If the Federal Reserve is starting to set the table for interest rate reductions, some parts of the market are getting impatient for dinner to be served.

“What is it they’re looking for?” Claudia Sahm, chief economist at New Century Advisors, said on CNBC just after the Fed concluded its meeting Wednesday. “The bar is getting set pretty high and that really doesn’t make a lot of sense. The Fed needs to start that process back gradually to normal, which means gradually reducing interest rates.”

Known for formulating the Sahm Rule that uses changes in the inflation rate to gauge when recessions occur, Sahm has been clamoring for the central bank to start easing monetary policy so it doesn’t drag the economy into recession. The rule states that when the three-month average of the unemployment rate is half a percentage point above its 12-month low, the economy is in recession.

The 4.1% jobless level is only a short distance from triggering the rule, and Sahm said the Fed’s insistence on holding short-term interest rates at their highest level in 23 years is endangering the economy.

“We don’t need a weak economy to get that last little bit out of inflation,” she said. “We do not have to be afraid of a good economy. If the inflation job is done, or we’re on that glide path, it’s OK, the Fed can start stepping aside.”

Asked about the Sahm Rule during his post-meeting news conference, Fed Chair Jerome Powell called it a “statistical regularity” that doesn’t necessarily hold true this time around as the jobs picture remains strong and the pace of wage gains decelerates.

“What it looks like is a normalizing labor market, job creation and a pretty decent level of wages going up at a strong level but coming down gradually,” he said. “If it turns out to … show something more than that, then we’re well positioned to respond.”

Markets, though, are pricing in an aggressive path for rate cuts starting in September with a quarter percentage point reduction, which would be the first since the early days of the Covid crisis.

After that, markets expect cuts in November and December, with an about 11% probability assigned to the equivalent of a full percentage point lopped off the fed funds rate by year-end, according to the CME Group’s FedWatch gauge of 30-day fed funds futures contracts.

Instead of starting to take its foot off the brake, the Fed on Wednesday said it is keeping its overnight borrowing rate in a range between 5.25%-5.50%. The post-meeting statement did note progress made on inflation, but also reiterated that policymakers on the rate-setting Federal Open Market Committee need “greater confidence” that inflation is heading back to 2% before they will be ready to lower rates.

DoubleLine CEO Jeffrey Gundlach also thinks the Fed is risking recession by holding a hard line on rates.

“That’s exactly what I think because I’ve been at this game for over 40 years, and it seems to happen every single time,” Gundlach said, speaking to CNBC’s Scott Wapner on “Closing Bell” on Wednesday. “All the other underlying aspects of employment data are not improving. They’re deteriorating. And so once it starts to get to that upper level, where they have to start cutting rates, it is going to be more than they think.”

In fact, he thinks the Fed could end up slashing rates by 1.5 percentage points over the next year, a pace that’s more aggressive than the policymakers charted when they last updated the “dot plot” of individual projections.

Gundlach figures that the consumer price index will be below 3% soon, making real rates, or the difference with the fed funds rate, particularly high.

“If you have a positive real interest rate that’s even one and a half percent, that would suggest you have 150 basis points of room to cut rates without even thinking that you’re being excessive about it,” he said. “I think they should have cut today, quite frankly.”

WOODLAND PARK, N.J. — Kohl’s is thinking small to rev up its sales.

The retailer is opening Babies R Us shops in its existing stores across the country starting this week, and plans to have 200 by the end of September. The shops will carry a variety of baby merchandise that the company hasn’t offered before, including shampoo, strollers and car seats. Kohl’s previously sold only baby clothing.

With the move, the Wisconsin-based retailer aims to cater more to young families, whether they’re decorating their homes, getting ready for back-to-school or preparing for a new addition. Most of the retailer’s approximately 1,170 stores are in strip malls in the suburbs, a short drive for busy parents who are running errands or shopping for groceries.

Along with the baby category, Kohl’s is also bulking up its assortment of home decor, gifting and impulse items. CEO Tom Kingsbury estimated in late May that those expanded categories, including Babies R Us, are “a $2 billion-plus sales opportunity” in the coming years.

