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Wall Street’s wild ride continued Wednesday, as stocks tried to mount another morning rally and then it fizzled. If the past two sessions are any indications, it’s hard to say what the next hour or day has in store. Our general view on stocks has not changed, even as President Donald Trump ‘s cumulative 104% tariff rate on Chinese imports — plus elevated duties on other major trading partners — went into effect at midnight. We’re not panicking and sprinting for the exits, but we’re also not pounding the table and deploying all our cash here. “I am not saying that this day is the day that we turn” around in the market, Jim Cramer said during Wednesday’s Morning Meeting. However, Jim said, “Let’s say you wanted to sell CrowdStrike right here because you think it’s too high … I think that’s ill-advised.” We made a purchase Tuesday afternoon of Capital One , which came only after the market rolled over from its morning surge. It also came after a few days of patiently observing the market ignore a big piece of good news in the company’s pursuit to close its Discover acquisition. Therein lies a helpful piece of advice for investors trying to figure out when, exactly, is the right time to put money to work in this market. For Club members in that camp, here are some considerations and strategies to consider in these uncertain and evolving times. 1. Look past the price action Wall Street got off to a hot — though rather head-scratching — start to Tuesday’s session, with the S & P 500 at one point surging over 4%, only to eventually finish the day down 1.6%. The relief rally was initially pinned on some combination of an oversold bounce and optimism that the U.S. would hammer out deals with trading partners to lower tariffs. There were certainly headlines to support the latter viewpoint, such as Trump saying he had a “great call” with South Korea’s acting leader. But had the facts on the ground changed all that much compared with the prior few days to support a 4% surge in the S & P 500? Not really. If anything, China’s latest tough talk — a vow to “fight to the end” late Monday night — reinforced the notion that tensions between the world’s two largest economies haven’t eased one bit. On Wednesday morning, we learned China intends to up its retaliatory tariffs on U.S. imports to 84%, and we also heard from the European Union on its planned response. .SPX YTD mountain The S & P 500’s year-to-date stock performance. “I think that because we finished [Monday] well off the lows of the day, it was like someone said, ‘Hey, the coast is clear,'” Jim explained Tuesday night. “But the coast is based on facts, and right now the facts, well, they’re just not so hot.” The lesson here is that investors should not take their cues from the price action in these volatile periods, which are prone to sharp swings, as we’ve seen on Monday, Tuesday and now Wednesday. Looking only at what a stock is doing on the screen is how you’ll buy up 4% — filled with fear of missing out on what could be an emergent rally — and then end up selling down almost 2% just a few hours later, this time filled with fear after the White House confirmed the massive tariff rate on China is going into effect in a few hours. Instead, it is important to focus on what we know with high degrees of confidence. And right now, one of those things we know for sure is that, without more clarity on where these tariffs will end up, we cannot forecast what our companies will earn this year. That makes it hard to want to aggressively deploy cash, absent a material change in what we know. Sure, the market has already fallen a lot since Trump announced his steep, country-specific tariffs last Wednesday night. But we cannot focus only on whether the market has come down “enough,” and then decide to turn bullish. It could still far further if there’s more bad news on the tariff front. 2. Wide scales get wider No matter the kind of market, we always preach the importance of making sure every buy counts — in other words, don’t keep buying at the same price and instead try to lower your cost basis with each successive purchase; if you still believe in a stock’s long-term outlook, it’s a good thing to be able to scale into the position at better prices. It becomes even more important to stagger buys in bumpy markets, which we call the “wide scales” approach. If we generally like to buy a stock down between 3% and 5% from our last purchase, we want to space them out even further in these volatile moments — perhaps in the 7% to 10% range. Consider that when we added to Capital One on Tuesday, the stock was down nearly 10% from where we most recently bought more shares on March 14. The reason to make your wide scales even wider is because we are seeing much more dramatic swings right now. We need to accept that there can be some irrational action that leads to big moves, both up and down, and adjust our buying strategies accordingly. 