Trump's China threat slams stocks — plus, our best, worst of bull market

Every weekday, CNBC Investment Club with Jim Cramer publishes Homestretch, an actionable afternoon update just in time for the final hour of trading on Wall Street. Markets: Stocks were selling off to close out the week after President Donald Trump threatened to increase "major" tariffs on China amid a dispute over rare earth minerals. Over the summer, Trump warned that he would impose higher tariffs on China if it restricted exports of rare earth magnets. But the announcement still surprised the market because trade relations appeared to have improved in recent months. There are several reasons why the magnitude of this decline is so sharp. The president's warning gave investors a reason to profit from AI-related names that have been on the rise over the past few weeks. It's also Friday, which means investors are looking to preserve their gains and reduce their stock exposure amid concerns that tensions could escalate further over the weekend. Volatility has also been quite calm lately. This was the first 1% decline for the S&P 500 since August 1. The index closed with a loss of 2.7%. The Nasdaq lost roughly 3.6%. As a club, we will not overreact even to a single post of the president on social media. Trump's business playbook has generally been to talk tough at the start, then tone down some threats once a deal or some sort of middle ground appears. If these threats become reality, we will adapt. Anniversary: The current bull market in stocks turns three years old on Sunday, October 12. Since the market is closed for the weekend, we examine the Investing Club portfolio from October 12, 2022 (which was then on a Wednesday) until Friday at 14:00. It's no surprise that our top performer is Nvidia. (In case you missed it, watch Jim Cramer's interview with Nvidia CEO Jensen Huang at this week's October Monthly Meeting.) During this period, the AI chip powerhouse is up roughly 1,527%. The next three winners are also technology-related. Broadcom, a designer of custom, purpose-built chips, is up more than 665%; Meta Platforms, the powerhouse of Facebook, Instagram, Threads and WhatsApp, gained almost 458%; and cybersecurity firm CrowdStrike gained over 224%. The four worst performers in the three-year bull market were drugmaker Bristol Myers Squibb, down more than 36%; sportswear icon Nike down nearly 26%; life sciences firm Danaher and coffee giant Starbucks each fell about 9%. Next week: The start of third-quarter earnings season is upon us. More than 30 companies in the S&P 500 are scheduled to report next week; Major banks such as Goldman Sachs, Wells Fargo, JPMorgan and Citigroup will begin work on Tuesday. BlackRock, the world's largest asset manager, is also announcing results on Tuesday, along with Johnson & Johnson. We'll hear from Abbott Laboratories as well as Bank of America and Morgan Stanley on Wednesday. Other notable reports for next week include American Express, CSX, Charles Schwab, SLB and Prologis. (See here for a complete list of stocks in Jim Cramer's Charitable Trust, including NVDA, AVGO, META, CRWD, BMY, NKE, DHR, SBUX, GS, WFC, BLK.) — Matthew J. Belvedere contributed to this report. 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 waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT GUARANTEE IS MADE.