3 forces that drove another historic – yet volatile – week for the S&P 500

Another week has passed under the influence of the Iranian war. S&P 500 and Nasdaq finished Friday with record closing highs, following the negative effects of developments in the Middle East throughout the week. Oil prices have also fluctuated wildly due to Iran and the United States' blockade of the Strait of Hormuz, a critical oil shipping route. However, the record-breaking gains capped another positive week for the S&P 500 and Nasdaq, with gains of 0.6% and 1.5%, respectively. The Iran war was not the only issue focused on. Corporate earnings and the split in hardware and software stocks also caught our attention. Here's a breakdown of three themes impacting Wall Street over the last five sessions. War headlines Monday was a down day for stocks, with little progress in last weekend's peace talks. Tuesday didn't go well after President Donald Trump told CNBC that the United States is "ready" to bomb Iran if a deal isn't made by Wednesday's ceasefire deadline. The situation turned on Wednesday, when the S&P 500 and Nasdaq indices closed at records after Trump announced that the ceasefire would be extended for two weeks. Another reversal came on Thursday, just as the market finally found its bearings. When Trump said he had ordered the US Navy to "shoot and kill any boat" that mines the Strait of Hormuz, stocks came under pressure and oil rose. Still, stocks managed to close the week strong. Investors believe peace talks will restart soon. The S&P 500 and Nasdaq rose 0.8% and 1.63%, respectively, on Friday. to new heights. We'll have to see if peace talks happen this weekend. US special envoy Steve Witkoff and Jared Kushner are heading to Pakistan to hopefully meet with their Iranian counterparts. All the developments in the war reminded us of one thing: Do not make big business only through the Middle East conflict. There is a lot of uncertainty and volatility that is not based on stock fundamentals. We have been saying this since February 28, when the war started. Duality in technology The buy hardware, sell software trade has started again. Investors have bought into technology stocks seen as supporting the development of AI infrastructure, abandoning those seen as threatened by its adoption. The week's biggest winners? Chip stocks. The group met for the 18th consecutive session on Friday, boosted by Intel's stunning earnings report. This is great news for us as investors in Nvidia, Broadcom and most recently Arm. On Monday, we initiated a position in Arm with the belief that the stock will be a winner in the age of AI agents. Since then, shares are up about 33%. During the week, Nvidia increased by 3.2%, closing Friday at a record high, while Broadcom increased by approximately 4%. We took profits again on Broadcom on Friday, paring our gains with the stock's recent parabolic rise. Broadcom finished the week with a new high. On the other side of the trade was software. This group was defeated following gains from IBM and ServiceNow. Investors were disappointed that IBM did not raise guidance after hits to its top and bottom lines. ServiceNow margins and growth in subscription revenues, weakened by the war, were also a concern. As a result, software stocks fell, meaning a bad Thursday for Salesforce and Microsoft. For the week, Salesforce lost 2% while Microsoft rose 0.4%. Our cybersecurity names Palo Alto Networks and CrowdStrike were unfairly grouped in sales, but each managed to gain around 6% for the week. IBM and ServiceNow earnings weren't the only quarterly earnings on our radar. GE Vernova and Dover showed us the importance of AI architecture; Aerospace was key to Boeing and Honeywell's reports. The insatiable demand for energy fueling the AI boom was a financial windfall for GE Vernova and Dover. Shares of GE Vernova rose nearly 14% thanks to massive earnings on Wednesday. The club raised its price target on GE Vernova from $1,000 to $1,300. Orders for heavy-duty natural gas turbines won't be slowing down at all, as hyperscalers pour billions of dollars into data center construction. "This could be something for the ages," Jim said during Wednesday's Morning Meeting. Dover shares are up nearly 6% based on Thursday's results. It was an impressive quarter that reminded us why the company is in the portfolio. We increased our PT from $230 to $245. Order growth has been staggering. Dover is riding the AI wave because it plays a role in liquid cooling of data centers. GE Vernova closed Friday at a record high. Dover finished the week about 3% below its record close on Feb. 20. Investors gained as they worried about Boeing and its aviation peers amid the belief that war-induced high jet fuel prices would hurt demand and profits. That turned out not to be true for our Boeing, which reported better-than-expected earnings on Wednesday. As a result, the stock rose 5.5% in one session. It was also a step in the right direction for the turnaround under Boeing CEO Kelly Ortberg. Honeywell shares fell on Thursday after data showed that disruption at its aerospace unit in the Middle East hurt sales. But the quarter was more encouraging than the market thought. More significant developments were that Honeywell agreed to sell its Warehouse and Workflow Solutions unit and set June 29 as the date to spin off its aerospace business to a separate company. The second remaining company's focus will be automation. (See here for a complete list of stocks in Jim Cramer's Charitable Trust.) When you subscribe 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 trading alert before buying or selling a stock in his charitable foundation's portfolio. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing the trading alert before executing the trade. 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