to bet on rate cuts, with Thanksgiving (and the holiday retail cycle) seen as a potential pivot point for the market's exuberance.