Yet U.S. demographics aren’t tipped in Kohl’s favor. Births in the U.S. totaled 3.59 million last year, according to provisional data from the U.S. National Center for Health Statistics. That’s the lowest number of births in more than 40 years.

On a store tour in New Jersey on Wednesday, Chief Merchandising Officer Nick Jones showed off the first Babies R Us shop. Customers who walk through the location can see and feel many pricier items, such as strollers, cribs, and high chairs, outside of the cardboard box. The shops include many prominent baby brands, including Hatch, Frida, Graco and Baby Bjorn.

Over the past few weeks, online shoppers have also seen Babies R Us on Kohl’s website. Its website has twice as much merchandise as the approximately 800 to 1,000 items available in most shops, the company said. Kohl’s will also launch a baby registry in the fall.

Each shop will range in size, but will be set up next to the baby and kid’s clothing that’s currently in all stores. Jones said more merchandise is on the way for expecting families, too, including baby apparel from Nike. It is introducing maternity clothing from Motherhood, a direct-to-consumer brand, which will be exclusive to Kohl’s stores.

The retailer is rolling out Babies R Us shops at a time when it needs growth drivers. Kohl’s net sales totaled $16.6 billion in the most recent fiscal year, which ended in early February. That’s a nearly 14% drop from five years ago.

Kohl’s expects current full-year net sales to decline between 2% and 4%. It posted a surprise net loss of $27 million for the fiscal first quarter and lowered its full-year forecast in late May.

Kohl’s shares are down 24% this year, trailing the S&P 500′s nearly 16% gains during the same period.

Like other retailers, Kohl’s has contended with shoppers who are putting off discretionary purchases while spending more on everyday expenses like groceries and housing. Yet Kohl’s challenges go beyond that, according to Dana Telsey, CEO and chief research officer of Telsey Advisory Group. She said it needs to sharpen its merchandise to grab the attention of new and existing customers.

“There’s been so much competition from others out there,” she said. “A brand has to stand for something and matter.”

Inside of Kohl’s Babies R Us shops, customers can touch and feel some of the pricier items that may be on their shopping list or registry.

Kohl’s is betting on the baby category as innovative products and higher-end items like fancy strollers drive spending.

Baby gear sales totaled $7.5 billion for the 12-month period that ended in May, up 4% from the same time period in 2020, according to Circana, a market research firm that tracks the space. It includes a wide range of items like car seats, strollers, bottles, bassinets, high chairs, cribs and breast feeding systems.

Stephen Hinz, an industry advisor at Circana who tracks sales of baby products, said customers’ willingness to pay for premium baby gear has fueled spending.

He noted the U.S. Census Bureau has found that the median age of U.S. women giving birth is 30 years old.

“People are in a much different life stage at that point,” he said. “They’re older. They’re more established in their careers. They’re more likely to own a home. They have more disposable income. And those have greater influence on the things that they might choose to bring into those homes.”

Hinz said the market has remained stable, despite the lower birth rate, as parents spring for fancier items like natural wood cribs and car seats that rotate to make it easier to get a baby in and out. And families will stretch their budgets to support a child’s health and safety even during tougher economic times, he said.

Plus, new parents have more retailers and brands to choose from and new ways of registering for baby items. Big-box chains Target and Walmart have expanded their baby departments. Macy’s launched its own baby registry in late April. And universal registries, such as Zola and Babylist, have gained popularity by allowing customers to choose items across retailers’ and brands’ websites.

In an interview with CNBC in March, Kingsbury said there’s market share up for grabs in the category. He referred to the bankruptcy and store closures of Bed Bath and Beyond, the parent of Buy Buy Baby.

And, he said, customers who shop at Babies R Us will also buy items in other departments.

Kohl’s is making a similar move to what it’s done with Sephora beauty shops, which it is opening in all of its stores. On earnings calls, Kohl’s leaders have said the shops are drawing younger and more diverse customers.

Jones said Kohl’s will decide whether to open Babies R Us in more stores after learning from the first 200 shops.

