Why oil prices matter so much to DuPont, and the big earnings report to watch tonight

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Why oil prices matter so much to Du Pont, and the big earnings report to watch tonight Published Tue, May 26 20262:30 PM EDTUpdated 33 Min Ago Jeff Marks@jeffmarkscnbc 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. The S & P 500 and Nasdaq are making new all-time highs Tuesday, but the market is trading off its best level of the session. Optimism that the U.S. and Iran could soon reach a peace deal that reopens the Strait of Hormuz is providing a boost, but there's still plenty of uncertainty on whether an agreement will be made. Still, U.S. oil benchmark WTI crude and bond yields are lower on the day — a positive for equities, despite crude rebounding a few dollars from its morning lows below $90 a barrel and the 10-year Treasury yield climbing back above 4.5%. As of this writing, the low of the session for the 10-year yield is 4.475%. The AI theme was a big driver of the market's gains, with tech and industrials the two top-performing sectors Tuesday. Leading the charge was memory chipmaker Micron , which soared 19% in reaction to a bullish note by analysts at UBS. The massive rally vaulted Micron's market capitalization over $1 trillion, the 13th publicly traded company in that camp. Shares of Micron have now tripled this year and are up over 800% in the past 12 months. DuPont was a notable non-AI gainer in our portfolio on hopes for an Iran deal, adding over 2% to roughly $49.25. Shares of the materials maker for water, healthcare, and diversified industrial markets traded above $50 earlier in the day when oil was down more. Dupont's relationship to oil has to do with costs. The Middle East conflict has driven up some of its input costs, specifically high-density polyethylene and styrene. Oil is a feedstock used to make ethylene, so higher oil prices drive up the cost of polyethylene. Keep in mind, DuPont said on its first-quarter earnings call that it has applied surcharges and price increases, which management thinks will fully offset higher input costs this year. The company's ability to counter higher costs was a big reason why the stock rallied 8% on earnings day. Nevertheless, it's always better not to have to use surcharges, and that's why the stock was outperforming on Tuesday. The recent cybersecurity rally will be put to the test when Zscaler reports after the closing bell. Zscaler isn't best of breed like Club names CrowdStrike and Palo Alto Networks , but its commentary will offer insights into whether companies are stepping up investments to thwart cyberattacks in the age of AI. We've been glad that CrowdStrike and Palo Alto have shed the "AI is eating software" overhang in recent weeks and set a series of record highs. On Tuesday, at least, their fates diverged, with CrowdStrike up almost 2% and Palo Alto pulling back modestly. Wednesday is a big day of retail and apparel earnings with Dick's Sporting Goods , Abercrombie & Fitch , Capri Holdings , and Bath & Body Works scheduled to report. (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.More In HomestretchArm shares extend weekly rally to almost 50%, and Starbucks pulls the plug on an AI projectJeff MarksHow Walmart's gas price warning shapes our retail outlook — plus, Honeywell's quantum connectionJeff MarksStocks rally and oil falls. Plus, the implications of Samsung averting a strikeJeff MarksRead MoreSubscribe to CNBC PROSubscribe to Investing ClubLicensing & ReprintsCNBC CouncilsJoin the CNBC PanelDigital ProductsNews ReleasesClosed CaptioningCorrectionsAbout CNBCInternshipsSite MapCareersHelpContactNews TipsGot a confidential news tip? We want to hear from you.

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