Stocks Rally On Optimism For End Of Iran War… And Apple’s Mag-7 Outperformance 3/31/26

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Here's what's on tap tonight. Stock markets spiking midday and Brent crude taking a steep leg lower on hopes that an end to the Iran War could come soon. Did investors get ahead of themselves or have we put in the bottom for equities? And Nike shares dropping even as the athletic wear giant scores or Nurung's beat the details on those numbers. And what's next on the agenda for CEO Elliot Hill? Plus Nvidia's latest $2 billion investment. Oracle plans another massive round of layoffs. And Tim Spicer, Karen Spicer too. About time. Going a 52 week high. Yes. What is driving the games? How much more upside is left in the healthcare trade? I'm Melissa Lee come to you live from Studio B at the Nasdaq on The Desk Tonight. Tim Seymour, Karen Finerman, Dan Nathan and Guy Adami. And of course we start off with that midday surge that sent stocks to their best stay since last May. The S&P 500 climbing nearly 3% after Axios reported a potential breakthrough in the war with Iran. The Dow added more than 1100 points while the Nasdaq jumped almost 4%. Meanwhile Brent crude fell more than 3%. They're still settled above the $100 mark. Let's get to Aiman Javuz who's got the very latest on all of this. Aiman. Hey there Melissa. China and Pakistan are floating a new proposal to end the war in Iran. Essentially a ceasefire in exchange for safe passage in the Strait of Hormuz. President Trump has said publicly that negotiations are ongoing. And if Iran doesn't cut a deal that he likes by April 6th, he's going to bomb civilian infrastructure such as power plants. Now the president took to social media this morning to hurl some criticism at American allies who we argue have been insufficiently supportive of the United States. He wrote that France has been very unhelpful and he warned that the USA will remember. And he wrote of the UK, I have a suggestion for you. Number one, buy from the US. We have plenty. And number two, build up some delayed courage. Go to the Strait and just take it. You'll have to start to learn fighting for yourself. The USA won't be there for you anymore just like you weren't there for us. But what many countries appear to be doing Melissa is cutting side deals to pay Iran for safe passage of their ships, creating a significant new revenue stream for the Islamic Republic that did not exist before this war. And we are expecting to see the president here momentarily at the White House on camera. So if he makes any additional news there, we'll bring that to you right away. And I know we discussed this on the four o'clock, Aiman, but in terms of the report that actually sent the markets moving in the 12 o'clock hour, that is a report that had information on it that you had said existed out there before. So I mean this was just this notion that there could be an end to the war even without regaining control of the Strait. Yeah, I mean the Iranians have said, you know, we have terms for the end of the war. We will agree to an end of the war if our terms are agreed to. They've said that for, you know, well over a week now. You know, but their terms include things that Washington presumably won't agree with like permanent control and sovereignty over the Strait of Hormuz and reparations and payments from the United States for damage that American missiles have done in Iran. Those are the kinds of things that make it, you know, sort of a no-go deal proposal. So for the Iranians to say, you know, yes, there are conditions under which we would end the war is one thing, but it really depends on what those conditions are and if they're realistic for the U.S. administration to agree to them. Right. Aiman, thanks. Aiman Javres in Washington. Even with today's pop, markets still sharply lower in Q1. The S&P down, NASDAQ all seeing their worst quarter in four years. All three in fact are only back to where they were last week, Thursday, to be exact. So how do you make sense of today's headlines? Does that euphoria last? What are we looking at here? What do you think? Well, I thought the VIX was impressive and I think we've talked a lot about the quarter end dynamics that have also been in the VIX and the options expiry that we had recently that also I just, it's hard for me in a world where peace is still not really defined what it is. The U.S. or how do we view Trump's approach to just saying, you know what, I'm tired of this and it may be time just to kind of move on. I mean, that's a dynamic that I think is pretty clear. Whatever has been negotiated and I'll lead politics to other places. I just think for the markets, what was most profound to me was, for example, looking at banks. The bank's rallied to me on a relative basis on an up day. You know, Citibank's 5.5% move back above the 50. This was really powerful. This is some sense that if you can actually begin to get some kind of a settlement that the cyclicality of the market is actually got a shot here. And I think as we go into earnings season, it really is very important because I think we've all speculated that it's going to be very difficult for companies not to take advantage of this and downgrade. Right. And to that point, I mean, the rally that we saw in semiconductors very strong, up to 6% on the SMH. Well, it was interesting that, you know, the move in oil itself, the underlying, which you'd think would be as good a proxy as the move in the market would be. And I'm sort of leaning towards the oil as telling the truth of the situation. I think a lot of what happened here oversold for sure. But I got to think a lot of this is window dressing. We are at the end of a really difficult quarter. And so that was that'll help a little bit. But I don't know that that's something that has followed through some