Stocks gain on Iran ceasefire, plus 3 things that drove last week's market

The S & P 500 posted its best week since November, sparked by the United States and Iran agreeing to a temporary ceasefire. President Donald Trump announced a two-week pause in attacks on Iran late Tuesday, which sent equities soaring. The S & P 500 surged 2.5% on Wednesday, while the Nasdaq jumped 2.8%. The Dow had its best day since April 2025. “We have a barn burner, and it is, I’d say, pretty widespread,” Jim Cramer said of Wednesday’s market action. That session reminded us how important diversification is. If the Club had exited stocks that were hit by the overseas war, such as energy stocks, we would’ve missed out on the rally in economically sensitive names. Jim pointed to Home Depot , which jumped 5.5% Wednesday and gained 4.8% week to date. Although the market rally cooled on Friday, the S & P 500 still ended the week up 3.6% higher. The Dow and Nasdaq gained more than 3% and 4.7%, respectively. All three benchmarks posted their best weeks since November. The easing of tensions in the Middle East wasn’t the only thing driving stocks; here are three more factors that influenced the market. Inflation Wall Street received its first updated read on inflation since the war in Iran broke out on Feb. 28. Investors have worried about rising oil prices rippling through the U.S. economy. The consumer price index increased by a seasonally adjusted 0.9% in March, pushing the annual inflation rate to 3.3%, both in line with analysts’ estimates. The gain was driven by a 10.9% surge in energy costs. However, core prices, which exclude energy and food, came in better than feared, signaling that underlying inflation was held in check. The market is not in the clear yet, given the fragile state of the ceasefire. One wildcard for stocks: the peace talks scheduled this weekend between the U.S. and Iran in Pakistan. “I don’t think it’s being factored in enough,” he said during Friday’s Morning Meeting . Software sell-off The buy-hardware, sell-software trade came back in full force this week. Investors flocked to companies underpinning the data center and AI infrastructure buildout, while running from those they perceive as threatened by it. “If you’re in the software camp, you’re being treated as if you’re ready for the embalmer,” Jim said during “Mad Money” on Thursday. “If you are in the hardware and AI camp, you’re headed for the pantheon of greatness.” Stocks that have been “killing it” are semiconductor players, Jim said, pointing to Marvell Technology and Intel , which ended the week 20% and 23% higher, respectively. Corning, which makes optical fibers for AI data centers, gained 15.7%. On the other side of the trade was software. Salesforce fell for its fifth straight session on Friday, tumbling nearly 12% for the week. It was also the Club’s worst weekly performer. Adobe shed 7.2%. IGV software ETF , the benchmark software index, fell roughly 7%. Jim said its performance is an important gauge of Wall Street sentiment because “this ETF is the primary way that big institutions bet on or bet against software.” Cyber and other non-traditional software names in the fund are collateral damage. CrowdStrike and Palo Alto Networks fell 5% and 4.5%, respectively, week to date. Meta ramps up AI efforts More good news for the portfolio. Meta unveiled a new AI model on Wednesday, sending the stock on a tear. It’s called Muse Spark and is the first from the company’s new Muse series, developed by Meta Superintelligence Labs. Although Meta has leveraged AI to benefit its advertising business, it has lagged in building its own popular AI model. Llama’s debut wasn’t well-received. Now, the company is moving into a market dominated by Google Gemini, Anthropic’s Claude, and OpenAI’s ChatGPT. If Meta succeeds, Wall Street will feel more confident about its aggressive AI spending plans. Management previously forecast capital expenditures between $115 billion and $135 billion for fiscal year 2026, up from nearly $70 billion last year. Meta shares jumped 9.6% last week, buoyed in part by the broader market rally. (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.