Every weekday, the CNBC Investing Club with Jim Cramer provides the Homestretch, an actionable update designed for the last hour of trading on Wall Street. On Wednesday, the S&P 500 made a rebound, turning positive as investors focused on strong bank earnings instead of the latest trade tensions between the Trump administration and China. Notably, Bank of America shares surged by over 3.5%, while Morgan Stanley experienced a remarkable 5% increase, both banks posting quarterly earnings and revenue that exceeded expectations. This trend followed strong results from Club names like Wells Fargo, BlackRock, and Goldman Sachs earlier in the week. Wells Fargo stood out in particular, achieving an all-time high as it entered Wednesday’s close with a more than 10% increase over three consecutive sessions.
In relation to the ongoing trade situation with China, Treasury Secretary Scott Bessent emphasized that the market’s response to trade talks wouldn’t deter the U.S. from prioritizing its economic interests. This follows President Trump’s threats of a cooking oil embargo against China due to Beijing’s refusal to purchase U.S. soybeans. The new hostilities were triggered last week when China implemented export controls on rare earths, prompting Trump to announce an additional 100% tariff on certain Chinese goods starting November 1.
In another dimension of federal actions, Budget chief Russ Vought indicated that job cuts for federal workers would likely exceed 10,000, fulfilling Trump’s intention to reduce the federal workforce amid the ongoing government shutdown.
Meanwhile, the artificial intelligence (AI) boom continues to dominate Wall Street despite rising tensions with China. An investor consortium, including Club members Microsoft, Nvidia, and BlackRock, has announced a $40 billion acquisition of Aligned Data Centers. This deal is also supported by Elon Musk’s xAI, which has been a significant consumer of Nvidia chips. Zev Fima, portfolio analyst for the Club, commented on the significance of this development, stating that it showcases the extreme demand for AI infrastructure and power, reinforcing the notion that we are in the early stages of an extensive AI trend.
In a related technology development, Apple has introduced refreshed versions of its MacBook Pro, iPad Pro, and Vision Pro, featuring a new M5 chip designed to enhance AI performance. This launch, scheduled for October 22, follows last month’s unveiling of the iPhone 17 and Apple Watch Series 11 and aims to strengthen Apple’s product lineup for the upcoming holiday shopping season, which is typically its most lucrative quarter.
Moreover, Apple’s services head, Eddy Cue, discussed the company’s streaming ambition on a podcast, indicating that while Apple TV may not be gaining massive investor attention, its integration into the broader services unit—home to Apple Music and iCloud subscriptions—remains critical for profit growth. Cue acknowledged ongoing challenges in content production but expressed optimism about the service’s improved performance, revealing that subscriber numbers are significantly greater than previously reported estimates.
Looking ahead, investors await economic reports such as the Philadelphia Fed’s manufacturing index and NAHB’s housing market index, as the government shutdown continues to delay broader economic updates. The upcoming quarter will also feature results from Taiwan Semiconductor Manufacturing, a key fabricator of Nvidia chips, though no further Club earnings are anticipated this week.
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