things. I do believe are just oversold. Could they go down more? Of course. But so there was a little bit of a bounce there. Some things bounce like, you know, three Sigma moves that are, you know, I don't know if that's something that we can can survive longer term. But I don't it's nice. I'm always long. So a day like today is certainly better than 20 of the last days. But I don't know that the situation has really changed. Yeah, I agree with you on the oil movement. It was surprising that it's still solidly above 100. I mean, the collapse, there wasn't a collapse in oil that you would think you would see if you really believe that there was an end to the war in sight. And you didn't see the reaction in bonds as sharply that you would think you would see if you thought the end to the war was in sight. Yeah, I agree with Karen. I mean, stocks up, bonds up, oil up. I mean, just gold up. It just seemed like one of those days where it really did feel like month end, quarter end, that sort of thing. I mean, I think that got going. I mean, we opened up on news that didn't seem particularly new. And then obviously it got pushed midday or so. You know, the semi move is interesting. I mean, the semis have shown this great relative outperformance. But I think a lot of things that were going on prior to the war are probably still intact. If anything, they're probably a little bit worse. And, you know, a ceasefire doesn't mean a whole heck of a lot unless you have the Israelis participating, unless you have some sort of guarantees that it's going to go a bit of a distance here, because you do need to get some things back in equilibrium as it relates to, you know, the straighter hermuz. I can't imagine it's just going to reopen tomorrow and everything's going to be, you know, flowing again, that sort of thing. And then the other thing is let's just call it what it is. I mean, Amon said this, you know, the president is threatening war crimes. I mean, you basically cannot target civilian infrastructure like power plants and the like. So how do you trust an actor like this? And this is coming from one of the most untrusted, you know, like worthy, you know, countries that exist in the world, you know. So to me, I just feel like this was a snapback a little bit. I think probably if you get a follow through tomorrow morning and there's no new news, I think you've faded. I think you've faded the semis. I think you've faded the S&P 500 right here. And then as that can particularly, a lot of technical damage has been done over the last few weeks. People learn less and so I mean, it was last April, we were just talking about a few minutes ago on your other fine show. C-Bot, I believe. Closing bell over time. I like that. About the V-Bot in April and how I think people have the memory that I'm not going to get caught again this time trying to fade it because they saw how powerful it can be. I think it is a little bit different in terms of some of the setups and some of the valuations around what we're seeing now. But I think in this environment, people want to get left behind. I still point to the same things that we're pointing to. A VIXA 25, I think is problematic. Oil did not collapse. It's still a triple digit commodity, at least for today. We'll see what happens tomorrow. And a 4% move for the NASDAQ is great over the course of a week or seven, eight trading days over the course of four hours. I don't think that's all that healthy. And I have a question in terms of getting back to where we were. You're allowed to ask them. That is my job in fact. You're very good at it. Let's say the war is done and things go through the straits still. In theory, there should be a higher risk premium embedded in the price of oil from now for the foreseeable future. I mean, the insurance costs will be much higher and just the threat of war is that much more real. And so won't we still see higher for longer oil prices, which will of course impact the price of WTI too? Yeah, I think so. Plus you would also want to see surplus building, right? Right. So aside from whatever the, you know, what did we use to have a hundred and something teens, million barrels per day demand worldwide. Maybe it gets a little bit higher than that. Maybe there is some destruction of those that can use oil right now because things have been destroyed. But I would think that there would be a persistent, you know, demand for oil above where it had been. There's no question. And I think if you also look at what's gone on in the ag space and what we've seen in terms of spikes in palm oil and rice in soy. I mean, these are dynamics and we've talked a lot about the ag impact. So it's, it's, there's no question. And I would also go back to, I say, I've said this a few times and it's even more clear now as you ask that question, which is that $65 oil is certainly not something we're going back to. And $65 oil was a boom to the U.S. consumer. And in hindsight, it looks a lot better and a lot clearer than it did at the time. And I think that's something we need to think about as we evaluate, you know, where we are, even if we settle tomorrow. For more on the Market Rally and what to expect in Q2, let's bring in Wall Street Bull, Venu Krishnan, Barclays head of U.S. equity strategy and global equity linked strategies. Venu, great to have you with us. What did you make of the action today? It all depends on what you think about the war situation. And clearly today the news was good. But I recognize that it all depends on the next tweet and what's going to happen. But clearly, I mean, the single biggest overhang in the market is to, for how long this crisis lasts and then, and then what is the sort of, when you come out of it, what are the implications? So I think broadly speaking, our view is that in the history of geopolitical risks, over the last 10, 15 years, has