How we navigated the strong market ahead of the big Fed meeting
It was a stellar week for stocks as Wall Street speculated on the Federal Reserve’s upcoming and highly anticipated interest rate decision and what comes next. The S & P 500 and Nasdaq each hit multiple record highs since Monday. A mixed bag of economic data, along with a blowout earnings report from Oracle , paved the way for the market’s gains as central bankers prepare for their two-day policy meeting that concludes on Sept. 17. The Nasdaq closed at a record on Friday. The S & P 500 finished slightly lower after reaching new intra-day highs earlier in the day. For the week, the S & P 500 gained 1.6% and the Nasdaq rose 2%. Late Tuesday, Wall Street first fixated on Oracle’s astonishing fiscal 2026 first quarter report . Management shared that the company’s remaining performance obligations, a measure of contracted revenue that has not yet been recognized, skyrocketed 359% from the year prior. Oracle stock closed at a record high Wednesday, jumping nearly 36% in the session that followed the release. Shares lost steam on Thursday and Friday, but still managed a weekly gain of 25.5%. The release raised more than just Oracle’s stock price. Shares of chipmakers like Club holdings Nvidia and Broadcom jumped in tandem as the software vendor’s huge cloud backlog signaled continued demand for AI infrastructure. Nvidia and Broadcom shares rose 4% and 10%, respectively, on Wednesday, and nearly 6.5% and almost 7.4% for the week. Economic data was also a big focus for investors this week. On Wednesday, investors grew more confident of an interest rate cut after the producer price index (PPI), a key wholesale inflation measure, fell more than expected in August. PPI, which tracks input costs across an array of goods and services, declined 0.1% last month. That’s compared to a Dow Jones estimate of a 0.3% increase. As a result, the S & P 500 and tech-heavy Nasdaq finished Wednesday’s session at records. Thursday complicated matters for policymakers, however, after prices for consumers accelerated more than expected in August. The consumer price index (CPI), a widely followed gauge of retail inflation, recorded a seasonally adjusted 0.4% increase for the month. That’s the biggest CPI gain since January and surpassed Dow Jones estimates of a 0.3% rise. During that same session, weekly jobless claims came in at their highest level in almost four years. This showed signs of further softness in the U.S. labor market and potential cracks in the country’s economy, leaving the door open for the Fed to lower rates more aggressively into the end of the year. Despite the murky readings, the jobs report seemed to overshadow CPI as traders priced in a great probability of a reduction for the first time since December 2024. .SPX .IXIC YTD mountain S & P 500 (SPX), Nasdaq Composite (IXIC) year-to-date performances The Club capitalized on the market’s moves with five trades since Monday. The Club bought Boeing twice this week. On Monday, we initiated a position in the aerospace giant after last month’s exit of Coterra Energy left us with an opening in the portfolio. The Club bought more Boeing on Friday as shares continued to decline. When starting a new position, we recommend that each additional purchase be at a lower price point than the previous one. That will help reduce the overall weighted average cost basis. The Club invested in Boeing, in part, because the Trump administration’s trade policies and subsequent tariff deals should strengthen demand for jets. The Club set a price target of $275 apiece on the stock, representing 27 % upside from Friday’s close. On Tuesday, we trimmed some of our Goldman Sachs position into strength as shares reached record highs. The sale, however, does not reflect any change in the Club’s thesis. We used the cash proceeds to purchase more Texas Roadhouse . Shares of the steakhouse chain have declined significantly since its earnings report in early August – a reaction we view as overdone. Shares saw weekly gains of nearly 5.7%. The Club bought more Honeywell shares Thursday in hopes that the Fed’s expected cuts will translate into a pickup in the economy, which would lead to more manufacturing and demand for the industrial conglomerate’s offerings. Plus, it’s a good time to buy as Honeywell stock has lagged compared to its peers in the runup to its split into three publicly traded companies. Some on Wall Street call this “spin purgatory ,” and it often has little to do with underlying fundamentals. The stock lost more than 1% for the week. WFC GEV YTD mountain Wells Fargo (WFC), GE Vernova (GEV) year-to-date performances Additionally, we took note of commentary from top executives at two of our portfolio companies: Wells Fargo and GE Vernova . On Tuesday, Wells Fargo CFO Mike Santomassimo shared positive mid-quarter updates that included a big increase in share repurchases. Wells has bought $5.5 billion of its stock quarter to date, according to the executive, more than the firm’s purchased in other quarter this entire year. To us, that’s a sign that management’s upbeat on both the firm’s capital levels and its earnings outlook. Santomassimo also added that Wells is seeing “really good green shoots” this quarter now that its $1.95 trillion asset cap has been removed and the bank goes on the offense. The CFO pointed to more revenue growth, for example, in its asset and wealth management businesses. “We started to change the company and really pivoted towards the businesses that we think have the best opportunity over the long run,” Santomassimo said at the Barclays Global Financial Services Conference. Shares, however, closed slightly lower Tuesday. This was likely due to profit-taking after Monday’s run and not with company fundamentals. For the week, Wells stock gained more than 3%. After that, GE Vernova stock sank 1.5% Thursday following CEO Scott Strazik’s mixed remarks at the Morgan Stanley Laguna Conference. Strazik said that onshore wind orders, which is a part of GE Vernova’s smallest business segment, remain soft and projected a decline in revenues in 2026 compared to 2025. This isn’t entirely unexpected, given the Trump administration’s critical stance on wind energy. Still, the CEO did seem upbeat on the demand for power – which is great news for a company that makes turbines used in the generate electricity. “Not only is the world going to need more energy, but the proportion of that energy that’s going to be coming from electrical power is going to grow.” Shares of the industrial name ended the week 7.4%% higher. AAPL YTD mountain Apple (AAPL) year-to-date performance Club holding Apple on Tuesday showcased its refreshed iPhone 17 lineup and other devices at the company’s annual hardware event. Shares fell 1.5% that session as some investors viewed the product updates – like longer battery life and better camera technology – as more evolutionary rather than revolutionary. Many wanted more material announcements regarding the company’s artificial intelligence suite, Apple Intelligence. The stock lost 2.3% for the week. Jim disagreed with the lackluster reception to the latest iPhone lineup. “Wall Street’s got it wrong. There are a lot of amazing things in this one versus this one,” Jim said Friday, also pointing to the new iPhone Air and some price increases. That being said, Apple’s generative AI rollout is still crucial to the company’s future success. “Ultimately, Apple still needs to deliver on its Apple Intelligence offering if we are going to see any dramatic acceleration in the upgrade cycle for its most important product: the iPhone,” Zev Fima, a portfolio analyst for the Investing Club, wrote in an analysis of the event. “The good news is that Tuesday’s updates certainly keep the Apple product line fresh and attractive, providing the time needed to nail down that AI strategy.” (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. 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