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Costco's quarterly results Thursday checked only some of the most important boxes. View More

Costco Wholesale reported solid quarterly results on Thursday, slightly beating analyst forecasts on the key lines. While we would have preferred to see stabilized renewal rates in its key region, the retailer's consistently strong sales momentum can't be ignored. Total revenue in its fiscal 2026 second quarter increased 9.2% year over year to $69.6 billion, topping Wall Street expectations of $69.12 billion, according to estimates compiled by LSEG. Adjusted earnings per share (EPS) in the 12 weeks ended Feb. 15 rose 13.9% from the year-ago period to $4.58, beating the consensus of $4.56, LSEG data showed. With the results being mostly in-line, the stock wasn't doing much in after-hours trading. Still, the start of 2026 has much kinder to Costco shareholders compared to the last six months of 2025, when shares registered their first back-to-back quarterly declines since 2022. For the year, the stock is up roughly 14%. COST 1Y mountain Costco's stock performance over the past 12 months. Bottom line So, can the stock keep its run going and reclaim its high from the middle of last year? That's the question we find ourselves asking Thursday night. On one hand, it's hard not to be impressed with the 6% to 7% comparable sales growth the wholesale retailer has consistently put up month after month, and now quarter after quarter. The solid growth in both traffic and ticket sales tells us that the company is gaining market share in the highly competitive retail landscape. However, the thorn in our sides has been membership renewal rates, which for many quarters now have drifted lower. This slow drip hasn't been an indictment on the value of a Costco membership, but rather a dynamic related to an influx of online sign-ups who probably don't see the full appeal of a membership because they don't go to the stores. The proof is in the comp sales growth. Still, Costco makes most of its money on membership fees, so if lower renewal rates create a slowdown in membership growth, it matters to how we view the stock. Declining renewals are why we trimmed this position late last year, though not at the best price. When we reviewed Thursday's results, we were met with both joy and disappointment. The worldwide renewal rate finally stabilized, but the U.S. and Canada saw yet another downtick and it sounded like this problem will be with us for a few more quarters. Although management has yet to fully solve the online renewal piece, it's clear that the technology investments being made in stores are improving the customer experience for warehouse shoppers. That keeps us encouraged about the long-term opportunity once the online dynamic is fully played out. On the earnings call, CEO Ron Vachris highlighted improving checkout speed and employee productivity through enhancements in mobile wallets, pharmacy pay ahead, and pre-scan technology, which enables an employee to start ringing up small-to-medium carts while shoppers are still in line. These improvements have allowed Costco to handle new levels of growth while maintain the same staffing levels. Vachris, who's now been in the top job for two years , also said the company is piloting automated pay stations that allow customers to quickly pay for their pre-scanned orders, with an average transaction time of just eight seconds. Early results from the program are improving traffic flow inside the warehouses, which can make walking into a busy location feel far less daunting. He also said the company is working with the leading artificial intelligence companies to ensure Costco items appear on their tools. Finally, it's always good to remember that Costco tends to see a boost in traffic when prices increase at the pump. Members are more likely to drive to a Costco to fill up their tanks, and while they are in the area, they walk into the warehouses. "Generally speaking, if gas prices start to increase, then we tend to see our value proposition resonates better with member," CFO Gary Millerchip explained. Add it all up, the balance of the strong comp momentum and stabilization in worldwide renewals — with perhaps some "under promising, over delivering" at this point in U.S. and Canada renewals — should be enough to keep us involved in the stock here. But we recognize that some of the defensive-oriented stocks that thrived at the start of this year might be taking a breather here, so we're keeping our hold-equivalent 2 rating on shares. However, we're also nudging up our price target back to $1,100 from $1,050. Commentary Total fiscal second-quarter comparable sales, an important metric for the retail industry, increased 7.4% on a reported basis and 6.7% on an adjusted basis, which strips out the effects of foreign exchange and gasoline prices. The comps were driven by a 3.1% increase in traffic and an increase in ticket size of 4.2% on a reported basis and 3.5% on an adjusted basis. The traffic growth reflects an acceleration from the 2.6% pickup in the prior quarter — always positive to see. Costco's digitally-enabled comparable sales were up 22.6%. By category, fresh food comps increased low double digits in the quarter, while non-food comps sales increased high single digits. Some of the top performing departments were gold and jewelry, tires, major appliances, health and beauty, and small electronics. For its private-label Kirkland Signature brand , Costco launched 30 new items in the quarter, including crispy wings and blackened salmon. Costco also reduced prices on Kirkland Signature products like butter, facial tissue, organic seaweed, and organic coconut water. Costco also shared its sales results for the February period, which ended March 1. Total company comparable sales increased 7.9%, or 7.0% when excluding gasoline prices and foreign exchange. The results included a 0.5% positive impact on total company sales from the later timing of the Lunar and Chinese New Years. Comparable traffic in February was up 3% worldwide, roughly the same as the reported quarter. There was a minor impact on traffic in Costco's northeast U.S. locations due to the winter storms, but there was no major impact to sales. Back to the quarter, gross margins