Why Fed chief Powell’s rate cut signal lifted our non-tech stocks the most

The past week on Wall Street was a rollercoaster ride, with a big Friday rally saving the market from what looked like a weekly loss at Thursday’s close. Federal Reserve Chairman Jerome Powell’s speech at the central bank’s economic symposium in Jackson Hole, Wyoming, on Friday hinted at possible interest rate cuts ahead, leading to a surge in the market. Stocks that stand to benefit the most from lower rates, such as DuPont and Home Depot, were among the winners for the week. However, defensive groups like Bristol Myers Squibb and Costco lagged behind.

Big tech stocks, such as Meta Platforms and Microsoft, finished slightly up on Friday but down for the week. The impact of rate cuts on these companies is not as significant as their fortunes are more tied to the growth in artificial intelligence.

The Dow Jones Industrial Average hit a new all-time high on Friday, surpassing its previous record close from early December. Both the S&P 500 and Nasdaq Composite also rallied on Friday, although they did not surpass the previous week’s milestones. While the Dow and S&P 500 posted overall gains for the week, the Nasdaq recorded a weekly loss.

Disney had a significant week with the launch of its new ESPN flagship streaming app, allowing the sports channel to become a standalone streaming service. Despite concerns from some on Wall Street about the lack of subscriber numbers for the new ESPN offering, Disney CEO Bob Iger emphasized that subscriber figures are “irrelevant” and that Disney is focusing on engagement rather than immediate subscriber numbers.

Three Club names reported quarterly earnings this week. Palo Alto Networks exceeded expectations and provided upbeat guidance for fiscal year 2026. CrowdStrike and Nvidia are set to report earnings next Wednesday.

Home Depot posted mixed results but saw a surge in its stock following reassurances from management during the post-earnings conference call. TJX Companies reported strong quarterly earnings, leading to an increase in the company’s full-year outlook.

The Club made only one trade this week, purchasing more shares of Cisco Systems. Despite a decline following its earnings release, the Club saw the reaction as overblown and CEO Chuck Robbins effectively addressed investor concerns.

As a subscriber to the CNBC Investing Club with Jim Cramer, trade alerts are provided before any trade is made. Jim Cramer waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio.

Overall, it was a volatile yet ultimately positive week for Wall Street, with key players in various sectors making significant moves in response to market conditions and economic developments.