SK Hynix, software downgrades and 3M earnings shape Tuesday’s market watch

Chip stocks were back in the driver’s seat Tuesday morning, and that matters because the same artificial-intelligence trade has been steering a large share of market mood. CNBC’s Jim Cramer pointed to a more than 6% premarket gain in New York-listed shares of South Korea’s SK Hynix, a memory-chip maker, as Nasdaq futures also moved sharply higher.

Cramer noted that Monday’s early Nasdaq Composite strength faded by the close, leaving the index flat. For everyday investors, that is the tension in this market: AI-linked names can lift the tape early, but follow-through has been uneven.

Tariffs add a policy risk

Cramer also highlighted new 50% tariffs from the Trump administration on some Canadian imports, including wine, hockey sticks and cement. The duties are set to take effect in 30 days, according to Cramer, while energy is excluded.

Tariffs are taxes on imported goods. Companies can absorb the cost, pass it to customers through higher prices, or split the difference, which can affect margins, inflation and investor expectations.

Software stocks get fresh analyst scrutiny

Morgan Stanley issued several calls on enterprise software stocks after Adam Wood became the firm’s lead analyst in the group, Cramer said. Enterprise software refers to tools sold mainly to businesses, rather than consumers.

Salesforce was cut to hold from buy, with Morgan Stanley citing concern that momentum from Agentforce will not arrive soon enough to offset weaker legacy products, according to Cramer. Adobe was lowered to sell from hold, with the firm pointing to execution risk tied to leadership and business-model changes. Intuit was moved to hold from buy, as Morgan Stanley said investors may need time to gain confidence in a renewed acceleration.

Microsoft remained a buy at Morgan Stanley. The firm said Azure, Microsoft’s cloud business, and Copilot, its AI assistant, are key stock drivers and could improve in ways that are “not well reflected by the market,” according to Cramer. He added that Microsoft is the second-worst performer this year among the Magnificent Seven mega-cap tech stocks, ahead of only Tesla, and that Microsoft reports earnings next week.

Earnings and analyst calls move single names

3M shares rose more than 5% in premarket trading after the industrial company beat Wall Street expectations on revenue and earnings, often called the top and bottom lines. Cramer said demand for some of 3M’s materials is benefiting from AI infrastructure spending, beyond its better-known consumer products such as Scotch tape and Post-it notes.

Wells Fargo raised its Amazon price target to $322 from $313, according to Cramer. A price target is an analyst’s estimate of where a stock could trade over a set period. The firm cited rising costs but said Amazon can pass costs through in cloud computing. Cramer said Amazon reports earnings next week and noted that investors have been asking whether an equity sale could follow the company’s bond offerings.

RBC Capital said Intel’s core business trends appear healthy, Cramer reported, while noting the stock trades at 69 times estimated earnings for the next 12 months. RBC analysts expect Intel to beat revenue expectations by 5% and raise guidance by 3% to 5% when it reports Thursday evening, according to Cramer.

Raymond James moved Ralph Lauren to hold from buy, with Cramer saying the firm has more confidence the retailer can exceed Wall Street’s fiscal 2027 expectations. He also noted that Telsey Advisory raised its price target on Ralph Lauren last week.

Susquehanna cut Live Nation to hold from buy after a 27% year-to-date rally, according to Cramer. The firm cited easing Justice Department antitrust concerns and optimism about the concert calendar, but said much of the positive news is already reflected in the share price.

Kraft Heinz reached a deal with Disney to supply ketchup, macaroni and cheese, and other products to Disney’s North American properties, The Wall Street Journal reported. In return, Kraft Heinz will be able to use Disney characters on products sold in stores, according to the Journal.

This story draws on original reporting from CNBC.