continued their upward trajectory, increasing 17 basis points year over year to 11.02%, or 11 basis points excluding the impact of gas prices. Operating margins improved from last year, too. If we look into the different components of the gross margin change, core merchandise margin declined 3 basis points year over year, and 7 basis points when excluding changes in gas prices. Costco's ancillary and other businesses — like pharmacy, food courts, and travel — added 19 basis points of improvement on a reported basis, and 17 basis points excluding gas. The company's "last in, first out" (LIFO) accounting had a four-basis-point negative impact, and there was a 5 basis point benefit from a non-recurring legal settlement. Costco's paid memberships increased in the quarter, but its growth was once again well below the FactSet consensus. Total paid memberships increased about 4.7% year over year — slower than last quarter's 5.2% growth — to 82.1 million, missing the estimate of 82.7 million. The company was able to stop the membership renewal rate bleeding, but not everywhere. The worldwide membership renewal rate stabilized at 89.7%, but U.S. and Canada dipped to 92.1% from 92.2% in the prior quarter. Once again, new online members were the driver of the downtick in renewal rates. These customers renew at a slightly lower rate than people who sign up at warehouses. As a result, when online members grow as a percentage of Costco's total base, the overall churn is slightly higher. Management continues to use targeted communication and retention strategies to offset the membership drops. Millerchip said renewal rates are seeing some benefit from their retention programs, but acknowledged there will be a few more quarters of downticks before reaching a maturation point. Finally, Costco opened three new warehouses. It plans to open 18 more over the course of the fiscal year, which has two quarters remaining. The planned total of 28 is unchanged from what management said last quarter. (Jim Cramer's Charitable Trust is long COST. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

A recent Rhodium Group report found that structural factors outweigh the effects of state subsidies on the profit margins of Chinese electric vehicle companies. View More

In this articleBABYD9866-HKFollow your favorite stocksCREATE FREE ACCOUNT JINHUA, CHINA - JANUARY 13: Workers assemble new energy vehicles at an intelligent factory of electric vehicle enterprise Leapmotor on January 13, 2026 in Jinhua, Zhejiang Province of China. (Photo by VCG/VCG via Getty Images)Vcg | Visual China Group | Getty Images Politicians and auto industry leaders in the United States and Europe have long argued that state-sponsored subsidies for Chinese electric vehicle makers have distorted global competition.A new report from research firm Rhodium Group challenges that assessment, saying structural advantages — not subsidies — are a key factor giving Chinese EV manufacturers an edge over Western automakers.These structural efficiencies include vertical integration, larger production scale and lower overhead costs, which outweigh the effects of heavy state subsidies on the profit margins of Chinese electric vehicle manufacturers, according to Rhodium.Since 2009, Chinese authorities have disbursed more than $29 billion in tax breaks and subsidies to manufacturers of electric consumer vehicles, according to estimates from MIT Technology Review.These subsidies were "critically important in the early development of China's EVs," according to Bo Chen from the National University of Singapore, particularly for its nascent startups to gain access to much-needed funding."[Unlike] China, the U.S. capital market provides sufficient financial support to companies like Tesla," Chen, a senior research fellow at the university's East Asian Institute, said.China's dominance in the EV industry suggests that Beijing's approach has delivered results.These subsidies, along with an ethos of innovation and rapid development, have allowed Chinese EV manufacturers to pull ahead of legacy automakers from the West, Tu Le, founder of automotive consultancy Sino Auto Insights, said. Vertical integration over subsidies While Rhodium did not dispute the advantages conferred by China's state subsidies, the firm said that cost advantages gained from subsidies — which Western automakers operating in China also benefited from — "remain[ed] small compared to the structural cost advantages."According to the report, greater vertical integration, in which a company controls multiple stages of production, is the "single most important factor" allowing Chinese automakers to lower EV costs without significantly sacrificing profit margins.BYD, for example, produces nearly 80% of its core components in-house, more than double that of Tesla, according to Rhodium estimates, allowing the Chinese automaker to reap considerable savings in supplier markups on various components.This allows BYD to save around $2,369 in supplier markups per unit of its Seal sedan compared with Tesla's Model 3, according to the report.Consequently, BYD was able to eke out a 20% gross profit margin in 2025, compared with Tesla's 18%, even though the Model 3 sells for about 235,000 yuan ($33,943) in China, nearly triple the 79,800 yuan that BYD advertises for its base Seal model, Rhodium said. Vehicles manufactured in China benefit from structural efficiencies that are often underestimated... These embedded supply chain advantages play a substantial role in driving affordability, beyond the impact of direct state subsidiesChris LiuSenior analyst, Omdia However, Leon Cheng, head of the mobility practice at management consulting firm YCP, cautioned that vertical integration is not a uniform feature across China's auto industry."