been that most of it has been generally contained geographically, and it's normalized relatively soon. So I think you can argue that the market has been somewhat pampered to follow that view. And already the Middle East crisis is broader in terms of Saudi Arabia, you know, Oman, Bahrain, Kuwait, the list goes on. But I think the view is that there will be a resolution and that's our base case. And that's why we've approached it from a scenario analysis standpoint. So if things would go wrong, we have a downside case of 5900 for the S&P. But we raised our price target and we raised our earnings estimate last week. And that's why we're getting all the attention. So let's just say it ends tomorrow. Let's say it's the best case scenario. It ends tomorrow. The straight is open. There's no tolls and nothing. Everything goes back to the way it was, except that maybe oil prices remain high for some. Is that the scenario that gets you to your new higher EPS and price target estimates on the S&P 500? Yeah, at the core of it, I think the view is that the U.S. economy is a lot more immune to this crisis compared to the rest of the world. Asia is the most exposed. So is Europe to a great extent. But U.S. as a net energy exporter is in pretty good shape. But if 20% of S&P earnings come from overseas, can we really be immune? If those earnings are in question in any way because of higher oil prices, because those economies are much more impacted. Sure. The question is how high is the oil level you're talking about? 85 to 100. 85 to 100, we think the U.S. economy can absorb. It will make some impact on consumption. And in fact, in getting to our 7650, we do assume that consumption declines and we do assume that global economic growth takes a hit. But we also assume that the U.S. economy is going to be relatively more resilient. And that's how we get to those numbers. Part of the reason is one of the most interesting facts we see right now is for the first time in ages, at this point in time, normally the earnings revisions go down about 150 basis points. Right now, it's up 400 basis points. That's a 550 basis point delta in good part driven by the part of the market which has derated the fastest, which is technology. Right. Well, I'm sorry to interrupt, Vinu. And so I get that when we look at mega cap tech, it looks very attractive. And if you look at NASDAQ 100 relative to S&P, that discount or trading down to a relative discount relative to where we've been. But help for the folks that haven't read your report, help people understand how you're upgrading EPS here. In other words, how do you get to a scenario where things look rosier today than they did, quote unquote, yesterday? Yeah, I think how it looks rosier is first on the earnings front. So if you look at the earnings momentum, 3Q to 4Q, it is tremendous. So we were expecting S&P earnings to be 11% at the beginning for last year. We ended at almost 14.5%. And right now for this year, we're expecting 15% to 16% earnings growth, which is where even consensus is. In fact, for the first time in five years, we were actually below consensus. And then by the time we upgraded the numbers, consensus ran ahead of us. Right. So I think it is an earnings momentum. It's an important question where that is coming from. It is still predominantly coming from broader tech. But when you think about what broader tech means, that is 45% of the market, because we do include names like Amazon, Meta and Google in tech, not in consumer discretionary or not in other communication services. So if you define broadly what tech is, software is under trouble, but even software earnings are up, revisions are up, but they have derated because of the disruption risk. So I think that's one. On the other hand, what's interesting is to get to 7650, we've actually reduced our multiple assumptions compared to the beginning of the year to recognize that we are in a very different macro environment. So we take a some other parts approach where we break the market into tech and rest of S&P. Tech itself, we break down into big tech, rest of tech and rest of S&P. We've taken down the multiples for big tech and tech, and we've kept reasonably close to fair value estimate for the rest of S&P. And still, when you do that, you get to 7650. But the base case view depends on this Middle East crisis getting resolved over the next two months. If it doesn't, we have a downside case of 5900, and clearly the downside is a lot higher than our upside case of 8200, for example. So the risk reward is still there. We recognize that the left tail is fatter than before, but there is no doubt that the U.S. economy is its upswing and it is all dependent on the tech cycle we are in today, and that's a valuation note we wrote today also, looking at CAPE as one of the metrics, for example. And that is the biggest driver in the U.S. economy. It's transformative, and we believe that. And the derating is tremendous. I mean, big tech as a group was trading at 31 times forward earnings. We ended last year at 28 times. Yesterday, we were at 22 times. That is approaching the rock bottom for that. We would be a buyer of that any day. As long as the rate of earnings growth far exceeds the rate at which the multiple is compressing, you saw that last year. They returned 23 percent. S&P returned 18 percent. 