Profit-taking hits some momentum stocks, and a dark cloud lifts over DuPont

CNBC

6 days ago

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. Markets: Stocks were mixed for most of the session on Tuesday as second-quarter earnings season marched on. The S & P 500 turned slightly positive shortly after President Donald Trump said on Truth Social that the U.S. has reached a trade deal with the Philippines. As part of the agreement, the tariff rate on goods imported from the Philippines was reduced to 19% from 20% and U.S goods into the Philippines will not be subject to tariffs. Beyond the trade headlines, there's a counter-trend move happening underneath the surface that's taking some of the froth out, with profit-taking in many momentum growth stocks and buying of more value-oriented names. Called off: DuPont received positive news Tuesday after China's State Administration for Market Regulation said it suspended its antitrust investigation into DuPont China. The probe began in early April and was widely seen as retaliation for Trump's tariff escalation. When first announced, DuPont disclosed that the inquiry only concerned its Tyvek business, which generated $90 million in sales to China in 2024, representing less than 1% of the company's total sales. This is an immaterial amount, but it still caused the stock to sell-off sharply because the market was concerned about its broader implications. Specifically, the worry was that the investigation and China's retaliations would extend to DuPont's electronics business (now called Qnity), derailing the upcoming spinoff. But that's no longer the case, and it's a good thing to clear that overhang ahead of the breakup in November. DuPont has been a disappointment this year due to concerns about tariffs and its exposure to China, but shares have started to act better over the past few weeks. Tuesday's gains are putting it at its highest levels since March. The company has not announced when it will report its second-quarter earnings, but last Friday analysts at Deutsche Bank named it a "catalyst call" buy idea into the print. Up next: Club name Capital One Financial reports after the closing bell on Tuesday . We're expecting a noisy quarter due to the timing of the Discover deal, but we remain positive about the long term fundamentals. Its earnings report more generally will offer a look at the health of the U.S. consumer. Other companies reporting are Intuitive Surgical , SAP , Enphase Energy , Baker Hughes , Chubb , EQT Corporation , and Texas Instruments . Club name GE Vernova reports before the opening bell on Wednesday along with AT & T , Freeport-McMoRan , Thermo Fisher , Fiserv , Amphenol , Hasbro and Lamb Weston . (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber 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 trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.