Quad witching, Nike slides, weed rules and more in Morning Squawk

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Here are five key things investors need to know to start the trading day:

Wall Street could be in for a wild trading day when options on four types of securities expire: index options, single stock options, index futures and index futures options. “Quadruple witching” day happens just four times a year and this one’s set to be a monster.

Here’s what to know:

• Stock futures were little changed in premarket trading, a day after the S&P 500 and Dow Jones Industrial Average snapped a four-day losing streak after a softer-than-expected inflation report, though with caveats.
• Goldman Sachs says today will be a record with more than $7.1 trillion in notional options exposure set to expire, including $5 trillion tied to the S&P 500 index and $880 billion linked to single stocks.
• December options expirations are usually the year’s biggest, but this one eclipses all records, Goldman said.
• This week, the S&P 500 and 30-stock Dow are down about 0.8% and 1%, respectively. The Nasdaq is down 0.8% week to date.
• Meanwhile, TikTok CEO Shou Zi Chew told employees that the company’s U.S. operations will be housed in a new joint venture.
• Follow live market updates here.

Nike shares were down sharply in premarket trading after the sportswear giant warned sales would fall in the current quarter and executives pointed to continued challenges in China.

Nike said it expects fiscal third-quarter revenue to drop by a low single-digit percentage, with modest growth in North America, and forecast gross margins will shrink 1.75 to 2.25 percentage points, including a 3.15 percentage point hit from tariffs.

Investors were hoping for more but it wasn’t all bad news out of Nike. Strong North America sales helped offset the plunge in China and results came in ahead of Wall Street’s expectations. CEO Elliott Hill called it the company’s “middle inning of our comeback.”

President Donald Trump signed an executive order yesterday that directs federal agencies to reclassify marijuana, loosening long-standing restrictions on the drug and marking the most consequential shift in U.S. cannabis policy in more than half a century.

Once finalized by the Drug Enforcement Administration, the order moves cannabis out of Schedule I classification — the most restrictive category under the Controlled Substances Act, alongside heroin and LSD — to a Schedule III classification: substances with accepted medical use and a lower potential for abuse, such as ketamine and Tylenol with codeine.

Shares of cannabis companies fell following the announcement, likely from worries of new competition.

Separately, U.S. Department of Homeland Security Secretary Kristi Noem said she was suspending the diversity visa program, saying the man suspected of killing two students at Brown University had been granted one.

There’s a new leader in college sports — the University of Texas at Austin. The school’s athletic program topped CNBC’s valuation rankings and is now worth $1.48 billion, 16% more than last year.

In fiscal 2024, the program generated aggregate revenue of $332 million, more than any other school and 23% more than in the previous year, according to figures from the Knight-Newhouse College Athletics Database at Syracuse University, up 53% from 2023.

Last year’s most valuable athletic program, Ohio State University, fell to No. 2 with a value of $1.35 billion, 2% more than a year ago. Read the full 75-school ranking here.

Here are some stories we’d recommend making time for this weekend:

— CNBC’s Laya Neelakandan, Chloe Taylor, Lillian Rizzo, Pia Singh, Luke Fountain, Yun Li, Brandon Gomez, Michael Ozanian, Elsa Ohlen, Jonathan Vanian and Julia Boorstin contributed to this report