30 plus percent earnings growth, 10 percent multiple compression. You got double-digit earnings growth. We think that repeats itself, but to a scaled-out version. Venu, great to see you. Thank you very much. You're welcome. Venu Krishnan, what do you think, Karen? Makes sense. It does. It does. I like the way you laid it out. It's hard to not be swayed by the noise of what's happening now. Would I try to do that? And I'm still pretty, Mag7 heavy. You co-hosted The Squawk Box this morning. Yes, I did. And why were you there in replacement of... Becky and Andrew. Becky Quick, who was where? In Omaha with Warren Buffett. Of course she was. And did you watch the interview? I know you did. And he said a 5 percent solve that we're currently in the midst of is nothing, and he's waiting for more. And the $380 billion or so on the balance sheet now, a trillion-dollar market cap company, suggests that's exactly what he's doing. So listen, I understand the optimism, enthusiasm, you made great points, but that interview, I think, if you didn't see it, you should watch it. And here, Warren had to say. Math. That was great, right? The thing is, is that we do see signs of accelerating earnings, right? So 14 and a half, it kind of beat expectations in 2025. I think that there's no way that you see an acceleration from the period that we've had, especially you just asked the question earlier. It's not like you're going to flip the switch and things are going to get back going. And I think it's just also important to remember, we had a big GDP miss. We had a really disappointing labor report, the non-farm payrolls. So I don't get a sense that things were actually accelerating the economy. And the other thing is, yeah, earlier this year, we heard about 2026 cat-backs for the hyperscalers. But man, if these stocks continue to go down, if we continue to see just some of this squishy action in and around tech, I just can't imagine they live up to that. And we know that that's been a good part of GDP growth for the last two years. Meantime, we do want to get to Nike. Those shares running lower after us. Sports for a giant dropping. Despite a top and bottom line beat, China revenues and gross margin coming in ahead of Wall Street expectations, but North America revenues fell short. The stock was up more than 3 percent in today's regular session. And it is down at after our session lows down 4.2 percent. The conference call is underway right now. It's 18 minutes in. But what was your take on this quarter? Well, I think with Nike, they don't, I don't know if they reported guidance yet, which is really important. That doesn't happen for the call. So, you know, it could be anything. In the past couple of years, it's been bad. But I don't know, there was a couple of green shoots there. Not a terrible quarter. I think I don't think a lot of would to job to get back remotely close to where they were. The growth, you know, the growth is the numbers were not bad. China, I think was great, but it probably better than people expected. But I think it comes down to they're not showing they're not gaining on a competition. This quarter just suggests to me the competition is still a problem and that margins are still seemingly under pressure. It seemingly got their inventories in line good for them. But, you know, the margin pressures are real and the valuation might still be a little bit too rich. And listen, I think we're, I think we're trading a 10 year lows right now in the after hours, which is significant. The optimism on the street about this name and about Elliot Hill has been increasing. And yet here we are. I think that's right. And I was pretty bullish. And I think I remain despite this, these numbers. And North America is a huge disappointment. I mean, it was up, it was up 8%, 9% in last quarter. The expectations where they were going to stay, they were starting to see inventory dynamics really turn around. I'm less focused on China here than their core business. So yeah, disappointing. But I do think that this is a story that largely has been de-risked. Let's wait and see where she trades tomorrow and the call. She, yep. She. And we'll keep an eye on how she trades in the after hours session. We'll also bring you the headlines from the conference call as we have them again. We're about 20 minutes into the conference call. Hopefully we'll get some guidance too. Plus the details out of NVIDIA's latest investment with the CEO had to say about the new stake in Marvell and the growing AI ecosystem it is building for itself. Do not go anywhere. Fast Money is back in two. What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women changing the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Powerplayers. New episodes every Tuesday wherever you get your podcasts. Keep it down. Go to Tim. Maybe. Tim was eating three musketeers. Right. Stuck in his teeth. Anyway, welcome back to Fast Money. NVIDIA inking a $2 billion deal with Marvell for the next stage of its custom AI chip buildout. Marvell shares jumping nearly 13% their second best day of the year. Christina Parson-Aubilis here on set with all the details. Christina. Well, the deal really centers on NVIDIA's platform that lets custom chips plug into its infrastructure system. Marvell designs those custom AI chips for major tech companies like Amazon. They also compete with NVIDIA's GPUs. But this partnership kind of flips that dynamic, giving NVIDIA a shot at a much bigger market because it's opening it up to competitors. Something that actually was news last May. And then also giving Marvell a capital infusion and positioning Marvell as a core AI infrastructure peer. Marvell is just the latest investment, though, for the chip giant. This month alone, NVIDIA has committed $2 billion each to nebulous, momentum, coherent, before that $2 billion into synopsis, a billion into Nokia, stakes in XAI, open AI, Intel. The money just keeps going out. So why the spending spree? Well, NVIDIA isn't just selling chips anymore. The CEO often reminds investors at every event that it's not a chip company anymore, but rather an AI infrastructure firm really trying to own the entire AI factory or ecosystem. Locking in the suppliers that build the optical networking, the custom silicon, and the interconnects. Those companies become financially and strategically tied to NVIDIA's ecosystem. The