[Among] Chinese EV players, only a few, like BYD, [do] this," Cheng said. "You have a lot of legacy auto players — they don't really have this vertical integration."The report identified BYD and Leapmotor — an EV startup partially owned by Stellantis — as clear outliers in terms of vertical integration. Leapmotor produces roughly 60% of its components in-house and saves around $816 per model of its B01 sedan compared with Tesla's Model 3, according to Rhodium.Batteries, which account for one of the largest expenses in EV production, are produced in-house by BYD and Leapmotor, considerably reducing overhead production costs for both automakers, Cheng said.Cheng also cautioned against taking the Rhodium report's calculations at face value, as it is challenging to determine the exact cost advantages of Chinese manufacturers from profit-and-loss calculations alone.Chinese automakers have been known to rely on extended payment terms with suppliers, which allow them to delay cash outflows and maintain higher working capital levels, Cheng said.Those longer payment cycles can also make profit margins appear wider in the short term, he added.Other analysts echoed Cheng's view. "Vehicles manufactured in China benefit from structural efficiencies that are often underestimated. Longer supplier payment terms enhance working capital flexibility, while lower labor costs... reduce overall production expenses," Chris Liu, senior analyst from Omdia, said."These embedded supply chain advantages play a substantial role in driving affordability, beyond the impact of direct state subsidies," Liu added. Breaking with Western outsourcing While not applied universally by all Chinese manufacturers, vertical integration "is just more common [among] Chinese companies," Le from Sino Auto Insights said.According to Rhodium's report, many Western carmakers have "reduced vertical integration by outsourcing major components to specialized suppliers" over the past few decades.While this outsourcing push was driven by cost pressures and a "belief that suppliers could deliver greater efficiency and innovation at scale," the report found that concerns over higher unit costs from vertical integration "[do] not hold in practice." According to Rhodium, Western assumptions about cost efficiencies from outsourcing are challenged by the significantly lower construction and manufacturing costs in China. That allows companies such as BYD to keep production concentrated domestically and maintain a significant cost advantage.However, it would be challenging for Western automakers to revert to vertical integration without incurring marked costs.Outsourcing has created deep interdependence between legacy original equipment manufacturers and component suppliers, according to YCP's Cheng.Some expenses may not be purely financial, either. Bringing component production back in-house could also trigger mass layoffs among suppliers, Cheng said.— CNBC's Dylan Butts contributed to this report. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Gap has been on a steady upswing of growth but saw worse than expected results during its holiday quarter after historic winter storms led to store closures. View More

In this articleGAPFollow your favorite stocksCREATE FREE ACCOUNT Pedestrians in the snow at Times Square during a winter storm in New York, US, on Sunday, Feb. 22, 2026.Bloomberg | Bloomberg | Getty Images Historic winter storms and subsequent store closures weighed on Gap's performance during its holiday quarter and contributed to worse-than-expected results at its portfolio of brands, the retailer said Thursday. Cold weather, snow and ice throughout much of the U.S. in January led to about 800 temporary store closures at the storms' peak, contributing to a miss on comparable sales for Old Navy and mixed companywide results, the retailer said. "Old Navy and all the brands were actually trending better heading into that weather disruption," said finance chief Katrina O'Connell. "The good news is the trends recovered immediately after those storms passed." Across the business, which includes Old Navy, Banana Republic, Athleta and Gap's namesake banner, the retailer reported mixed fiscal fourth quarter results – missing expectations on the bottom line and meeting consensus on revenue. Here's how the retailer did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:Earnings per share: 45 cents vs. 46 cents expectedRevenue: $4.24 billion vs. $4.24 billion expectedGap's stock fell as much as 9% in extended trading Thursday.The company's reported net income for the three-month period that ended Jan. 31 was $171 million, or 45 cents per share, compared with $206 million, or 54 cents per share, a year earlier. During the quarter, Gap's gross margin was weighed down by tariffs and fell to 38.1%, slightly worse than analysts expected, according to StreetAccount. Sales rose to $4.24 billion, up about 2% compared to $4.15 billion a year earlier. Gap's guidance was largely in line with expectations, but failed to exceed consensus. For the current quarter, it's expecting revenue to rise between 1% and 2%, compared to expectations of 2%, according to LSEG. For the full year, the company is expecting sales to grow between 2% and 3%, in line with expectations of 2.5% growth, according to LSEG. Given a $313 million positive legal settlement Gap saw during the current quarter, it issued an adjusted full-year earnings per share outlook. The company said its expecting adjusted earnings per share to be between $2.20 and $2.35, compared to expectations of $2.32, according to LSEG. Gap did not factor recent changes to tariffs into its outlook because the company believes it's "premature to plan for a change" as the situation continues to evolve, said O'Connell. Given how much of a hit Gap took from President Donald Trump's global tariffs, which were struck down by the U.S. Supreme Court last month, Gap could issue stronger guidance in the coming quarter because the newly enacted 15% tariff is slightly below the previous rates for many countries."If the [current] Section 122 tariffs were to stay in place for the year or expire in July, it should lead to a more favorable outcome versus the outlook we provided today," said O'Connell. "If 15% were the rate that would stay in place for the balance of the year, that rate is slightly below the current IEEPA rates that are contemplated in our plans, so that could give us a modest benefit to operating income if that scenario were to play out." Gap's choppy results come just over two years into CEO Richard Dickson's turnaround plan and analysts begin to expect more from the apparel giant. Now that the company has improved profitability, returned to growth and amassed a staggering $3 billion cash pile, Dickson said he's ready to turn to the next phase of the