Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Stocks jumped on Wednesday after the midterm elections, with the S & P 500 up about 1.7%. The elections turned out to be a clearing event for many parts of the market. WTI crude was down over 8%, falling below $90 per barrel, on hopes that the Democrats winning control of Congress means there won't be an escalation in the Middle East War. That pushed oil and gas stocks lower while lifting companies with exposure to energy commodities and the Middle East. There's also a view that the Democratic victory could lead to a rollback of tariffs, given how important affordability was to voters. Treasury yields also moved lower, with the benchmark 10-year yield dipping to 4.9%. The decline in oil prices, Treasury yields and tariff expectations provided a much-needed boost to housing-related stocks like Home Depot , which is back in positive territory for the year for the first time…
Why we're kicking CVS out of our Bullpen watchlist. Plus, Intel's CEO makes a stand
In short
The S&P 500 jumped roughly 1.7% as WTI crude plummeted over 8% below $90 per barrel and the 10-year Treasury yield fell to 4.9%. Amid these macroeconomic shifts, hyperscalers like Alphabet and Microsoft gained on expectations that reduced capital spending could improve free cash flow. In contrast, data center infrastructure providers faced pressure over regional building resistance, and CVS Health lost its watchlist spot after deciding to split its retail pharmacies from Aetna.
Key points
- Lower energy costs and falling Treasury yields provided significant tailwinds for consume…: Lower energy costs and falling Treasury yields provided significant tailwinds for consumer and housing equities such as Home Depot and Starbucks.
- Regulatory resistance toward data center construction in states like Texas and Ohio weigh…: Regulatory resistance toward data center construction in states like Texas and Ohio weighed heavily on hardware suppliers including AMD and Eaton.
- Megacap hyperscalers advanced as investors anticipated that a deceleration in capital exp…: Megacap hyperscalers advanced as investors anticipated that a deceleration in capital expenditures would help bolster corporate free cash flow.