takeaway, though, is NVIDIA is definitely spending aggressively to make sure the AI build-out runs through its ecosystem no matter whose chips end up on their racks. A lot of these investments, though, are in exchange for revenue back, correct? Not this case. Not with Marvell. Not in this one, though. Unless there's going to be more details inked out over the next little while, but this was just a $2 billion investment. And the news about using Marvell's custom chips in NVIDIA systems, that actually came out last May. So that's not the newsy part for this piece. How do you think about, as an NVIDIA shareholder, all the different stakes it has in other companies and the valuation of NVIDIA itself? Well, they're generating so much money that they have plenty of money to do this. I never loved the idea of investing in your supplier or your customer. That seems to be the way it happens now. I do think that NVIDIA, at this price, if I owned none, I would buy some here. I think the sentiment around it is pretty bad, and I don't think that it should be. 165-ish, if you go back to July of last year, that's where basically the floor has been a few times over the last effectively nine or ten months. So we held where we needed to hold. With that said, I mean, it's still below the 200-day moving average, which is now sloping lower for you technicians out there. And I get it, the optimism around quarter-end and stuff, but I think we can all say that on what's been a decent tape until recently, NVIDIA since October-November has been an underperformer. Yeah, I'd just say that this is either going to go really well or really poorly. And just again, we have a sense of history when you kind of create these sorts of ecosystems based on investment, right? I don't know if you have the sort of deals, you have the sort of interlocking activity, if you don't have the investment. And so when I think about, Karen just said this, 90% of their revenues come from GPUs. And I think the lock-in is really important. But when they're doing these deals, let's say these custom Silicon with Marvell and you're keeping it locked in, it is with their other core customers, right? And then when you think about that 75%, 76% gross margin, what I hear, what I see is that there's going to be pressure on the gross margin. So they have to kind of broaden out their appeal to a whole heck of a lot of folks that are going to be doing the custom. And the other thing is, it's like they just announced this lower power, the GROC chip and everything like that. Well, they've invested in Intel for CPUs and everything. It just seems very complicated. And I think the slightest downturn, and I just have to imagine that no one's going to be valuing Nvidia on the, you know, the valuation of their investments or the quality of their investments. But that's the point. And what they're doing is they're making a holding company. Holding company is traded at a discount to some of the parts. It also sounds like they're vertically integrated. And this sounds like a big industrial company from the 1900s. I know that's not what's going on here. But they're trying to have footprints all over the growth of what was at one point the industrial revolution. So, you know, I get it. I don't think it's good for valuation. Thank you, Christina. Christina Bartzenevola. Coming up, we're keeping an eye on shares of Nike after hours at the conference call underway, where the company has to say about guidance, plus the results moving shares of RH as well. You're watching Fast Money, live from the Nasdaq market site in Times Square. Back right after this. At Tui, we give you more. More outfit choices with 20 kilograms of luggage allowance as standard. More hotels built around what you love, like that swim-up suite. More race you to the bottom, water parks on site. More, ooh, that looks good. Food options from poolside snacks to ala cart dining. Book on app, in-store or online. You book it. Tui sort it. At all and after protected, keys and Cs apply, selected hotels only see website for details. Don't know what it's like in your house, but keeping everyone entertained can be a nightmare. Take the pressure off with EE's award-winning TV and full-fiber broadband, with Netflix now, TNT Sport and more. And get their most powerful Wi-Fi 7 as standard, so everyone can stream their films, series and sport at the same time. Switch to EETV and broadband today. New BT Group customers only. 62% UK availability terms applying. What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women changing the game. One of my favorite pieces of advice. Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting. Life is short and you just got to think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday wherever you get your podcasts. Welcome back to Fast Money Stocks. Surging to wrap up the first quarter in hopes of a breakthrough in the Iran War, the Dow climbing more than 1,100 points. The S&P jumping nearly 3%. It's best day since May and the Nasdaq leading the gains up nearly 4%. Oil meantime settling lower but still above $101 a barrel. Despite today's rally, stocks closing out a rough quarter. All three indices selling off. The Dow falling 3.5%. The S&P nearly 5%. The Nasdaq dropping more than 7%. Take a look at shares of Meta jumping more than 6%. It's best day since January. The social giant beginning to test premium subscriptions on its platforms, giving users more functions on Instagram, Facebook and WhatsApp. The company looking to add new revenue streams to offset AI costs. And a condiment combination. Excuse me? In the grocery aisle. Spice giant McCormick announcing it will buy Unilever's food business, which includes brands like Hellman's Mayonnaise. McCormick will pay a combination of cash and equity in a deal that values a portfolio at nearly $45 billion. And another after-hours mover