plan, which is about "building momentum." "Our primary focus is going to be on growing our core apparel business, and we're going to do this through continuous improvement," said Dickson. "This has all been driven by disciplined execution, which we need to continue to do with better product, better marketing and better storytelling and that's not easy, but we're proving that that muscle is getting stronger and stronger now." In the meantime, Gap is also turning its sights on growth opportunities for the company, including its expansion into beauty and accessories and its fashion and entertainment platform through the recent appointment of a chief entertainment officer. He said the ventures will begin to really scale next year. Here's a closer look at how each brand performed:  Old Navy Gap's largest and most important brand saw sales rise 3% to $2.3 billion, with comparable sales also up 3%, well below analyst consensus of 4.3%, according to StreetAccount. Despite the miss, Gap said Old Navy's "price value equation is resonating with consumers" and it's continuing to win over shoppers across a wide range of income levels.  Gap The brightest spot of Gap's quarter came from its namesake banner, which saw sales rise 8% to $1.1 billion with comparable sales up 7%, far ahead of expectations of 4.6%, according to StreetAccount. Under Dickson, the brand has worked to regain its cultural relevance and is winning over a wide range of generations, including younger, Gen Z shoppers.  Banana Republic The safari-chic workwear brand posted its third straight quarter of positive comparable sales, which were up 4%, beating expectations of 2.5%. Sales rose 1% to $549 million, reflecting progress in both marketing and product assortment. "Men's just continues to build momentum. Key items like the traveler pant, our cashmere program, really fantastic outerwear that's been driving the performance, particularly in the quarter," said Dickson. "Women's performance is becoming much more consistent. We've had strength in denim skirts and sweaters and as we enter 2026, Banana is really starting to find its momentum." Athleta  The athleisure brand saw another quarter of sagging sales, with revenue down 11% to $354 million and comparable sales down 10%. In some ways, the drop reflects an overall sluggish athletic apparel market, but the company has also had a number of strategic missteps, including targeting the wrong customer and offering products that failed to land. Under the brand's new CEO, Dickson said Athleta has been working on revamping the assortment, bringing back customer favorites and dialing up innovation.  Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Broadcom's AI revenue forecast surpassed many bullish expectations from Wall Street analysts. View More

In this articleAVGOFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO2:0402:04Broadcom beats on earnings and guidance as AI revenue doublesMoney Movers Broadcom's stock surged nearly 5% on Thursday as CEO Hock Tan touted strong demand for the company's chips amid the artificial intelligence boom.He told analysts on Wednesday that he anticipates AI chip revenue in 2027 that's "significantly in excess of $100 billion" as demand mounts for designing custom silicon. That far surpassed many bullish estimates from Wall Street analysts, who now anticipate more potential upside after Tan said the company is nearing 10 gigawatts of capacity between six customers. Analysts at JPMorgan estimate that the company can reach between $12 billion and $15 billion in revenue per gigawatt by 2027 and lifted the firm's AI revenue estimates "conservatively" to $120 billion or more. The company's "leadership in AI networking and custom silicon enables the lowest inference cost for its hyperscaler customers, and we see it delivering ongoing cost reductions on pace with market leader Nvidia," wrote analysts at Goldman Sachs. The comments came alongside Broadcom's better-than-expected quarterly results, in which AI revenue more than doubled due to AI accelerator and networking demand. Read more CNBC tech news5 unresolved questions hanging over the Anthropic–Pentagon fracas: 'It's all very puzzling'Amazon's Bahrain data center targeted by Iran for support of U.S. military, state media saysBroadcom CEO Hock Tan sees AI chip revenue 'significantly' above $100 billion next yearDefense tech companies are dropping Claude after Pentagon's Anthropic blacklistNvidia CEO Huang says $30 billion OpenAI investment 'might be the last' Over the last few months, chipmakers have grappled with a shortage in high-bandwidth memory as AI demand snaps up supply. But Tan told analysts that the company has secured memory and leading-edge wafer supply through 2028.Tan managed to convince investors of Broadcom's sustainable growth trajectory, allaying fears about the company's profitability and questions about whether Broadcom shipping more racks packed with AI chips would weigh on margins. By comparison, leading AI chipmaker Nvidia's blowout report last month wasn't enough to convince investors. "We have gotten our yields, we've gotten our cost to the point where the model we have in AI will be fairly consistent with the models we have in the rest of the semiconductor business," Tan told analysts.More hyperscalers making their own chips has also sparked some fears that Broadcom could get cut out of the market. However, Tan said the difficulty of competing against a juggernaut like Nvidia should benefit the company over "many years to come."Large language model makers "cannot afford to have a chip that is just good enough," he said. "You need the best chips around because you're competing against other LLM players, and most of all, you're also competing against Nvidia, who is by no means letting their guard down."Broadcom's upbeat results benefited Credo and Amphenol on bets that customers are opting for copper connectivity — the chipmaker's core business segment — over optical technology to connect AI servers. Shares rallied 10% and 4%, respectively. Lumentum and Coherent, which make newer optical tech, fell over 4% each. — CNBC's Jordan Novet and Katie Tarasov contributed reporting Stock Chart IconStock chart iconBroadcom year-to-date stock chart. watch nowVIDEO2:4302:43Broadcom CEO: AI revenue from chips could exceed $100 billion in 2027Fast Money Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Creating a mortgage has been one of the most time-consuming corners of American finance, with lenders relying on dozens of steps that can take weeks. View More

