Wall Street’s start to a record week ran into two well-known sources of volatility: artificial intelligence trading and oil. The Dow Jones Industrial Average closed above 53,000 for the first time in history on Monday, but renewed tensions between the U.S. and Iran erased those gains, sending the blue-chip index down 0.5% for the week. Chip stocks, once the hottest on the market, soared as investors continued to question whether AI trading was being overextended. Still, the tech-heavy Nasdaq rose 1.74% for the week, while the S&P 500 index rose 1.23%. Both indexes have finished higher in four of the past five weeks. Let’s take a closer look at what moved the market last week. Semiconductor stocks excite investors Semiconductor stocks remained at the center of market trends. The group started the week strong, with the VanEck Semiconductor ETF up about 2% on Monday as investors bought back some of the year’s biggest winners in the first half of the year. However, Tuesday’s gains quickly subsided as Samsung’s results failed to impress investors and Reuters reported that China’s Deep Seek was developing its own AI chips. Samsung’s rival, Idaho-based Micron, fell 4.7%, and the VanEck Semiconductor ETF also fell nearly 4%. Semiconductor trade stabilized on Wednesday after Apple announced it would expand its long-standing partnership with Broadcom in a multi-year deal expected to exceed $30 billion. Apple has traditionally relied on Broadcom for connectivity chips to connect its devices to cellular, WiFi and Bluetooth networks. The new deal calls for the production of more than 15 billion U.S.-made chips and includes a $1.5 billion expansion of Broadcom’s manufacturing facility in Fort Collins, Colorado. Broadcom shares rose nearly 5% on Wednesday’s news. This was the second Apple-Broadcom headline this week. Broadcom said in a securities filing Monday that it has agreed to supply Apple with “a suite of custom ASIC silicon products for use in multiple generations of Apple products.” ASIC stands for application-specific integrated circuit, and Broadcom is working on specialized AI server chips for Apple’s data centers, according to a joint report with Bloomberg News. This is similar to Broadcom and Google’s co-design relationship for their internal tensor processing units (TPUs). Broadcom was the second best performer last week, up 10%. Amid the volatility, we took advantage of Wednesday’s rally in AI and semiconductor stocks to exit our remaining position in Arm Holdings, locking in a profit of about 69% on the shares we purchased in April. While we don’t think the AI build-up is nearing its peak, trading has become more volatile in recent weeks and we didn’t want to risk returning big gains in a volatile stock. We also wanted to reduce overlap in CPU Renaissance themes and portfolios provided by recent Intel acquisitions. We’ll continue to follow Arm out of the bullpen and could see renewed interest at a more attractive valuation. We still like Intel, and portfolio director Jeff Marks said Friday that he would have bought more of the stock were it not for trading restrictions. Chip stocks continued to rise on Thursday, re-emerging as some of the market’s best-performing stocks. The VanEck Semiconductor ETF rose 2.5%, led by Micron’s 4.5% gain and Sandisk’s 7.6% gain. However, activity within the group was somewhat subdued on Friday as investors focused on SK Hynix’s long-awaited US market debut. Jim Cramer warned that SK Hynix’s debut could cause investors to sell other semiconductor stocks to secure funding for new products. The South Korean memory leader, which soared this year due to strong demand for AI-related memory, opened at $170, about 14% above its public price of $149. There was one bright spot in Friday’s chip trends. NVIDIA rose 4% to close at $210.96, its highest price in nearly a month. Meta Begins to Show Its AI Hands Meta Platforms spent the week trying to answer the biggest question hanging over the company’s stock: How will the company turn its huge AI investment into meaningful returns? By the end of Friday, the market was enthusiastic. The Facebook and Instagram parent company laid the groundwork on July 1, confirming that it is preparing to launch a cloud business that will sell excess computing power to external customers. The move puts the company in competition with Amazon Web Services, Microsoft Azure, Alphabet’s Google Cloud, and smaller so-called neoclouds such as CoreWeave and Elon Musk’s SpaceX. Jim had been pushing for Meta to launch a cloud business, correctly predicting that the company’s struggling stock would soar in response. Last week, Meta provided further evidence of how it plans to monetize its computing investments. On Tuesday, the company announced Muse Image, an AI image generation model aimed at attracting creators and advertisers. The technology powers new tools through Meta’s Advantage Plus advertising platform, allowing brands to more easily develop ad creative for marketing campaigns and automate certain tasks. And on Thursday, Meta announced Muse Spark 1.1. It is being called “the most powerful model ever for coding and agent AI tasks.” The company announced it would charge developers for access to its technology, a notable change for a company that has traditionally focused on providing its AI models through open source releases. The move puts Meta in more direct competition with OpenAI’s Codex and Anthropic’s Claude Code. Meta is rapidly expanding the infrastructure needed to support these ambitions. Reuters reported on Thursday that the company plans to start manufacturing custom AI chips in September, with the aim of doubling its computing power next year. The chip, co-designed with Broadcom and manufactured by Taiwan Semiconductor Manufacturing Co., could help Meta reduce massive computing costs and dependence on Nvidia and AMD. The meta saved the best until last, rising 6% in Friday trading. The move was prompted in part by CEO Mark Zuckerberg’s comments in an interview with Bloomberg News. “The offers you get for computing usage are so high that in some cases it might make sense to rent or consider that kind of deal instead of using it in-house,” Zuckerberg told Bloomberg. Meta’s stock opened lower on Monday before buyers stepped in, which foreshadowed the rest of the week. The stock closed in the green in every session except Wednesday. Meta rose 15% for the week, making it the best-performing stock in the club. Oil threatens to derail market rally… again Last week, the Iran war was back on Wall Street’s radar, highlighting the fragility of the interim peace agreement between Washington and Tehran. Oil prices soared on Tuesday after Iran attacked a Qatari liquefied natural gas tanker near the Strait of Hormuz, renewing concerns about disruption in one of the world’s most vital energy shipping routes. Pressure intensified Wednesday after President Donald Trump said the ceasefire with Iran was “over” and the U.S. military continued to strike 90 Iranian military targets, including air defense systems. Energy stocks including ConocoPhillips, Chevron and Marathon Petroleum rebounded Tuesday as WTI oil prices rose to $76 a barrel, but companies exposed to rising fuel costs are under pressure. The club, which owns Honeywell Aerospace, was the worst-performing stock this week as investors worried that rising oil prices and renewed conflict in the Middle East could reduce demand for aviation. This is especially important because aerospace suppliers derive a significant portion of their profits from aftermarket service and maintenance, and business tends to slow when airlines fly fewer miles. Honeywell Aerospace’s recent strong performance after its spin-off in June likely also encouraged profit-taking. HONA position added on Tuesday. Rising oil prices have reignited inflation concerns, pushing the 10-year US Treasury yield to its highest level since May. With oil prices plummeting in recent weeks, markets have increasingly downplayed the possibility that the U.S. Federal Reserve will cut interest rates multiple times this year. However, a sustained recovery in oil prices, and thus energy-driven inflation, could put this situation back on the table. Rising bond yields hurt the stock price of our Home Depot holding club as a vehicle for the eventual recovery of the U.S. housing market. For now, rising borrowing costs continue to weigh on the housing market, slowing the recovery in home improvement spending that benefits the company. DuPont was also late to the market as investors weighed the impact of rising energy prices and renewed tensions in the Middle East on input costs and operations in the region. DuPont’s water division does a lot of business in the Middle East. By Friday, oil prices had fallen, easing some pressure after President Trump said he wanted a deal from Iran and the two countries would continue talks. (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. 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