shares of RH. What a drop here. After missing estimates on the top and the bottom line, the company also lowering Q1 for your revenue growth guidance. That stock is down 16.3%, which is off the after-hours session lows. Yeah. Actually, yeah. That, I mean, this is sort of a disaster. I mean, the quarter was really terrible. The guidance was also really terrible. Understandably, maybe there's some conservatism in there. Why not? But also, it seems unfortunate the timing of their growth in Europe, which they spent a ton of money. And I'm sure it looks fantastic. Europe is clearly under some stress right now. So, you know, over time, that'll work out. But this, it'll be interesting to hear the conference call, you know, Karim Minzik, he's very colorful. Okay. This is what I find. Inventories were down almost 20% year over year against sales growth of maybe up 4%. So what it appears to be, given the margin compression, is they just basically put everything out for sale and got rid of their inventories, which I think, given that we're in an eight year low and valuation is actually somewhat reasonable, you might be actually looking at a pretty short term bottom here in restoration or whatever the RH core. RH. Alright. Coming up, oil pulling back, crude and Brent, both taking a leg lower today on the latest developments out of the Middle East, where the energy trade is heading next and what we can expect in the oil fields when Fast Money returns. Welcome back to Fast Money. Crude oil prices retreating from their highs following reports that U.S. and Iranian leadership have both signaled openness to ending the war. But even with today's pullback, Brent and WTI each closing out March firmly above $100 a barrel. WTI at more than 50% putting its best month since May 2020, while Brent surged over 60% for its best month going back to its inception in 1988. For more on where prices go from here, Lipow Oil Associates President Andy Lipow joins us now. Andy, great to see you. Thanks for having me, Melissa. Let's say the war ends tomorrow. Where do oil prices go? Do they go back to 65? Well, I think if the conflict ended tomorrow, you'd see an immediate drop in oil prices of $10 to $15 a barrel. But I don't think we're going back to pre-conflict levels of $65 a barrel because the market is going to be pricing in greater geopolitical risk throughout the Middle East. If Iran was able to close the Strait of Hormuz once, they probably can do it again. But I would say that the energy shock of today could actually lead to a deep economic downturn in the future, and that would cause a demand destruction, pressuring oil prices perhaps below $65 a barrel. We've seen that in the past. Talk about energy independence and where you think there was going to be real progress in the back of this timeline, and obviously in what part of the, call it, renewables, alternatives. Where's this going to happen? Well, if we think about energy independence in the U.S., it really depends on where you are since we continue to import crude oil and refined products to the east and west coast while we're exporting crude and products off the Gulf Coast. I think now with the events in the Middle East, people are going to be looking at all sorts of alternatives, including nuclear power, coal, wind, solar for electrical generation. But for transportation fuels, there's going to be renewed interest in ethanol, renewable diesel, and biodiesel. And we saw on Friday the administration unveil its renewable fuel standard for 2026, which was an all-time record demand for biofuels. So you can kind of see biofuels coming into the solution of reducing our dependence on fossil fuels or being part of the all-of-the-above approach. And the U.S. economy is pretty resilient. Can it adapt to a prolonged period of time of $95 plus oil, or does at some point just have a huge negative impact on the economy? Well, I think eventually it would have a negative impact on the economy because our economy is tied to the rest of the world. And when I do look at what this energy shock is doing to economies in Asia, whether it's fuel rationing or price caps or other measures to reduce energy throughout that region, I think that eventually impacts on the U.S. given our trade with these various different geographic regions in the world, whether it's Southeast Asia or Africa or South America. And what happens there, I think, ultimately impacts on the U.S. You were talking before about a higher risk premium that would be embedded per barrel of oil. Andy, how should we think about how long that premium lasts when it was sort of a, you know, the unthinkable happened here, the closure of the Strait of Hormuz, and so does that make that premium stickier and longer lasting? I think it does. I think it can stick around for several years. In fact, you know, if Iran were to succeed and become the toll taker for vessel transiting through the Strait of Hormuz, that of course is already going to increase costs and make people, you know, look for other ways around that region. It also increases freight costs and ultimately the price of crude oil and refined products that's delivered around the world. So I don't think the geopolitical risk is going away anytime soon, especially since Iran, excuse me, attacked its neighbors. You know, there's a lot of bad feelings around that's going to take years, if not decades, to overcome. Wow. Andy, thanks for joining us. Appreciate it. Thanks for having me. Andy, what about oil associates? I mean, that's several years for an elevated price per barrel. That's a long time. Well, again, the futures curve, the term structures changed a little bit over the last month, and we'll see. I think we have to settle into higher oil prices. I think we also, if you look at the energy equities, I thought they performed a lot better today than they might have, and