In this articleAURCRKTFollow your favorite stocksCREATE FREE ACCOUNT Vishal Garg, Better.comSource: Better.com The online mortgage platform Better has partnered with OpenAI to launch an app within ChatGPT that the companies said will dramatically reduce the time it takes to underwrite a mortgage or home equity loan, CNBC has learned exclusively.The app, announced by the firm later Thursday, takes Better's mortgage engine and combines it with OpenAI's models to speed up the underwriting process for loan officers working at banks, mortgage brokers and fintech firms, Better CEO Vishal Garg said in an interview."Taking the mortgage underwriting process, which so many of us have experienced personally, from 21 days to as little as 47 seconds and enabling it via ChatGPT is a huge unlock for everyone," Giancarlo Lionetti, OpenAI's chief commercial officer, said in a statement provided to CNBC."OpenAI is proud to partner with Better to build technology that revolutionizes the mortgage industry and makes it cheaper, faster, and easier for American families to finance a home," he added. For decades, creating a mortgage has been one of the most time-consuming corners of American finance, with lenders relying on dozens of steps that can take weeks to complete. After the 2008 financial crisis, big banks like JPMorgan Chase receded from the U.S. mortgage market, leading to the rise of non-bank players including Rocket Mortgage and United Wholesale Mortgage.Better stock jumped as much as 5% on the news, while Rocket Mortgage shares fell as much as 6% and UWM shares dropped nearly 4%. Disruption risk? Now, in an era where the leading artificial intelligence firms are targeting inefficiencies across the corporate landscape, it's possible that AI agents could reshape a U.S. home-loan market that originates more than $1 trillion in mortgages a year.Garg said the new app is part of Better's pivot from being primarily a lender to consumers to also becoming a "mortgage-as-a-service" tech platform for other mortgage players.The companies are taking direct aim at the dominant mortgage players by enabling competitors to move faster, Garg said. According to Better, lenders can save 21 days of time on average, reducing the costs to underwrite loans and ultimately saving consumers money as well. "AI is now doing mortgages," Garg said. "Rocket, UWM, Pennymac, a bunch of guys that are large public companies, make their money by effectively charging a tax of one and half percent to underwrite mortgages. … That's $20 billion that's paid by the American public in a typical year."OpenAI's models, fed with Better's mortgage data, save time by simultaneously running parallel workflows on dozens of checkpoints, including appraisals, title reports, income, credit reports and other metrics, Garg said. "It's not a simple tool call. It's a multiple tool call with a super long, extended logic tree and a very large context window," Garg said. watch nowVIDEO5:1105:11Better.com CEO talks integrating AI into the housing market and mortgagesFast Money Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Economists surveyed by Dow Jones expect payroll growth of 50,000, following January's surprisingly high 130,000. View More

A "Now Hiring" sign is seen at an AutoZone on Feb. 11, 2026 in Hollywood, Florida. Joe Raedle | Getty Images The 2025 labor market has been generously described as "unstable," with virtually no jobs growth and a slew of headwinds expected to conspire against it. In 2026, though, the buzzword seems to be "stable," even though conditions seem to be largely the same.The picture continues to be of a low-hire, low-fire climate, where companies are both reticent to lay off employees as demand continues to be strong, but also are leery of adding staff amid uncertainty over tariffs, inflation and geopolitics.However, characterizations coming from Federal Reserve officials and market economists have grown at least a bit more optimistic — stressing the stability, if not the robustness, of the labor market.The difference between this year and last? Expectations.A prevailing belief is that with the clampdown on immigration and other factors holding back labor pool growth, a subdued hiring rate is fine — at least for now — and the current pace of job growth is adequate and even expected."We've actually been getting signs of the U.S. labor market showing some stability," Claudia Sahm, chief economist at New Century Advisors, said in a recent CNBC interview. Sahm, author of the oft-cited "Sahm Rule" that uses changes in the unemployment rate to forecast recessions, added that there's a need to "be very watchful" as "the fact that the hiring rate is so low does make us vulnerable.""We've actually got some good news as we came into the year in the labor market. But we do need to see the hiring rate pick up," she added. "That has been kind of a mystery, how low hiring is given the fact that the U.S. economy is expanding." watch nowVIDEO3:4603:46AI will leverage human capital, not displace it: MetLife’s Drew MatusMoney Movers More clues on where the employment picture is headed will come Friday when the Bureau of Labor Statistics releases its monthly nonfarm payrolls report for February at 8:30 a.m. ET.Economists surveyed by Dow Jones expect payroll growth of 50,000, following January's surprisingly high 130,000. The unemployment rate is expected to hold at 4.3%, another sign of that, yes, stable labor market that certainly isn't going gangbusters but is just strong enough to keep that jobless level steady. How stable? However, the so-called stability may not be all it appears.Most of the payroll gains in 2025 came from health-care-related industries. Without the sector, even the meager 15,000 monthly average gains last year would have evaporated, and this year's environment looks largely the same to those on the ground. