Cybersecurity stocks surge thanks to IBM, and Nvidia climbs on more good China news
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 are higher on Tuesday, with the S & P 500 recovering about half of Monday’s losses. A much cooler-than-anticipated June consumer price index (CPI) report helped turn around the market futures, as traders backed off rate-hike expectations for the Federal Reserve’s late July policy meeting. But oil continued its rally, with U.S. oil benchmark WTI crude briefly topping $80 a barrel. The advance came even as President Donald Trump said the 20% reimbursement fee that he planned to impose on cargo shipments through the Strait of Hormuz will be replaced with investment deals with the Gulf states. IBM’s weaker-than-expected preliminary second-quarter earnings is a major market story, and the company’s reasons for the shortfall is impacting several corners of Tuesday’s market. IBM CEO Arvind Krishna said customer buying patterns were impacted by clients shifting spending toward tech hardware like servers, storage and memory ahead of indicated price increases. Krishna added that clients were “distracted” with cybersecurity concerns. His comments reflect a new reality for enterprise IT budgets: More dollars are being allocated to cybersecurity defense, hardware, and, most likely, AI computing tokens as companies experiment on ways to improve efficiency and create new tools. This leaves less money to spend on software and other categories. What IBM said explains why cybersecurity stocks like Club names CrowdStrike and Palo Alto Networks are among the best performers in the S & P 500, along with Dell , Micron and others in the storage and memory food chain. Healthcare is the worst-performing sector. HCA Healthcare is leading the group lower after the company announced preliminary second-quarter results and cut its full-year earnings per share outlook. The hospital operator said it experienced an increase in uninsured volumes from patients who lost coverage from health insurance exchanges. HCA’s profit warning included weaker-than-expected surgical volumes in the second quarter, pressuring shares across the medical device sector. We’ll see Wednesday whether Club name Johnson & Johnson’s medical device business experienced a similar trend. Medical devices account for about 36% of the J & J’s total revenue. However, that share will shrink once the company completes the separation of its orthopaedics business. The separation was announced in October 2025 with a targeted timeline of 18 to 24 months. Shares of Club name Nvidia are up 4% on signs the company may have gotten its foot back in the door to China’s AI market. Jeffrey Kessler, the under secretary of commerce for industry and security, said Tuesday that a “trivial” number of Nvidia’s H200 chips have shipped to China. We don’t want to get too ahead of ourselves until we see Nvidia come out and say it has begun collecting revenue from China, considering we’ve seen plenty of head fakes here. Nevertheless, Kessler’s comments, issued at a congressional hearing, mark the second encouraging sign in the past two weeks that Nvidia may have regained access to the sizable Chinese AI market. Last Wednesday, we highlighted a report by The Information that said China plans to let several AI companies buy a limited amount of H200 chips. Trump said in December 2025 that Nvidia could sell the chips to “approved customers,” in exchange for a 25% cut of revenue. Boeing announced Tuesday it delivered 171 jets in the second quarter, marking its best first half of the year since 2018 . The company delivered 64 jets in June, an improvement from 60 in May. Last week, the company brought online its fourth 737 MAX assembly line at its Everett, Washington, factory. While production will take time to ramp, the expansion is a key milestone in Boeing’s plan to increase output from 42 jets per month to 47, and then to 52 per month next year. Producing more plans and increasing deliveries is essential to Boeing improving its annual free cash flow. Looking ahead, we expect to see Boeing score several jet orders at the Farnborough International Airshow in England next week. This is a major industry event, held in alternating years with the Paris Air Show. There are no major earnings after the closing bell. Before the opening bell on Wednesday, we’ll see earnings from Johnson & Johnson, Dutch chip-equipment maker ASML , BlackRock , Slim Jim owner Conagra Brands , Morgan Stanley , uniform supplier Cintas , super regional bank PNC Financial , and BNY . On the data side, we’ll see the wholesale producer price index (PPI) report, and the market will be hoping to see another cool print after Tuesday’s CPI. 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