it goes back to what we've been saying. I just think the view is that prices stay higher for longer. There are those that are really well positioned in different parts of either the refining space, different parts of the product space, and I think don't just assume that these are places you should be running away from. Yeah, you know, if you're looking at the consumer impact, like, let's just look at California. It's the fourth largest economy in the world, right? You have U.S., you have China, you have Germany, then you have California, right? So we talk about the price of gas at the pump. I think it was like 480. This was like a month ago or something. It's up a dollar, right? But diesel, I think, is really important too, because if you are charging, you know, it goes from five bucks to seven and a half bucks for a gallon of diesel, which is what has happened over the last month or so. I mean, some of that increased cost is going to be passed through to consumers. So it's not just what you're paying for your own gas at the pump. You know, so like, to me, I just think that there's a really neat way you can say, well, this is like all done. But like, you got to think about this also is like, how many of our objectives have we actually achieved over there, right? So the notion that we're just going to have a ceasefire and we're not going to actually get some resolution on those objectives. So again, no one's wishing this. It's just like the unrealistic aspect of seeing this, not even on Twitter, on some other network, where there's a lot of other people, you know, a lot of other people aren't even looking at it. It just seems like a kind of goofy way to run a war. Energy stocks should have done a lot more today, as should have the commodity if there was any veracity to this. And so I think you got to be encouraged by the relative performance of energy stocks today. Coming up, two major takeout deals driving the action in biotech today. We are tackling the latest multi-billion dollar buys from Lilly and Biogen, and we're the sectors headed from here. We're Fast Money right after this. Welcome back to Fast Money. Let's get another check on Nike. I'm taking another leg lower now, down by 8.6 percent after our session lows. We are getting some guidance from the call. cbc.com retail reporter Gabrielle Calruse has got these headlines. Gabby. So Nike's conference call is underway, and the company just reported weak guidance for the fiscal fourth quarter. Finance chief Matt Friend said he expects sales to be down between 2 percent and 4 percent, while analysts had expected sales to be up 1.9 percent. That's going to include some modest growth in North America, but that's going to be offset by an expected 20 percent decline in China. We also got some color for the duration of the calendar year, which is a bit harder to compare it to expectations. Nike expects sales to be down in the low single digits through the end of the year, with again gains in North America offset by declines in China. And the first quarter, fiscal 2027, is expected to be the final quarter of higher year over year tariffs, with gross margin expansion expected for the following quarter. Now, Friend cautioned this guidance as where things stand with the macro as of today. He warned more volatility could come due to the war in the Middle East, rising oil prices, higher input cost, and shifting consumer behavior. Melissa. Was there any nuance, Gabby, in the commentary about the consumer, whether it be the consumer in North America or the consumer in China as the wars progressed? You know, we haven't heard that yet, but we do know that this could potentially lead to higher prices. Shoes are made with lots of plastic. You've already had a lot of slowdown on the consumer overall, so this is something that they could weigh, but they didn't really share with any specific consumer commentary, either China or North America. All right, Gabby, thanks, Gabrielle Fan Rouge. Again, Nike shares down by 8.5 percent at this point. Remember, China's declined and the quarter that they just reported was down 7 percent. The prior quarter was down, I think, was like 17 percent or something like that. So down 20 is a departure, and the North America still is not strong. I mean, there's nothing to like here. This is a lot of... I feel like there's a kitchen sink once with some... I don't know. Like after quarters after the new CEO has come on? Yes, there's a new kitchen sink, and this is... It says, we'll return to providing long-term guidance this fall. They should be out of the guidance business entirely. I mean, you know, I don't think he's doing himself any favors, but this is... Yeah, not good. And you're getting maybe a little look into just the guide on what's going on Middle East-wise and then the impact and what the impact on demand, and that's not good for more broadly what people are looking at. Right. I mean, the commentary that Gabrielle mentioned about the input costs going higher, pressuring margins, I mean, we're going to hear that repeatedly across many different sectors. Margin compression, competition, and the... I mean, there's a lot of things working against them. The lack of growth. This is a... I think this 48 and a half is a 12- to 13-year low in the stock, and at some point you're going to look at it and say, okay, just valuation alone, and the brand suggests, but I don't think it's... I still don't think it's yet, unfortunately. Well, the brand is... the brand is top of the shelf, I think, but the valuation is not good. You don't think after all these quarters of... and years maybe of lack of having the newest, greatest thing that there's not any sort of brand equity damage in the mind of the newer consumers? We all grew up with Nike as being the coolest shoe out there, but there's a whole other generation that do not think