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); "One of the things that is very interesting-slash-potentially problematic is that we have almost all the growth happening in this health care and social [assistance]" sectors, said Laura Ullrich, director of economic research at Indeed. "I don't really see it as balanced or stable if you're seeing so much growth in just one subsector."'For January, the two sectors accounted for practically all the gains, with health care contributing 82,000 jobs and social assistance adding 42,000. By contrast, construction lost 88,000 in 2025, despite President Donald Trump's tariffs aimed at stimulating the sector.Technology-related fields also have been under pressure with the accelerated adoption of artificial intelligence. Block co-founder and CEO Jack Dorsey rattled the labor market last week when announcing the firm would be slashing about 40% of its payroll in response to AI.For February specifically, the BLS report could be pressured by a since-resolved strike at Kaiser Permanente, a development that could hit the health-care numbers as it impacted 31,000 workers in California and Hawaii. Though the impasse ended Feb. 23, the strike occurred during the survey week the BLS uses to compute the report.Bank of America is forecasting a below-consensus gain of 35,000 in payrolls because of the strike, though the firm said the unemployment rate may not be impacted. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Investors should ignore even big market drops: The S&P 500 fell by 1% or more on 1,001 days since 1996, an analysis by Morningstar Direct found. View More

In this articleFollow your favorite stocksCREATE FREE ACCOUNT Peter Lourenco | Moment | Getty Images Stocks are wobbling amid a U.S. war with Iran, and investors may feel anxious.But volatility is a common feature of the stock market. Indeed, drops of 1%, 2% or more in a given day — though they may feel nauseating at the time — happen more often than you may think. The S&P 500 U.S. stock index, for example, has fallen 1% or more on 1,001 days over the past 30 years — or, about 33 days per year, on average, according to a Morningstar Direct analysis of market data since 1996. Over the same period, the index slipped at least 2% on 313 days, according to Morningstar. That's an average of about 10 days per year."That's almost once a month," Charlie Fitzgerald III, a certified financial planner based in Orlando, said of the data."These little blips happen quite often," said Fitzgerald, who is a founding member of Moisand Fitzgerald Tamayo, which ranked No. 69 on CNBC's 2025 Financial Advisor 100. "It's what stock markets do, and it's what they've done for 100 years," he said. window.addEventListener("message",function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r,i=0;r=e[i];i++)if(r.contentWindow===a.source){var d=a.data["datawrapper-height"][t]+"px";r.style.height=d}}}); Investors saw such a drop earlier this week as they digested the prospect of a broadening conflict in the Middle East, and what it could mean for oil prices and the broader U.S. and global economies. For example, the S&P 500 closed 1% lower on Tuesday, and at one point in the day, it was down around 2%."This is kind of a classic geopolitical shock," Fitzgerald said. The financial markets tend to take a "shoot first and ask questions later" mentality when extrapolating from headlines about such conflicts, Scott Wren, senior global market strategist at Wells Fargo Investment Institute, said Wednesday in a market commentary."We believe investors need to try and keep a clear head, look through the headlines, and stick to a well thought out plan," Wren wrote. "A diversified portfolio is one key to that plan." Single days matter less than long-term trend On a single day at the start of the Covid pandemic — on March 16, 2020 — the S&P 500 sank about 12%. Stocks declined roughly 34% between Feb. 19, 2020, and the market bottom on March 23. However, stocks rebounded with vigor and were back to their old highs by August — the fastest recovery of its kind in history. More recently, after President Donald Trump announced so-called "liberation day" tariffs, the S&P 500 index fell nearly 5% on April 3, 2025 — its worst day since June 2020. The market shed about 12% between April 2 and 8, but had fully recovered by early May, just a month later. Since 1996, there have been 21 days in which the S&P 500 plunged 5% or more, Morningstar found — amounting to a daily decrease of that size every year and a half or so, on average. Read more CNBC personal finance coverageS&P 500 shrugs off 1% daily drops all the time. Investors can too, advisors sayWhere investors can look for stability as the Iran war rattles marketsWhat the Iran war market turmoil means for those nearing retirementMusk says Grok can help with your taxes. What experts say about AI and tax prepNew bill would update anti-poverty program, 'a critical lifeline': WarrenThere's a push to cut capital gains taxes on home sales to add supply for buyersIran war and your portfolio: Historical stock market patterns investors should knowTrump says '401(k)s are way up' — but workers are tapping them at record ratesAI, layoffs spur workers to want a career change, survey finds — but few may do itPoor coordination can cost couples an average $14,000 in retirement wealthGold price jumps on Middle East turmoil. What to know before investingWhat student loan borrowers need to know about judge's ruling on SAVE planAs Iran strikes disrupt flights, why travel insurance may fall shortHow the U.S.-Iran war could impact gas prices at the pumpMore low- and middle-income Americans are investing, report finds. Here's whyCNBC's Financial Advisor 100: Best financial advisors, top firms ranked Despite the frequency of steep drops for stocks, the S&P 500 has risen 0.03% a day on average over the last 30 years, resulting in a typical annual return of more than 10%, according to Morningstar. As a result, a $10,000 investment in the S&P 500 at the start of 1996 would be worth around $192,000, as of Wednesday, Morningstar found. "Short-term shocks are difficult to predict and frequently followed by recoveries," said Amy Arnott, a portfolio strategist at Morningstar. "Investors are better served by focusing on a sound, long-term asset allocation and staying disciplined rather than getting distracted by external events," Arnott said. Big drops can be a good time to rebalance When the market sustains a relatively big decline over a short period, of perhaps 5% to 10% or even more, investors may be able to take advantage by rebalancing, Fitzgerald said. For example, if your target ratio of stocks to bonds is 65% stocks and 35% bonds, that ratio may fall to 50% stocks and 50% bonds if stocks decline precipitously in value, he said. Investors can sell some bonds and use the proceeds to buy stocks and to get back to their target ratio, Fitzgerald said. That behavior forces investors to buy stocks when prices are lower, he said. Then, they can rebalance the other way when stocks recover, he said. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Frustrated sellers who pulled homes off the market last fall are now relisting them at a quick pace, thanks to lower mortgage rates, but supply is still low. View More