3. Think holistically As we wrote earlier this week , estimates on what a company might generate in revenue and profits are difficult to rely on when so much is in flux. For that reason, in trying to determine which stocks may be worth nibbling on, taking a more holistic and qualitative view can help cut through the noise. Some hard-hit stocks are in the blast zone, such as Club name Apple , and other beaten-up names are better described as collateral damage to the trade wars and recession fears. Focusing on the collaterally damaged stocks, especially if you have a longer-term horizon, makes the most sense at this stage. Now refining that focus even further, which companies are benefiting from trends that are too powerful to be derailed by the current forces driving the market down? Cybersecurity checks that box. CrowdStrike and Palo Alto Networks , the two cybersecurity companies in our portfolio, are both down around 12% since Trump’s tariff announcement a week ago through Tuesday’s close — roughly in line with the S & P 500 in that stretch. And yet, nothing about this current moment suggests the cybersecurity theme has gone out the window, and we’d even argue the rise in global tensions increases the importance of companies spending on digital threat protection. Of course, the broader enterprise software complex is vulnerable to an economic slowdown as companies tighten their belts, and so it’s possible cybersecurity providers could also see some deals take longer to close in the short run. Plus, price-to-earnings multiples are coming down across the entire market due to all the uncertainty. The higher the P/E multiple on a stock, the more room there is to fall. But when we emerge from this period, whenever that is, it’s difficult to foresee a weaker market for cybersecurity. This does not necessarily mean jump in and buy right now — but it means, at some point, there probably will be a time to do that. Another way of thinking about this is you’re looking for companies that you could easily explain to someone who doesn’t follow the stock market why you would want to own for the next three to five years. Extending this line of thinking to additional corners of the portfolio, some of our financials are getting swept up in the selling but appear poised to come out on the other side in a strong position, without their business models being completely disrupted. Consider Wells Fargo , which has understandably been dinged by recession fears because banks are economically sensitive. But, as we explained Tuesday, there’s a case to be made that the bank’s asset cap could be a blessing in disguise in a potential downturn. Plus, the bank may soon get that asset cap removed, improving its ability to capitalize on an improving economy down the road. Capital One also is in this camp, with its recent declines being tied to economic concerns. The stock could see more pain if the U.S. economy were to enter a recession, but we’re strong believers that the pending acquisition of Discover will transform the company and deliver significant earnings growth. It’s too difficult to say whether that upside will be realized this year, but peering out further onto the horizon, we still believe in the thesis. That’s why, when combined with the wide-scales approach, we had the conviction to buy additional shares Tuesday. In the world of technology, let’s explore the case for Meta Platforms , which closed Tuesday down more than 30% from its February highs. Yes, the Instagram parent has some secondary exposure to China by way of Asian e-commerce sites like Temu that could pull back major digital ad spending as a result of Trump closing loopholes that helped their U.S. business. More generally, advertising spending tends to decline during recessions, so investors have concerns about Meta here, too. It’s fair to worry about the near-term impact both variables could have on its business, even if we tend to think spending on Meta’s platforms will be relatively more resilient than the industry because its AI-enabled targeting tools enable strong return on investment. The main point: The trade war has not fundamentally disrupted Meta’s business model, and its scale and strong balance sheet work in its favor in uncertain times. The may stock not be done falling, but we don’t see the sky falling on Meta as a company when we look out multiple years. Bottom line Investors who want to put money to work in this market should consider whether (1) they’re just following the price action to the upside — or if there’s been a change in what we know that supports the move. And (2) be sure to make every buy count, using wider-than-normal increments when staggering your purchases to ensure you’re lowering your cost basis. And finally, (3) zoom out and consider a more holistic view when deciding which stocks you might want to circle the wagons around. Look for stocks outside the blast zone that have compelling reasons to own them beyond the next few weeks or months, which remain shrouded in uncertainty. It can be difficult to keep a level head in a brutal down market, but that’s what is required to go through to the other side. (Jim Cramer’s Charitable Trust is long COF, WFC, META, AAPL, CRWD and PANW. See here for a full list of the stocks.) 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.
Traders work on the floor at the New York Stock Exchange in New York City, U.S., April 8, 2025.
Brendan McDermid | Reuters
Wall Street’s wild ride continued Wednesday, as stocks tried to mount another morning rally and then it fizzled. If the past two sessions are any indications, it’s hard to say what the next hour or day has in store.
