Cybersecurity stocks rise thanks to IBM, and Nvidia rises on good China news
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch – an afternoon update that can work, during the last hour of trading on Wall Street. Stocks are higher on Tuesday, as the S&P 500 recovers nearly half of Monday’s losses. A cooler-than-expected June consumer price index (CPI) report helped change market futures, as traders pushed back expectations of a rate hike at the Federal Reserve’s late-July policy meeting. But oil continued its rally, with US WTI crude oil briefly surpassing $80 a barrel. This comes as President Donald Trump said the 20% reimbursing fee he plans to impose on shipping through the Strait of Hormuz will be replaced by investment agreements with Gulf states. IBM’s weaker-than-expected first-quarter earnings are a major market story, and the company’s reasons for the deficit are influencing several corners of the market on Tuesday. IBM CEO Arvind Krishna said customer buying patterns were affected by how customers spent money on tech hardware such as servers, storage and memory before the price hikes showed. Krishna added that customers are “disturbed” by cybersecurity concerns. His comments reflect a new reality for business IT budgets: More dollars are being allocated to cyber security, hardware, and, potentially, AI computing tokens as companies try ways to improve efficiency and create new tools. This leaves less money to spend on software and other categories. IBM’s claims explain why cybersecurity stocks like Club names CrowdStrike and Palo Alto Networks are among the top performers in the S & P 500, along with Dell, Micron and others in the storage and memory food chain. Health care is the worst performing sector. HCA Healthcare leads the group down after the company announced preliminary results for the second quarter and lowered its full-year earnings per share. A hospital administrator said he has seen an increase in uninsured volumes from patients who lost coverage on the health insurance exchange. HCA’s profit warning includes weaker-than-expected surgery rates in the second quarter, which pressured shares across the medical device sector. We’ll see on Wednesday whether Johnson & Johnson’s medical device business has experienced a similar situation. Medical devices make up about 36% of J&J’s total revenue. However, that share will shrink once the company completes the divestment of its orthopedics business. The divestment was announced in October 2025 with a target timeline of 18 to 24 months. Shares of Nvidia were up 4% on signs that the company may be getting its foot back in China’s AI market. Jeffrey Kessler, the under secretary of commerce for industry and security, said on Tuesday that a “small” number of Nvidia H200 chips had been shipped to China. We don’t want to go too far until we see Nvidia come out and say they’ve started collecting money from China, considering we’ve seen a lot of fake heads here. Still, Kessler’s comments, released in court, mark the second encouraging sign in the past two weeks that Nvidia may have regained access to China’s massive AI market. Last Wednesday, we highlighted a report by The Information that said China plans to allow a few AI companies to buy a limited number of H200 chips. Trump said in December 2025 Nvidia could sell the chips to “authorized customers,” in exchange for a 25 percent cut. Boeing announced on Tuesday that it delivered 171 jets in the second quarter, marking its first half of the year since 2018. The company took delivery of 64 jets in June, an improvement from 60 in May. Last week, the company brought online its fourth 737 MAX line at its Everett, Washington plant. Although production will take time to ramp up, the expansion is a milestone in Boeing’s plan to increase production from 42 jets per month to 47, and then to 52 per month next year. Generating more programs and increasing deliveries is critical for Boeing to improve annual free cash flow. Looking ahead, we expect to see Boeing score more aircraft orders at the Farnborough International Airshow in England next week. This is the industry’s largest event, held on alternate years with the Paris Air Show. There are no big paydays after the closing bell. Before the opening bell on Wednesday, we will see gains from Johnson & Johnson, Dutch chip-equipment maker ASML , BlackRock , Slim Jim owner Conagra Brands , Morgan Stanley , uniform supplier Cintas , major regional bank PNC Financial , and BNY . On the data side, we will see the wholesale producer price index (PPI) report, and the market will hope to see another cool print after Tuesday’s CPI. 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