The Fed lowered interest rates, 2 stocks hit milestones

Third quarter earnings reports, the Federal Reserve's latest interest rate decision, and developments in the Sino-US trade war have led to some sharp swings in the stock market. However, all three benchmark indices, S&P 500, Nasdaq and Dow, managed to finish the week in the green. The US central bank on Wednesday delivered a widely anticipated quarter-point rate cut for the second time this year. Fed Chairman Jerome Powell has said he is committed to bringing inflation down to 2%. He also said that the rate cut in December was not a foregone conclusion. There were two voices opposing Wednesday's policy decision: Kansas City Fed President Jeffrey Schmid voted for no change in interest rates, while Fed Governor Stephen Miran favored a half-point cut. Big Tech's corporate earnings were also on investors' minds. What moved stocks the most was increased AI spending and revenue growth in cloud computing divisions. Club names Amazon, Microsoft and Meta Platforms have all done their part to move the market, albeit in different directions. (We'll explain our views on each of these statements later.) Finally, the United States and China reached a one-year trade deal Thursday after President Donald Trump and President Xi Jinping sat down for a high-stakes meeting in South Korea. As a result, the US will reduce fentanyl-related tariffs on China from 20% to 10%. This reduced overall duties on Chinese goods to roughly 47%. Beijing, in turn, agreed to a one-year suspension of rare earth export controls that the world's second-largest economy announced in early October. All of this caused huge fluctuations in the stock market last week. Although the S&P 500 closed at records on Monday and Tuesday and the tech-heavy Nasdaq did the same on Tuesday and Wednesday, both indexes fell significantly on Thursday. They recovered on Friday. We used the ups and downs of the market to our advantage. The S&P 500 index was in overbought territory earlier this week, a reminder that profits should be taken from names after solid gains. The big move in Danaher shares gave us the opportunity to do exactly that on Monday. The shares had risen 22% since the Club's last acquisition in September. Conversely, we increased our Nike position on Friday as the stock continued to fall despite clear signs that the turnaround was working. In October, the S&P 500 gained 2.3% and the Nasdaq gained 4.7%. Meanwhile, the Dow gained 2.5% on Friday for the sixth consecutive month for the first time since 2018. .SPX YTD mountain S&P 500 (SPX) annual performance Nvidia and Apple had their own milestones. Nvidia on Wednesday became the first U.S. company in history to surpass $5 trillion in market value. The stock was supported by strength in prolific AI trading and bullish updates from the chip maker's annual GTC conference. Management announced high-profile partnerships with Finnish telecom company Nokia and mobile phone provider T-Mobile. But investors became concerned about Nvidia's activities in China after Trump said Thursday that the chipmaker and Beijing should reach an agreement on their own over export controls for Nvidia's advanced artificial intelligence chips. Meanwhile, Apple hit a market cap of $4 trillion on Tuesday after Wall Street analysts cheered the stock on better-than-expected demand for its latest iPhone 17 series. JPMorgan and Baird raised their price targets. Shares rose further late Thursday but paused somewhat following an excellent quarterly earnings report on Friday. The company reported strong iPhone demand and big revenue for its key high-margin services unit. Apple was just one of 10 Club names to report earnings this week. Our newest addition to our portfolio, Corning, saw an increase in both top and bottom lines on Tuesday. Still, the glass maker's shares fell as investors took some profits after a dramatic rise in 2025. The club viewed this decline as a buying opportunity and raised our price target from $93 to $95. Corning is a great AI play because it produces the glass used in data center cables. The company's Club name and expanded production partnership with Apple makes us love it even more. Boeing posted a mixed quarter on Wednesday morning, highlighted by the plane maker's $9 billion write-down. The stock fell as shares beat Wall Street's estimates. If we didn't have portfolio constraints the Club would buy more. Microsoft released a solid quarterly earnings report on Wednesday evening, beating nearly every key metrics. However, shares remained under pressure due to high expectations and concerns about the tech company's increased spending on artificial intelligence. However, the Club raised its buy-equivalent rating on Microsoft shares to 1 from 2 and maintained its $600 price target. Similarly, Meta stock took an unnecessary hit after management raised its expense outlook and shared a large tax burden during the company's quarterly earnings report. The stock's decline continued on Thursday and Friday, ending the week down 10%. Jim said weakness is a buying opportunity for investors. Starbucks delivered a quarter like this late Wednesday. The coffee chain beat Wall Street's revenue expectations but missed its earnings target. It wasn't a blockbuster quarter, but it was enough for us to still believe in the turnaround story under CEO Brian Niccol. Eli Lilly posted such an excellent earnings report that we raised our price target from $800 to $925, thanks to both strong quarterly revenue and earnings per share performance. We maintained our buy equivalent rating of 1 on Lilly. Bristol Myers Squibb reported up and up for the quarter on Thursday morning, but that wasn't enough to change our cautious stance on the troubled stock. Club's thesis is based on the success of the company's promising schizophrenia drug, Cobenfy. We don't have answers yet on major trials. So when the pharma stock rose after earnings, we viewed it as an insignificant event for long-term investors and reduced our exposure. Amazon's cloud computing unit impressed us Thursday evening when the company reported third-quarter results. Management's outlook for the fourth quarter was also positive. As a result, we increased our price target on Amazon from $250 to $275 per piece and maintained our equivalent 1 point rating. Linde reported better-than-expected results on Friday, but a softer outlook for the remainder of 2025 sent shares falling. This version was not a development that changed our thesis for us. Industrial gas supplier Linde has enormous pricing power that ensures earnings growth regardless of macroeconomic conditions. Honeywell finally made headlines this week; even though he doesn't make a profit. The industrial conglomerate took another big step forward with its separation plan when its Advanced Materials business was finally split. Solstice Advanced Materials began trading Thursday under the symbol "SOLS." Shares of the specialty chemicals maker rose as much as 6% in the first session. As of October 17, Honeywell shareholders received four SOLS shares for every HON share held. Honeywell will separate its remaining aerospace and automation divisions in the second half of 2026. Fellow Club, which owns DuPont's electronics division called Qnity, will begin trading on the S&P 500 on Monday under the ticker symbol "Q." (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 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 CAN BE GUARANTEED.