that. That's fair. I mean, their whole running... the strategy in running shoes seems to be working. The innovation seems to be back, but again, the EPS story and how this translates into valuation, this is right now north of 50 times, and I don't know what this guide tells you about the coming quarter. I think what Mel says, you've got to get back to basics. This company has like 25,000 SKUs globally. Just think about that. That's across sizes. Go to their website and you look at this stuff and you say to yourself, how do you appeal to brands all over the world? Well, you have 25,000 SKUs, but if you're having brand degradation in some of these places, like China, the Middle East or whatever, I get back to basics here, man. They have some great, great brand loyalty to your point, but it just seems they're trying to be everything to all things. I think with this wholesale retail problem that they've had is really... it's persistent. The wholesale... ultimately, the gross margins aren't as good, but the operating margins are better. I think they've got to try to change the mix more. And by the way, this break below 50, I mean, Katie Stockton was here yesterday, Katie of Fairleaf Strategies and said 50 had been support for a very long time, but yet here we are at 4080. We discussed it last night with the Nike. Yeah, the Nike. Yeah. It's breaking. Now you need a big volume. Maybe you'll get that three, four-time volume day where you flush whoever's left in it out and maybe there's some capitulation, but I don't think you've seen it yet. I think we're going to get down to 8.5% right now. Coming up, more wheeling and dealing in the pharma space. The details on two big deals. That's next. We're Fast Money in Two. Welcome back to Fast Money. Pfizer rising a percent to hit its highest levels going back to November 2024. Today's move, bringing the pharma stocks year-to-date gains to almost 13%. Biotech stocks also surging with the XBI up 7.5% for its best day going back to 2022. Pfizer is Karen and Tim's Pfizer, so they both are rejoicing over this revival in these shares. I've been adding to the position and I've been adding to it because we've been continuing to get pretty decent data. And this Lyme disease data that they have this morning is not really to go out and regionally go by the stock. PADSEV and some of their oncology, I think the impact and the size of these pipelines are pretty interesting. A 6% dividend yield is not awful. And a chart that really, I mean, frankly, it's solidly put in a base for a long time. It's been slow and steady and I do think it's under-owned and I think it's been de-risked. We've got two big biotech deals driving some action today, but the headlines, sending buyers Lillian and Biogen in opposite directions. Angelica Peoples joins us with the details here in Angelica. Hey, Melissa, but these two deals have very different strategies behind them. You have Lillie diversifying its pipeline and then you have Biogen, which is trying to fill some revenue holes. So let's start with Lillie. This is a company that is spending up to $7.8 billion to buy Cintessa and its pipeline of experimental drugs for sleep disorders. So this company is working on a new class of drugs that could transform the treatment for narcolepsy and other sleep conditions that cause drowsiness. And I talked exclusively with Lillie CEO Dave Ricks today who said that this new class called the Rexin agonist could lead to a multitude of uses similar to what we see with GLP-1s. Now, Cintessa's most advanced drug is about to enter phase three, so it will be at least a few years before this deal pays off and Lillie isn't in any rush. It can afford to take those risks and then you have Biogen, right? They're buying a Pellis pharmaceuticals for $5.6 billion up front and this gives Biogen two approved drugs, one for a rare kidney disease and another for an eye condition. And Biogen's been trying to find new drugs that can offset that shrinking multiple oscarosis business. Remember Biogen bet big on Alzheimer's and that really hasn't worked out for them. So this is forcing them to go out and look to find new drugs that can help turn the company around and this is one attempt to do that guys. All right, Angelica, thank you. Angelica Peoples. Of course, Lillie, we're just talking about Lillie and another deal yesterday. I mean, they have been on a string in terms of bolstering their pipeline. A sweet spot for these deals, $6 to $10 billion. So you look at Karen's structure, which is either the S in her stash or the G in her. I'm not sure, but that's something. And then you look at Viking Big Day, InzMed, which is not going to get bought, but that had a big day. These biotech stocks, I know they're painful at times, but I think these are three names you want to still own. I think the sleep drug thing is just interesting to me personally. I mean, good for Lillie. They have, you know, they're making enough money, they can be buying whatever they want. That's sort of a nice position to be in. Good for them. Up next, Final Trades. Final trade time, Timbo. By the way, that was a good three musketeers. I'm just going to say, you know, healthcare, XLV, new guy. Karen, sticking with the healthcare. Glad you enjoyed it. Novo Nordus. Dan. Yeah, Nike, you might get that capitulation the guys talked about. Looks like it'd be a buy. I thought I'd bought $100,000 bars for the team. It turns out I did not. Yeah, it's too bad, which is why you were relegated to a milky one. I got a crunch. Nothing wrong with what I had. That's so precious. The other B used to be Barnes. Now it's Barak. All right. Thanks for watching Fast and Mad Money Starts right now. What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women changing the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. 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