A "For Sale" sign outside a house in the Capitol Hill neighborhood of Washington, DC, US, on Tuesday, Aug. 12, 2025.Al Drago | Bloomberg | Getty Images The all-important spring housing market is off and running, and while the pace isn't expected to be strong, there are signs of optimism, at least among sellers. Some who gave up last year are jumping back in. Nearly 45,000 homes that were delisted last year were relisted for sale in January, according to Redfin, a real estate brokerage. That is the highest January figure since Redfin began tracking this metric a decade ago and represents a record 3.6% of homes that were on the market in January.The January figures come as Redfin reported a record number of sellers pulling their homes off the market last September. Close to 85,000 sellers delisted, up 28% from September 2024. Higher mortgage rates last year, still-high home prices and growing uncertainty in the economy sidelined buyers last fall, taking sellers out of the driver's seat, where they had been in the years during and just after the pandemic. Get Property Play directly to your inboxCNBC's Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox.Subscribe here to get access today. Ashley Rummage, a real estate agent in Raleigh, North Carolina, in response to CNBC's fourth-quarter Housing Market Survey, said in December that more sellers were being asked for concessions, and some just refused."A lot of sellers I've encountered and worked with have just thrown their hands up in the air and said, 'If we can't get what we want for our house right now, or what we think is it's worth, then we're gonna go ahead and take it off to market and try again, maybe in the spring,'" Rummage said.The overall inventory of homes for sale nationally is higher than it was a year ago, but the gains are plateauing, according to Realtor.com. Active listings were up 7.9% in February, year over year, but that number has been shrinking for nine straight months. Listings are still down 17% from 2019, pre-pandemic."Inventory has improved for more than two years, but the momentum has faltered in recent months," said Danielle Hale, chief economist, Realtor.com. "Supply gains have been concentrated in the South and West and skewed toward homes priced below $500,000. While the Northeast and Midwest have seen growth, they remain significantly undersupplied."With rates now hovering near four-year lows, Hale said, a key question is whether this "thaw" spurs more buyers or more sellers. Mortgage rates have climbed slightly higher in recent days, due to the ongoing war with Iran and renewed fears over inflation. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Shares of Corning and other optical companies are sliding Thursday. View More

Shares of optics maker Corning are tumbling Thursday, likely in response to comments from well-respected Broadcom CEO Hock Tan on the chipmaker's earnings call the prior evening. But the market reaction seems like a clear-cut overreaction based on Corning's own guidance and industry outlook. A key pillar of our investment thesis in Corning is the growing use of fiber-optics technology in the data center, ultimately replacing copper as a means to transmit data. On Wednesday night, Tan weighed in on this transition and his commitment to copper in a specific use case appears to what's driving the decline in fellow Club name Corning. Before digging into Tan's comments, let's first define some key terms used when discussing the construction of data centers and, in particular, networking together all the various parts to deliver fast, reliable AI computing. These terms are "scale-up" and "scale-out." Scale-up refers to the connections within a single server rack — essentially those filing-cabinet looking structures containing a bunch of computing components. With scale-up, we're talking about connecting various chips together so they operate as one giant chip. Because this is about connections within a single rack, the distance between connections are very short. Scale-out, on the other hand, refers to the connections made between racks throughout the data center. There are rows upon rows of server racks in AI data centers. With scale-out, we're talking much larger distances between end points. That means the data has more ground to cover. Now, back to the Broadcom call . When discussing Broadcom's networking roadmap during his prepared remarks, Tan said Broadcom's customers would likely continue to "stay on direct-attached copper" until at least 2028. Then, during the question-and-answer portion of the call, Tan was asked to elaborate on that copper comment. In response, Tan said he was referring only to scale-up solutions on the 2028 timeline. He noted that for scale-out technology, Broadcom is already working with optics because we're passed the point at which it makes sense to use copper. Generally speaking, optical technology is considered superior to copper for sending data over longer distances, in large part because the signal doesn't degrade at high speeds. For connecting chips to one another in scale-up, though, Tan argued "the best way to do that is to use direct-attached copper. That's the lowest latency, lowest power, and lowest cost. So, you want to keep doing that, especially in scale-up as long as possible. In scaling out, we're past that. We use optical." To be clear, Tan did indicate that scale-up will eventually need to move to an optics-based solution. His argument is that we're just not there yet and likely won't