Kohl’s will put Babies R Us shops next to its existing baby apparel. It is also adding related merchandise, such as baby clothing from Nike and maternity clothes from Motherhood.

As it relaunches Babies R Us, Kohl’s will test whether the brand has remained relevant or grown stale.

The brands of Babies R Us and its former parent Toys R Us are now owned by WHP Global, a New York City-based brand management company. The firm has bought and tried to rebuild other brands including Bonobos, Rag & Bone and Isaac Mizrahi. Toys R Us shuttered its stores after filing for bankruptcy in 2017.

Kohl’s and WHP Global, which announced the deal in March, have not disclosed the financial terms of the agreement.

Along with the Kohl’s deal, WHP Holdings also struck an agreement with Macy’s, which has opened Toys R Us shops in many of its department stores.

Kohl’s move is risky since tastes have changed since the brand’s heyday in the ’80s and ’90s, said Natalie Gordon, founder and CEO of Babylist.

She said many retailers have fallen short on their customer experience with little chance to test products hands-on. And she recalled her frustrations with retailers when she got ready to have her first child about 13 years ago, which sparked the idea for Babylist.

“I felt infantilized by the brands that were out there,” she said. “Things were pink and blue with little cartoon characters. And I’m a woman having a baby. It really didn’t resonate at all.”

The latest version of Babies R Us at Kohl’s features the familiar brand font, but Kohl’s and WHP gave the brand a more contemporary look, said Christie Raymond, Kohl’s chief marketing officer.

“There’s a lot of credibility,” she said. “But we did need to modernize.”

The shops are decorated with sleek baby photos rather than pastels or cartoon mascots, such as Toys R Us’ Geoffrey the giraffe.

And Kohl’s will use a marketing tool that didn’t exist during Babies R Us’ peak: it plans to partner with influencers who can spread the word about the shops on Instagram and TikTok.

Call Don Draper, Venu Sports may have a marketing problem

The Disney, Fox and Warner Bros. Discovery jointly-owned streaming service said Thursday it will launch this fall at $42.99 per month. That’s much more expensive than Netflix, Max, Peacock or any other major subscription streaming service. It’s a lot less than the $73-per-month YouTube TV or a standard cable bundle — but those offerings include a wide variety of entertainment content beyond sports.

Venu will give consumers access to a bundle of networks: ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, Fox, FS1, FS2, BTN, TNT, TBS, and truTV. Subscribers will also get ESPN+. The plan is to debut in time for the football season. It doesn’t include CBS and NBC, two networks that have the rights to many sports, including college football and NFL games.

Venu’s theoretical user is someone willing to pay a hefty monthly subscription for a narrow segment of media — live sports, but not all live sports. The service is marketing itself as a product for so-called “cord nevers” — a set of younger consumers who haven’t wanted to pay for cable because it’s too expensive but have been yearning for access to ESPN and other live sports.

It’s entirely unclear this user base will materialize.

There are two major obstacles for Venu to succeed. First, the total addressable market of users who are OK with paying $43 per month for some sports but not OK with paying for cable may not be that high. Many non-cable subscribers are content to watch highlights on YouTube and their favorite influencers for commentary. According to a survey by Kantar, cited by YouTube at its 2024 upfront, 54% of people would rather watch creators break down a major live event than actually watch the event.

On the other end of the spectrum, NFL-crazed younger people will have to buy Peacock and Paramount+ — the streaming services attached to NBC and CBS — to get a full slate of NFL games. They could also get a digital antenna to pair with Venu, but antenna uptake among younger viewers may be a tad oxymoronic.

Other major sporting events — such as the ongoing Olympics — simply won’t be available on Venu, because Olympic broadcaster Comcast’s NBCUniversal isn’t a part of the service.

The second problem is potentially bigger: A product like Venu already exists — and it may already be a better deal than Venu.

For $60 per month, Echostar’s Sling TV offers the popular networks that come with Venu — ESPN, TNT, TBS, Fox and ABC — but it also includes NBC. Moreover, it also comes with CNN, Fox News, MSNBC, Bravo, USA, HLN, Discovery NFL Network, and a slew of other networks — 46 in all, to Venu’s 14. Plus, it comes with an introductory offer where consumers can pay just $30 for the first month.

