Here are the things that drove the stock market this week
The Federal Reserve gave Wall Street a reality check this week, but the S & P 500 refused to let go of its consecutive weekly gains. Good military progress paved the way. The IS&P 500 jumped 1.1% on Thursday as investors shrugged off monetary policy concerns from the previous session, which had led to a 1.2% decline. The Nasdaq’s gain of 1.9% made up, and then some, for its previous session’s loss of 1.3%. The US and Iran signed a memorandum of understanding to extend their moratorium and reopen the Strait of Hormuz, sending oil prices lower for the week, supporting stocks. Chipmakers have also pushed higher. Here’s a closer look at what drove Wall Street this week. A new era at the Fed So, what caused that massive mid-week selloff that nearly spawned a bear market? Simply put, investors were spooked by Fed policymakers hinting at the possibility of interest rate hikes to combat stubborn inflation. Those signals came after the central bank kept rates unchanged at the end of its two-day meeting in June. At Wednesday afternoon’s post-meeting news conference, new Chairman Kevin Warsh said officials are committed to meeting the Fed’s goal of keeping inflation below 2%. Warsh toned down the Fed’s highly anticipated meeting policy statement and announced a series of reforms to reshape the agency. The market’s losses were reinforced during Warsh’s press conference on Wednesday and later, marking the worst performance of the S & P 500 on the first “Fed day” under the new chair since 1994. Still, stocks bounced back the next day and ended the shortened four-day trading week in the green. The IS&P 500 rose 0.9% for its 11th winning week in the past 12. The Nasdaq gained 2.4%. The market is closed on Friday for the June holiday. Chipmakers are out Our stocks continue to win this week. Intel stock rose 10.6% on Thursday and hit a record high after President Donald Trump said Apple would partner with the semiconductor company to develop and design chips in the United States. That brought Intel’s weekly gains to 7.6%. Nvidia and Broadcom, two other Club chip names, followed suit, rising 2.9% and 4.7%, respectively, on Thursday. The arm was up about 5% and reached the top. For the week, Nvidia rose 2.7%, Broadcom jumped 7.7%, and Arm ended 15.4% higher. The iShares Semiconductor ETF ( SOXX ) rose about 7.3% during that period. Jim Cramer has been bullish on Intel lately, and Thursday’s news just reinforced his conviction. We added to our position on Tuesday. Intel’s innovation business and its important role in providing central processing units to data centers are the main reasons we launched earlier this month. Jim named Intel his favorite stock on Wednesday during the Group’s June Monthly Meeting. “This is my No. 1 name,” he said at Thursday’s Morning Session. “It’s not Nvidia anymore.” To be sure, the power in chip stocks hasn’t spilled over into broader technology. Club Holdings Microsoft, Amazon, Meta Platforms, and Alphabet took the biggest hits Wednesday from the Fed’s speech as investors flocked to “safe” groups. Except for Microsoft, everyone else finished the week higher. But their weekly earnings are nothing compared to many of our shipbuilders. Meta and Amazon advanced 1.8% and 2.5%, respectively. Google parent Alphabet rose 2.3%. Microsoft, the laggard of the group, shed 2.9% in the long term. The war is on (for now) Hopes surrounding the US-Iran war sent stocks soaring earlier in the week after Trump announced that the two countries had agreed to a memorandum of understanding aimed at creating a lasting peace. On Friday, there were to be follow-up talks after the two sides signed the MOU. But those talks never happened. The deal gives the US and Iran 60 days to strike a final peace deal. We added to our Capital One position because the consumer bank is benefiting from lower oil prices. US crude is down nearly 10% this week, while the national average for a gallon of unrefined gasoline has dipped below $4. “We made a tough move this week at Capital One, a company we took from huge profits to almost nothing in a painful round trip,” Jim said at our June Monthly Meeting. (See here for a full list of stocks from 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 stock in his charity portfolio. When Jim talks about a stock on CNBC TV, he waits 72 hours after issuing a trade warning before making a trade. THE PRIVATE INFORMATION OF THE BURNING CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AND OUR PRIVACY POLICY. NO LEGAL LIABILITY OR OBLIGATION EXISTS, OR IS CREATED, BY YOUR ACCEPTANCE OF ANY INFORMATION PROVIDED BY CONTACTING THE INVESTMENT CLUB. NO PARTICULAR RESULT OR INTEREST IS GUARANTEED.
