Gainers, laggards over the past month amid tariff, Mideast uncertainty
The U.S. stock market ripped higher over the past month despite mounting uncertainty around President Donald Trump’s “reciprocal” tariffs and escalating conflict in the Middle East. Since our last Monthly Meeting on May 21 through Tuesday’s close, the S & P 500 jumped 4.2%, while the Nasdaq rose 5.5%. The Dow Jones Industrial Average climbed nearly 3% over the period, too. (The Club’s June Monthly Meeting will be held on Wednesday at noon ET. The livestream can be watched by members here .) Wall Street was mixed early Wednesday. Wall Street has taken the murky macro environment in stride as tariff deadlines loom. In fact, top U.S. trading partners have roughly two weeks to settle talks. The White House, for example, has held off on implementing additional higher levies of up to 50% on the European Union until July 9. Dozens of other exporting nations, such as Canada and Japan, face the same time crunch. China is on its separate track. Beijing has an agreement with the United States that extends into August, providing additional time for trade talks to unfold. So far, Trump has only managed to firm up a deal with the United Kingdom. Investors are also following the war between Israel and Iran, which started on June 13 after Israel targeted the energy-rich nation. Iran retaliated shortly after that. The U.S. joined the conflict and backed Israel by bombing three Iranian nuclear facilities over the weekend. On Tuesday, Trump announced that both Middle Eastern countries had come to a ceasefire. It’s unclear, however, how long that may last. Still, somehow, the market has largely shrugged off these headlines. The only real volatility seen has been in global oil prices, which have fluctuated dramatically while traders speculate on what the Iran-Israel feud means for crude supply. While modestly higher early Wednesday, the U.S. oil benchmark, West Texas Intermediate, sank 6% on Tuesday and 7% on Monday. Still, WTI was up almost 6% month-to-date, which explains why our lone energy stock Coterra has had such a strong June. Overall, we have used the stock market’s run higher to our advantage. On Tuesday, the Club offloaded some shares of cybersecurity company CrowdStrike and industrial conglomerate Eaton — booking healthy profits in each. The Club’s best performers out of our 30 stocks — and our laggards, too — also highlight some of the forces driving the market over the past month. The generative artificial intelligence trade has continued to gain momentum, putting names like Broadcom , GE Vernova , and Nvidia at the top of the list. The Street’s turn away from retailers such as Home Depot and TJX as a result. Salesforce was also a struggling stock, but for different reasons. Here’s what drove the moves in each of these six names since the May Monthly Meeting through Tuesday’s close. Gainers Broadcom up 14.8% AVGO YTD mountain Broadcom (AVGO) year-to-date performance There’s been renewed optimism in AI adoption, which has benefited chipmakers like Broadcom over the past month. Shares reached an all-time high Tuesday after HSBC upgraded it to a buy from a hold rating. Analysts argued that Wall Street has undervalued Broadcom’s custom chip revenue potential. Broadcom’s custom chip business is a key reason why we’re bullish on the stock. The HSBC note was one of several positive calls from analysts in recent weeks. Still, we trimmed some of our Broadcom position on May 27 due to its outsized gains. On Tuesday, Jim Cramer said he would have been tempted to sell some again if not restricted. GE Vernova up 12.8% GEV YTD mountain GE Vernova (GEV) year-to-date performance This industrial stock owes its recent gains to the AI trade as well, specifically the buildout of data centers. That’s because GE Vernova sells the gas and wind turbines used to generate energy for these power-hungry facilities. On Tuesday, the stock hit a record high — one of several in the past month alone — after Morgan Stanley issued a price target increase to $511 from $422 apiece, citing stronger conviction in the company’s ability to capitalize on this electrification trend. The PT raise was a catch-up call, and early Wednesday, GE Vernova shares already topped that level. Nvidia up 12.2% NVDA YTD mountain Nvidia (NVDA) year-to-date performance Like the rest of our winners, AI plays a key role in Nvidia’s run higher. After all, Nvidia’s graphics processing units (GPUs) are a key driver of the AI revolution. A stellar quarterly earnings report on May 28 excited investors even more. This was proof to Wall Street that concerns about a slowdown in AI spend were overblown. We raised our price target on the stock to $170 from $165 as a result of the release. On June 11, Nvidia received another boost when CEO Jensen Huang announced a slew of infrastructure partnerships with European countries and corporations at Nvidia’s GTC event. Those followed big deals Nvidia made in the Mideast when Trump visited Saudi Arabia, Qatar, and the United Arab Emirates last month to drum up investments in the U.S. Nvidia shares were on pace for a record close of Wednesday morning trading. Laggards TJX Companies down 4.9% TJX YTD mountain TJX Companies (TJX) year-to-date performance Shares of TJX have been dragged lower with the other discount retailers as investors turned to high-growth tech stocks instead. Case in point: Costco was our fourth-worst-performing name in the portfolio. TJX, in particular, had a huge run in months past after Trump first unveiled his “reciprocal” tariffs in early April because the Marshalls’ parent has little exposure to international markets. Also, an uncertain macro environment typically attracts the value-conscious consumers that TJX, which is also behind the T.J. Maxx and HomeGoods off-price chains. Now that concerns about Trump’s trade policies and the U.S. economy have seemingly subsided, investors are putting money to work in other areas of the market. Salesforce down 3.9% CRM YTD mountain Salesforce (CRM) year-to-date performance The enterprise software name took a hit following its May 28 earnings report. Although Salesforce issued a beat and raise, its slight miss on current remaining performance obligation (cRPO) growth for the second quarter disappointed investors. Concerns that Salesforce’s AI suite, Agentforce, isn’t growing fast enough didn’t help sentiment either. Plus, management announced last month an $8 billion purchase of software maker Informatica , the company’s largest acquisition since Slack in 2021. Some on Wall Street aren’t sold that the costly acquisition will be worth it. Jim, however, has tried to reassure investors. “This is a moment where you need to have some faith in management,” he said earlier this month . “I have faith, but you need to decide for yourself if you’re willing to trust [CEO] Marc Benioff and his team, because, ultimately, that’s all this comes down to, and for many I know that’s just not enough.” Home Depot down 2.8% HD YTD mountain Home Depot (HD) year-to-date performance Like TJX, shares of Home Depot were partially weighed down by the rotation into AI-related stocks. Lackluster housing market data, however, was the biggest reason why Home Depot has underperformed. Housing starts, which measure the rate of the construction of new homes, plummeted to a five-year low in May. That does not bode well for sales of the company’s products like tools, appliances and different building materials. We’re not concerned as long as interest rates remain steady and the housing market eventually rebounds. “People just look at housing starts and they say, ‘Let’s sell Home Depot.’ Don’t be constrained by that,” Jim said last week. “They’re going to have a great year. Let’s think seven years, not seven days.” (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.
<