be for a few years — the argument being, it's best to push copper to its limits before taking on the added complexity of moving to optics. Now, this might seem like a negative development and a dent to the optimism around Corning's transformation into a key cog in the massive AI buildout. However, when you actually dig deeper, Tan's outlook is not at all counter to what Corning executives have said. GLW .SPX YTD mountain Corning's year-to-date stock performance versus the S & P 500. Let's take a look at what Corning CEO Wendell Weeks said on the company's 2025 fourth-quarter earnings call in late January. Alongside its quarterly numbers, Corning increased its growth targets associated with its Springboard initiative, a multi-year plan to drive higher sales. It came just one day after Corning announced a blockbuster $6 billion agreement to supply Meta Platforms with fiber-optic cables for scale-out usage in the Instagram parent's data centers. When discussing the Springboard plan, Weeks said it doesn't assume any significant revenue contribution from the scale-up use of optics — if that materialized, it would be pure upside to what Corning has already projected. Notably, the Springboard plan currently covers through 2028, which is the same timeline as Tan's copper comments. Nevertheless, Weeks went on to add: "I believe that's inevitable. Calling timing is more difficult. There are scenarios where the timing would be within the time period between now and 2028. There are scenarios where it will be primarily starting maybe late 2028 and beyond. What we seek to do with Springboard is to not over-speculate. And if we don't have really quite compelling evidence of the timing of something as significant and large as the scale-up opportunity, we will tend to view the timeline from a conservative point of view." More recently, speaking at the Morgan Stanley's influential technology and media conference this week, Corning CFO Edward Schlesinger reaffirmed what Weeks said: "I don't think we're going to see scale up probably for a couple of years. I mean, our view is it sort of inflects up in 2028 maybe, and then it sort of continues to grow through the end of the decade. But you mentioned CPO, and I think CPO is actually going to be in scale out and scale up. And I think there's an opportunity to start to see some scale out CPO connectivity happen maybe next year, maybe a little earlier than 2028. What we're primarily signing up contracts for is the scale out part of the network." Bottom line We understand there are some investors and traders who view Tan's copper comments as bearish for the Corning story and growing adoption of optical technology in data centers more broadly. However, that looks to be the wrong interpretation. Both companies appear to be in perfect alignment on the use of optics for scale-out and the timing on when optics may play a larger role in scale-up connections. By the way, fellow Club name Nvidia announced a couple strategic partnerships in the data-center optics space this week with Lumentum and Coherent — another proof point, in our minds, that optics will play a larger role down the road. And yet, shares of both Lumentum and Coherent are being punished in Thursday's session, too. If anything, Thursday's sell-off in Corning demonstrates the importance of booking profits in stocks that have gone on parabolic moves — just like we've seen with Corning this year, which entered Thursday's session up roughly 65% year to date. When stocks catch fire, some of your fellow shareholders may latch onto anything that can be twisted into a negative — even if it's not really news — and use it as a reason to sell. (Jim Cramer's Charitable Trust is long AVGO, GLW and NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Buffett remains chairman of the sprawling, Omaha, Nebraska-based conglomerate and continues to regularly come into the office, Abel said. View More

watch nowVIDEO6:2406:24Berkshire CEO Greg Abel on succeeding Warren Buffett: I still check in with him nearly every daySquawk Box Berkshire Hathaway CEO Greg Abel said he still speaks with Warren Buffett nearly every day, underscoring the continued presence of the legendary investor at the sprawling conglomerate, even after handing over the top job at the start of the year.Buffett, who stepped down as CEO after more than six decades at the helm, remains chairman of the Omaha, Nebraska-based company and continues to come into the office regularly, Abel said."He's in the office every day, so we're talking every day if I'm in Omaha, we're always connecting," Abel said Thursday on CNBC's "Squawk Box." "If I'm traveling, like I was yesterday, I often check in just to catch up on what he's seeing, what he's hearing, what am I feeling. So if it's not every day, it's every couple days."Abel also acknowledged the challenge of stepping into Buffett's role as Berkshire's chief communicator to shareholders, particularly when writing his first annual letter to investors."The shoes to fill are tough on all fronts, but Warren is an exceptional communicator," Abel said. "It was not easy. I've told Warren, 'listen, the responsibilities transferred are great, but as far as the work and the task I had to do, that was the toughest.'"Abel used the letter to shareholders to outline a clear framework of foundational values centered on financial strength and disciplined investing, vowing to preserve the blueprint Buffett carefully orchestrated since the 1960s.Buffett offered little comfort, Abel added with a laugh. "When we were discussing it, he said, 'the second letter doesn't get any easier.'"On investing, Abel said Berkshire is unlikely to move into cryptocurrencies, echoing Buffett's long-standing skepticism of the asset class."I don't think you'll see crypto ... I just don't see it," Abel said.He left the door open to investments tied to technology, however. "What I do see is that when it comes to technology, even from an operational perspective, where we're seeing how we use it, the impact it's having, it does allow us to develop strong views and a better knowledge base around certain companies that are technology companies, or how we're using the technology. So technology will always be on the table," Abel said. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.