Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Market update: Stocks moved off their session highs and struggled to hold onto their gains. The S & P 500 is on pace for a small weekly dip, recovering most of its losses from Monday’s DeepSeek sell-off. The market was coasting for most of Friday on apparent optimism that President Donald Trump would delay imposing tariffs. Nothing was ever official and there was still a lot of debating if Trump would take a hard line or a soft line on trade. But the market gained some clarity on Trump’s position at around 1:15 pm ET and stocks dropped when White House press secretary Karoline Leavitt said the President plans to impose 25% tariffs on Mexico and Canada and 10% on China starting this Saturday, Feb. 1. The news triggered pullbacks in the two most tariff-sensitive stocks in the portfolio: Stanley Black & Decker and Constellation Brands . This week’s winners: The top-performing sector was communication services. Three other outperforming groups were health care, financials, and staples, thanks to the market rotating out of growth stocks and into value. One big earnings gainer this week was Meta Platforms . The stock was strong all week thanks to the market’s expectation that it will be a big beneficiary of open-source and low-cost AI models. The company also reported a strong fourth quarter. Some other big earnings gainers were IBM and cruise lines Royal Caribbean and Norwegian Cruise Lines . Starbucks had a great week too on some encouraging data points about its turnaround. And then there’s the solar tracker company Nextracker . It’s not in the S & P 500 but if it was, it would have been the biggest gainer. The losers: Some of the biggest losses were in AI infrastructure stocks. The DeepSeek news hit chip stocks like Nvidia , Broadcom , and Micron ; networking and server companies Arista Networks and Dell ; electrical equipment and power generation names like Eaton and GE Vernova ; and utilities Constellation Energy and Vista . Focusing on Nvidia for a moment. Although we expressed concern on Thursday about the potential of customers pausing orders as they digest DeepSeek’s low-cost model, a report published by SemiAnalysis on Friday suggested DeepSeek may not be as capital-expenditure efficient as the company claimed. Based on the report’s analysis, DeepSeek’s total server capex was roughly $1.6 billion, far greater than what they claimed. If the report is true, and it very well may be, this story would serve as serious pushback to this week’s narrative that less compute is needed to support AI, making this week’s sell-off potentially overblown. Outside of AI, one of the big earnings movers to the downside was UPS after announcing its plan to lower volume from its largest customer Amazon . Danaher was a loser within health care and it was quite a surprise given Thermo Fisher’s more upbeat outlook. It was likely conservative on Danaher’s end, but Cramer has said he is frustrated by management’s complacency. Walgreens shares sunk Friday after announcing a suspension of its quarterly dividend. And in retail, Deckers Outdoor shares dropped after providing softer-than-expected guidance. Lastly, energy had a tough week, too. Next week: We are approaching the busiest week of earnings season, with about one-quarter of the S & P 500 and eight companies in the portfolio scheduled to report. On the data side, we’ll see ISM manufacturing and services and the usual string of jobs data, culminating with the monthly non-farm payroll report on Friday. (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.
Mark Zuckerberg, CEO of Meta Platforms Inc., wears Orion augmented reality glasses during the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.
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Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.