As of the end of March, Sling TV had 1.92 million subscribers, and it’s not growing. It lost 135,000 customers in the first quarter, which was actually a narrower loss than the 234,000 subscribers it lost in the first quarter a year ago.

At the end of 2021, Sling TV had 2.5 million customers, down from the 2.7 million subscribers it topped out at in 2019.

The company blamed the existence of other streaming services for its decline last quarter.

“We continue to experience increased competition, including competition from other subscription video-on-demand and live-linear OTT service providers, many of which are providers of our content and offer football and other seasonal sports programming direct to subscribers on an a la carte basis,” Echostar said in a filing.

To sum up, Sling TV — a more robust offering than Venu for about $17 more per month — has been losing subscribers for five years and never got more than 2.7 million as its peak.

That’s quite the marketing challenge for Venu, which will need to convince consumers that it’s worth signing up for on the strength of branding and technology.

Or, it will hope that its $43 per month offer lasts long enough that it can take advantage of the $17 delta. The typical pattern for bundles of live networks is they start with an introductory offer only to raise prices. Venu hinted at this in its press release, telling consumers they could lock in the $43 per-month price for 12 months from time of sign-up — suggesting a price increase may be coming.

Venu wants to add more sports to the serve in time, but that will likely cause the price to increase, making the value proposition an even tougher sell for cord-nevers.

Further undercutting Venu, Disney is already planning an ESPN Flagship streaming service in the fall of 2025, which will include ESPN for a lower price than Venu.

Disney, Warner Bros. Discovery and Fox will argue that it’s going for maximum coverage here — kind of like the Apple iPad mini did in slotting into the tech company’s existing product line-up between its phones and larger tablets. Maybe there’s an audience for Venu, and if there is, the companies want to serve it. Fox CEO Lachlan Murdoch has already predicted the service can get 5 million subscribers in the next five years.

But even 5 million seems ambitious given Sling TV’s struggles. Getting there will require a lot of money spent on marketing.

And that effort may be so costly that it defeats the purpose.

Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032. NBC Sports broadcasts NFL games.

Global semiconductor stocks fell Friday after a lackluster set of results from U.S. chip firm Intel sent its shares cratering, and a global market sell-off weighed on some of the biggest names in the tech sector.

Intel shares fell 28% in morning trading on Friday, after the company reported a big miss on earnings in the June quarter and said it would lay off more than 15% of its employees as part of a $10 billion cost-reduction plan.

A number of major U.S. chip names also dropped on Friday in U.S. premarket trade, with Nvidia trading around 4% lower. Adding pressure to the stock is a report from The Information that Nvidia is the subject of a U.S. Department of Justice antitrust investigation.

The DOJ is looking at complaints that the chip giant allegedly abused its market dominance in artificial intelligence chips, The Information reported.

In response, a spokesperson for Nvidia said that the company “wins on merit.”

“We compete based on decades of investment and innovation, scrupulously adhering to all laws, making NVIDIA openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them,” the spokesperson said.

The spokesperson added that Nvidia is “happy to provide any information regulators need.”

CNBC has also reached out to the DOJ on the report.

In Asia, Taiwan Semiconductor Manufacturing Co. — known as TSMC — closed 4.6% lower in Taiwan, and Samsung was down more than 4% at the end of the session in South Korea. TSMC is the world’s biggest manufacturer of chips, while Samsung is the largest memory semiconductor firm globally.

Samsung rival SK Hynix, which supplies U.S. giant Nvidia, also fell sharply to close more than 10% lower.

The sell-off continued in Europe. Shares of ASML, which sells key tools required to make cutting-edge chips, were more than 8% lower by midafternoon in the Netherlands. ASMI, which also trades in the Netherlands, was off by 9%. STMicroelectronics and Infineon were both down.

Intel’s results add to the mixed picture across the semiconductor sector, where companies like AMD and Nvidia continue to prosper from the boom in artificial intelligence. Other players, like Qualcomm and Arm, are not yet reaping the benefits of the technology in their financial results.

