Wall Street slumps as rates climb, and more negativity on the iPhone 16 emerges

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. Markets: The major U.S. stock averages took a hit Wednesday, led to the downside by the tech-heavy Nasdaq Composite . The S & P 500 is lower almost across the board, with only the real estate and utilities sectors in positive territory. Technology is the big underperformer amid pullbacks across semiconductor and software stocks, while consumer discretionary is close behind. Earlier Wednesday, we a dded to our position in chipmaker Advanced Micro Devices into the weakness. Some of the market pullback could be tied to profit-taking considering we're coming off a six-week win streak in the S & P 500. But investors are also closely watching the rise in Treasury yields, with the yield on the benchmark 10-year note crossing 4.25% in Wednesday's session. The bond market pressured stocks in Tuesday's session, as well. Eyes on Apple : Apple shares took a spill shortly before noon ET after an influential analyst published a negative story about iPhone 16 orders. According to an online post by Ming-Chi Kuo , an analyst at TF International Securities, Apple cut its iPhone 16 orders by about 10 million units for the fourth quarter of 2024 through first half of 2025. Kuo said the change mostly affected non-Pro models. Kuo now estimates iPhone 16 production for the second half of the year to be 84 million units, down from about 88 million previously. Apple is scheduled to report its fiscal 2024 fourth-quarter results on Oct. 31. "Some market participants are optimistic that Apple Intelligence could dramatically boost iPhone shipments soon. However, Apple's recent order cuts suggest this optimistic expectation may not materialize in the short term," Kuo wrote in the post. "I believe that Apple is best positioned to succeed in on-device AI, and I am confident about the long-term potential for Apple Intelligence to become a popular paid service," the analyst wrote. "However, significant growth in iPhone shipments will likely require further hardware innovation to accompany this AI development." We understand the negative market reaction to this report, given the stock is essentially trading at record highs. But it doesn't change our long-term thesis about Apple and the positive role that artificial intelligence features known as Apple Intelligence can have in driving device upgrades in the years ahead. As we've been saying, it's way too early to judge the strength of the iPhone 16 cycle because the main reason to upgrade – Apple Intelligence – has not been made available yet. For this reason, it may be a longer, but stronger upgrade cycle. Some good news is that certain Apple Intelligence features will be made available in next week's launch of iOS 18.1, the latest iPhone software operating system. But even so, this new rollout won't include many of the exciting features Apple unveiled at its annual developer's conference in June . Some of those highly anticipated features, such as Genmoji and integration with OpenAI's ChatGPT, will be included in iOS18.2. These features went into beta testing Wednesday and could take a number of weeks before they are made available to the general public. Not included in this second round is the souped-up version of personal assistant Siri. So, before we discredit Apple Intelligence and the upgrade cycle that may lie ahead, why not wait to see the response when the sought-after features go live? This long-term view on Apple has served us exceptionally well over the years, and we don't expect that to change this time around. Up next: There's a busy slate of earnings after the bell Wednesday, including Tesla , Lam Research , IBM , ServiceNow , Las Vegas Sands , T-Mobile , Whirlpool and many others. On Thursday, we'll see earnings from Club industrial names Dover and Honeywell as well as American Airlines , Southwest Airlines , United Parcel Service , Carrier , and Union Pacific . On the data side, we'll see S & P Global's purchasing managers index (PMI) at 9:45 a.m. ET. (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.

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.