Stocks battled a flood of news and we booked some profits
Stocks finished last week slightly lower as the market battled a series of political headlines and policy news. To start the week, Federal Reserve Chairman Jerome Powell said he is under criminal investigation by the Trump administration related to the $2.5 billion renovation at central bank headquarters in Washington, D.C. The market didn’t like the uncertainty and attack on Fed independence. Global and geopolitical tensions also rattled the market when President Donald Trump threatened to put an additional 25% tariff on countries that do business with Iran. Bank kicked off earnings season. Despite solid reports, bank stocks were weaker last week on concerns about Trump’s call for a cap on credit card interest rates. In the middle of the week, the market got a favorable inflation report. The consumer price index increased of 0.3% for December, putting the annual rate at 2.7%. Both were in line with estimates and showed the pace of price increases moving closer to the Fed’s 2% target but still elevated. On a sector basis, volatility in the tech trade was caused by a pullback in Nvidia after Trump said the chipmaker needed to meet some new requirements to send its H200 AI chips to China. The U.S. will take a 25% cut on those sales. Other megacap names also came under pressure, including Amazon , Microsoft , Meta Platforms , and Broadcom . That helped fuel the broadening out trade with energy, industrials, and staples higher last week. .SPX .IXIC 5D mountain S & P 500 & Nasdaq 1 week For the week, the S & P 500 fell 0.1% and Nasdaq retreated 0.4%. However, the S & P Short Range Oscillator remained in overbought territory as of Friday’s close. When this happens, our discipline kicks in, and we look to trim positions that have moved up, which is what we did. We made a series of portfolio trades during the volatile week. On Monday, we trimmed our position in Texas Roadhouse to hedge against the risk of elevated beef prices, which have eaten into the company’s margins. We’re optimistic that beef prices will neutralize at some point which could lift shares of the restaurant chain. In the meantime, we booked some profits to be safe. We downgraded Texas Roadhouse to our hold-equivalent 2 rating. On Tuesday, ahead of earnings , we booked profits in Goldman Sachs and Wells Fargo after a run-up in both stocks. Wells Fargo reported an earnings and revenue miss on Wednesday. Goldman delivered a mixed quarter , missing on revenue but exceeding expectations on earnings on Thursday. We have a 2-rating on both bank stocks. On Wednesday , we cashed in some gains on Honeywell . Despite being a tough stock to own in 2025, we still like the industrial giant after announcing plans to pursue an initial public offering for Quantinuum, the quantum computing company in which it owns a significant stake. An IPO means Honeywell would monetize an asset that could be worth more in the public markets than its current value embedded in Honeywell. We downgraded the stock to our hold-equivalent 2 rating. We continued with another trade on Thursday, booking profits in Dover . The industrial name has been on a 24% tear since its last reported earnings in October, so we trimmed out of discipline. We downgraded our rating to a hold-equivalent 2. (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.
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