Adding to the pressure on chip stocks is a global equity sell-off that began in the U.S. and has fed its way through to Asia and Europe. This especially weighed on the tech-heavy Nasdaq and on chip stocks.

The VanEck Semiconductor ETF, which includes major names in the sector, closed roughly 6.5% lower in the U.S. on Thursday.

LOS ANGELES — A federal judge has overturned a jury’s $4.7 billion verdict in the class-action lawsuit filed by “Sunday Ticket” subscribers against the NFL and has granted judgment to the NFL.

U.S. District Judge Philip Gutierrez ruled Thursday that the testimony of two witnesses for the subscribers had flawed methodologies and should have been excluded.

“Without the testimonies of Dr. [Daniel] Rascher and Dr. [John] Zona, no reasonable jury could have found class-wide injury or damages,” Gutierrez wrote at the end of his 16-page ruling.

The jury on June 27 awarded $4.7 billion in damages to residential and commercial subscribers after it ruled the NFL violated antitrust laws in distributing out-of-market Sunday afternoon games on a premium subscription service.

The lawsuit covered 2.4 million residential subscribers and 48,000 businesses in the United States who paid for the package on DirecTV of out-of-market games from the 2011 through 2022 seasons.

The jury of five men and three women found the NFL liable for $4,610,331,671.74 in damages to the residential class (home subscribers) and $96,928,272.90 in damages to the commercial class (business subscribers).

Since damages can be tripled under federal antitrust laws, the NFL could have been liable for $14,121,779,833.92.

It is not the first time the NFL has won a judgment as matter of law in this case, which has been going on since 2015.

In 2017, U.S. District Judge Beverly Reid O’Connell dismissed the lawsuit and ruled for the NFL because she said “Sunday Ticket” did not reduce output of NFL games and that even though DirecTV might have charged inflated prices, that did not “on its own, constitute harm to competition” because it had to negotiate with the NFL to carry the package.

Two years later, the 9th Circuit Court of Appeals reinstated the case.

It is likely the plaintiffs will again appeal to the 9th Circuit.

Stocks sold off Thursday, with the Dow Jones Industrial Average tumbling nearly 500 points, as investors’ fears over a recession surfaced.

The Dow dropped 494 points, or 1.2%. The S&P 500 shed 1.4%, while the Nasdaq Composite slipped 2.3%. The Russell 2000 index, the small-cap benchmark that has rallied lately, dropped 3%.

Some fresh data raised the specter of an economic contraction and the notion that the Federal Reserve could be too late to start cutting interest rates.

Initial jobless claims rose the most since August 2023. And the ISM manufacturing index, a barometer of factory activity in the U.S., came in at 46.8%, worse than expected and a signal of economic contraction.

The 10-year Treasury yield broke below 4% for the first time since February in a sign that more investors were seeking safe-haven assets.

That weak data comes a day after the Fed chose to keep rates at the highest levels in two decades.

While Fed Chair Jerome Powell did give some investors hope by signaling a September rate cut was on the table, it was not enough for market participants Thursday.

“The economic data keep rolling on in the direction of a downturn, if not recession, this morning,” said Chris Rupkey, chief economist at FWDBONDS, a financial market research company. “The stock market doesn’t know whether to laugh or cry because while three Fed rate cuts may be coming this year and 10-year bond yields are falling below 4.00%, the winds of recession are coming in hard.”

Shares in companies that would likely suffer the most during a recession saw some of the biggest declines, including JPMorgan Chase, which lost 2%, and Boeing, which fell more than 5%.

Stocks began the day on a high note, as Facebook parent Meta Platforms rallied more than 4% on stronger-than-expected second-quarter results and upbeat guidance.

But Meta was one of the few stocks in the green as the trading day went on.

Even stocks such as Nvidia, which has soared for much of the year, were feeling the pain, with the artificial intelligence chip leader off 8% as investors overall may be taking some figurative chips off the table into what could be a more volatile time for the market with a November election around the corner.

The S&P 500 is still up about 14% for the year, coming off its eighth-positive month in the last nine in July.