Third-quarter earnings reports, the Federal Reserve’s latest rate decision, and developments in the China-U.S. trade war led to some wild swings in the stock market. However, all three benchmark gauges — the S & P 500 , Nasdaq , and Dow — managed to finish in the green for the week. The U.S. central bank on Wednesday delivered a widely expected quarter-point interest rate cut for the second time this year. Fed chairman Jerome Powell said that he’s committed to bringing inflation down to 2%. He also said that a December rate cut was not a foregone conclusion. There were two dissenters to Wednesday’s policy decision: Kansas City Fed President Jeffrey Schmid voted for no change in rates, while Fed Governor Stephen Miran was in favor of a half-point cut. Corporate earnings from Big Tech were on investors’ minds, too. What moved stocks the most was increased AI spending and revenue acceleration in cloud computing divisions. Club names Amazon, Microsoft, and Meta Platforms all did their part to move the market — albeit in different directions. (We’ll break down our take on each of these releases later on.) Finally, the U.S. and China reached a one-year trade agreement Thursday after President Donald Trump and President Xi Jinping sat down for a high-stakes meeting in South Korea. As a result, the U.S. will reduce fentanyl-linked tariffs on China to 10% from 20%. This lowered the overall levies on China goods to roughly 47%. Beijing, in turn, agreed to a one-year pause on rare earth export controls that the world’s second-largest economy had announced in early October. All of these caused big fluctuations in the stock market over the past week. Although the S & P 500 closed at records on Monday and Tuesday, and the tech-heavy Nasdaq did the same on Tuesday and Wednesday, both indexes fell significantly on Thursday. On Friday, they rebounded. We used the market’s highs and lows to our advantage. The S & P 500 was in overbought territory earlier this week, serving as a reminder to take profits on names after solid runs. A big move in Danaher stock gave us an opportunity to do exactly that on Monday. Shares had surged 22% since the Club’s last buy in September. Conversely, we added to our Nike position on Friday as the stock continues to slide despite clear signs that its turnaround is working. For October, the S & P 500 increased by 2.3% and the Nasdaq advanced by 4.7%. Meanwhile, the Dow secured its sixth consecutive month of gains Friday – the first time since 2018 — with a return of 2.5%. .SPX YTD mountain S & P 500 (SPX) year-to-date performance Nvidia and Apple had their own milestones. Nvidia was the first U.S. company in history to surpass a $5 trillion market capitalization on Wednesday. The stock was supported by strength in the generative artificial intelligence trade and bullish updates from the chipmaker’s annual GTC conference. Management announced high-profile partnerships with Finnish telecom firm Nokia and cellular provider T-Mobile . Investors have been concerned, however, about Nvidia’s China business after Trump said Thursday that the chipmaker and Beijing would have to settle a deal themselves on export controls of Nvidia’s advanced AI chips. Meanwhile, Apple reached a $4 trillion market capitalization on Tuesday after Wall Street analysts cheered the stock due to better-than-expected demand for its newest iPhone 17 lineup. JPMorgan and Baird both raised their price targets. Shares surged even further late Thursday but stalled out some on Friday after a stellar quarterly earnings report. The company reported strong iPhone demand and huge revenues for its crucial high-margin services unit. Apple was just one of 10 Club names to report earnings this week. Corning , our newest addition to the portfolio, posted a beat on the top and bottom line Tuesday. Still, shares of the glassmaker fell as investors took some profits following a stunning advance in 2025. The Club used the dip as a buying opportunity and raised our price target to $95 from $93. Corning is a great AI play because it makes the glass used in data center cables. The firm’s expanded manufacturing partnership with Club name Apple makes us like it even more. Boeing posted a mixed quarter on Wednesday morning, highlighted by the aircraft maker’s $9 billion charge-off. The stock sank on the release as the charge was higher than Wall Street’s estimates. The Club would have bought more if it weren’t for our portfolio restrictions. Microsoft posted a decent quarterly earnings report on Wednesday evening, beating nearly every key metric. But shares were pressured due to lofty expectations and concerns about the tech company’s increased spending on AI. The Club, however, upgraded Microsoft stock to a buy-equivalent 1 rating from a 2, and maintained its $600 price target. Similarly, Meta stock took an unnecessary beating after management raised its expense outlook and shared a massive tax charge during the company’s quarterly earnings report. The stock’s decline continued into Thursday and Friday, closing the week out 10% lower. Jim said the weakness was a buying opportunity for investors. Starbucks delivered a so-so quarter late Wednesday. The coffee chain beat Wall Street’s expectations for revenue but missed its earnings target. It wasn’t a blockbuster quarter, but it was enough for us to still believe in the turnaround story under CEO Brian Niccol. Eli Lilly released an earnings report so stellar that we raised our price target to $925 from $800, driven by both strong quarterly revenue and earnings per share performance. We maintained our buy-equivalent rating of 1 on Lilly. Bristol Myers Squibb reported a beat-and-raise quarter Thursday morning, but it wasn’t enough for us to change our cautious stance on the problematic stock. The Club’s thesis hinges upon the success of the Cobenfy, the firm’s promising schizophrenia drug. We still don’t have answers about key trials yet. So when the drug stock advanced after earnings, we viewed it as a non-event for long-term investors and reduced our exposure . Amazon’s cloud computing unit impressed us Thursday evening when the company reported third-quarter results. Management’s outlook for the fourth quarter was decent, too. As a result, we increased our price target on Amazon to $275 per piece from $250 and maintained our buy-equivalent 1 rating. Linde reported better-than-expected results on Friday, but a softer outlook for the remainder of 2025 caused the stock to decline. The release wasn’t a thesis changer for us. Linde, the supplier of industrial gases, has immense pricing power that ensures earnings growth no matter the macroeconomic backdrop. Finally, Honeywell made headlines this week – albeit not for earnings. The industrial conglomerate took another big step with its breakup plan as its Advanced Material business finally split. Solstice Advanced Materials started trading on Thursday under the ticker symbol “SOLS.” Shares of the specialty chemicals maker jumped as much as 6% in their first session. Honeywell shareholders as of Oct. 17 received four SOLS shares for every one HON share owned. Honeywell will separate its remaining aerospace and automation divisions in the second half of 2026. Fellow Club holding DuPont’s electronics business, dubbed Qnity, will begin trading on the S & P 500 on Monday under the ticker “Q.” (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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.
Be the first to comment