Another superb week for stocks is in the books. The S & P 500 and Nasdaq rallied on Friday to close out the week at a record high as Wall Street celebrated another solid batch of earnings and a strong-but-not-too-strong jobs report, while holding out hope for an end to the hostilities in the Mideast. As with each week since late February, the Iran war remained a major focus for investors. But a dizzying number of headlines made it impossible to tell where the conflict was really headed next. Media reports on Wednesday said the U.S. and Iran were nearing a 14-point memorandum of understanding to end the war. A day later, both sides reported exchanging fire in the Strait of Hormuz, a critical global choke point for oil transport. On Friday morning, Secretary of State Marco Rubio said, “We should know something today” from Iran on the latest peace proposal. There was no word as of Saturday afternoon. Treasury Secretary Scott Bessent has already said Iran will be a topic at next week’s Beijing summit between President Donald Trump and China’s Xi Jinping . For the week, the S & P 500 jumped 2.3%, while the Nasdaq gained 4.5%. Both indexes are up for six weeks in a row — their longest winning streaks since 2024. It certainly helped that oil prices and bond yields dropped, which has been a bullish combination for stocks as of late. It’s unclear if the stock market will be able to continue its run into next week. Until then, here are three things that drove last week’s trading action. What’s next for the Fed? Friday’s mixed economic reports did not stop the market’s run. The April jobs report was strong, but consumer sentiment remained extremely low. They did complicate matters for the Federal Reserve’s next interest rate decision, though, with Jerome Powell’s term as central bank chairman ending on May 15 and Trump’s pick to take over, Kevin Warsh, zeroing in on Senate confirmation. The Labor Department said Friday that nonfarm payrolls rose by 115,000 last month , far surpassing economists’ muted expectations of 55,000, but well short of the 185,000 jobs created in an unusually strong March. The April unemployment rate held steady at 4.3%. The print weakened the case for a near-term rate cut because of the labor market’s resilience. However, it didn’t completely slam the door for Warsh, who has been a vocal proponent of lowering rates. Jim Cramer argued that the segments of the economy linked to housing and consumer spending still need lower rates. “I’m still a believer that the Whirlpool economy is what Warsh will focus on,” Jim said during Friday’s Morning Meeting , referring to slowing demand across lower-end consumer and housing-related categories. Shares of Whirlpool were crushed 20% this week after the company cut forward guidance and suspended its long-running dividend. The latest University of Michigan survey of how consumers feel about the economy backed up Jim’s view. Surging gas prices due to the Iran war sent the early May reading on consumer sentiment to a new low. Cyber stocks jump A quarterly earnings report from a cybersecurity competitor gave Club holdings CrowdStrike and Palo Alto Networks a boost, with their stocks rising roughly 16% and 15%, respectively, for the week. The driver was firewall provider Fortinet , which lifted its full-year billings guidance. Investors viewed the firm’s report as a read-through for the health of our favorite cyber names. Overall, it’s been a turbulent year for cyber stocks. The group has been unfairly caught up in the selloff in software names like Salesforce . Wall Street has sent the sector lower on AI-driven disruption concerns. We have long thought that more generative AI adoption will actually benefit cybersecurity companies, and we’re glad to see investors coming around to the idea. Optical partnership Our top performer last week was Corning , which surged 18%. The stock really got going on Wednesday after the company shared upbeat financial forecasts and announced a big supply agreement with Nvidia , which also had a strong week, gaining 8.4%. During an Investor Day presentation, Corning forecasted a $20 billion annualized sales run rate exiting 2026, resulting in a 15% compound annual growth rate (CAGR) for sales from the fourth quarter of 2023 to Q4 of 2026. Corning’s most optimistic projection through the end of the decade now targets a $40 billion annualized revenue rate exiting 2030. That same day, Corning announced it would open up three new U.S. manufacturing plants to produce optical fiber technologies with Nvidia. As part of the multiyear deal, Corning will grow U.S. optical connectivity manufacturing by tenfold and increase fiber production capacity by 50%. This is all in an effort to keep up with the immense amount of AI infrastructure demand. “We’re going through the single largest infrastructure buildout in human history,” Nvidia CEO Jensen Huang said on “Mad Money,” one day after the news dropped . On Thursday evening, Jim also interviewed Corning CEO Wendell Weeks, who also talked up the alliance. Weeks also said deals with two previously unnamed hyperscalers are “larger” than the $6 billion pact with Meta Platforms . (See here for a full list of the stocks in Jim Cramer’s Charitable Trust, including CRWD, PANW, CRM, GLW, NVDA, META.) 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