As AI-related stocks dive, the market's winners have one thing in common

An important development from the financial markets: 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 falling hard on Friday , likely putting an end to the S & P 500 's 9-week win streak. After driving the market's gains for the past several months, technology and AI infrastructure stocks sold off sharply, sending the Nasdaq down about 3% and marking its worst day since October.

The AI trade started to wobble on Thursday after Broadcom failed to raise its 2026 and 2027 AI semiconductor revenue outlook. (We still think the company is being conservative. ) The S & P 500 declined by about 2% on Friday, as weakness in the tech sector (which accounts for almost 40% of the index excluding Amazon , Alphabet , Meta Platforms , and Tesla ) was partially offset by solid gains in staples, health care, real estate, and utilities.

Economic Details

One common theme among the market's winners: their sectors are least tied to the broader economy. It is a little counterintuitive because interest rates surged following the stronger-than-expected May jobs report . Perhaps it was monetary policy expectations that triggered the rotation, because with the labor market in good shape, traders now see higher odds of a rate hike by December than simply leaving the range unchanged at 3.

Higher interest rates can slow economic activity, and defensive stocks tend to outperform in that environment because their earnings are generally less sensitive to the economic cycle. That helps explain why Procter & Gamble was one of the portfolio's biggest gainers on Friday, up more than 4%. There are a lot of key events on tap for next week.

Club holding Honeywell hosts a 2026 guidance update for its Honeywell Aerospace division, which will become a separate, publicly traded company on June 29, followed by an investor day on Thursday for the remaining business, which will operate as Honeywell Technologies and continue to trade on Nasdaq under the ticker HON. Also on Monday is Apple's annual Worldwide Developers Conference, and we expect the iPhone maker to announce a new, souped-up, Gemini-powered version of its Siri personal assistant. Finally, on Friday, SpaceX will go public in what will be the largest IPO in history.

Analyst Views

In terms of earnings, JM Smucker and Casey's General Stores report Tuesday, Chewy and Oracle report Wednesday, and Adobe and Lennar report Thursday. On the economic front, inflation will take center stage next week with the release of the consumer price index on Wednesday and the producer price index on Thursday. We'll also get the New York Fed's one-year inflation expectations reading on Monday, while the University of Michigan Consumer Sentiment survey will round out the week on Friday.

(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.

Financial markets are tracking the development closely as investors assess the likely impact.