Wall Street’s record-setting start to the week ran into two familiar sources of volatility: the artificial intelligence trade and oil. The Dow Jones Industrial Average on Monday closed above 53,000 for the first time ever before renewed U.S.-Iran tensions erased those gains, leaving the blue-chip index down 0.5% for the week. Chip stocks — once the hottest corner of the market — also swung sharply as investors continued to question whether the AI trade had become overextended. Even so, the tech-heavy Nasdaq gained 1.74% for the week, while the S & P 500 rose 1.23%. Both indexes have finished higher in four of the past five weeks. Here’s a closer look at what drove the market last week. Chip stocks take investors for a wild ride Semiconductor stocks remained at the center of the market action. The group started the week strong, with the VanEck Semiconductor ETF rising about 2% on Monday as investors bought back into some of the biggest winners from the first half of the year. But the rally quickly faded Tuesday after Samsung’s results failed to impress investors and Reuters reported that China’s DeepSeek is developing its own AI chip. Micron , the Idaho-based rival to Samsung, fell 4.7%, while the VanEck Semiconductor ETF dropped almost 4%. The semiconductor trade stabilized Wednesday, helped by Apple’s announcement that it was expanding its longtime partnership with Broadcom in a multiyear deal expected to exceed $30 billion. Apple has historically tapped Broadcom for connectivity chips that help its devices connect to cellular, WiFi and Bluetooth networks. The new agreement calls for the production of more than 15 billion U.S.-made chips and includes a $1.5 billion expansion of Broadcom’s manufacturing facility in Fort Collins, Colorado. Broadcom shares climbed nearly 5% on the news Wednesday. It was the second Apple-Broadcom headline of the week. On Monday, Broadcom said in a securities filing that it agreed to supply Apple with “a range of custom ASIC silicon products for use in multiple generations of Apple products.” ASIC is short for application-specific integrated circuit — and that jibes with Bloomberg News has reported that Broadcom is working Apple on a specialized AI server chip for its data centers. That would be akin to Broadcom’s co-design relationship with Google on its in-house tensor processing units (TPUs). Broadcom was our second-best performer last week, up 10%. Amid the volatility, we used Wednesday’s rebound in AI and semiconductor stocks to exit our remaining position in Arm Holdings , locking in a gain of roughly 69% on shares purchased in April. While we don’t believe the AI buildout is nearing a peak, the trade has become shakier in recent weeks, and we didn’t want to risk giving back a fantastic gain in a stock prone to wild swings. We also wanted to reduce the portfolio’s overlap with the CPU renaissance theme, which our recent purchases of Intel provide. We’ll continue to follow Arm from the Bullpen and could become interested again at a more attractive valuation. We still like Intel, with portfolio director Jeff Marks noting Friday that we would’ve bought more shares if not for our trading restrictions. Chip stocks continued to roar higher Thursday, re-emerging as some of the market’s best performers. The VanEck Semiconductor ETF climbed 2.5%, led by a 4.5% jump in Micron and a 7.6% gain in Sandisk . However, Friday’s action in the group was somewhat muted as investors turned their attention to SK Hynix ‘s highly anticipated U.S. market debut . Jim Cramer has warned that SK Hynix’s debut could prompt investors to sell other chip stocks to free up capital for the new offering. The South Korean memory leader, which has soared this year on booming demand for AI-related memory, opened at $170 — roughly 14% above its $149 offering price. One bright spot in Friday’s chip action: Nvidia rose 4% to end the day at $210.96 share, its highest close in almost a month. Meta starts showing its AI hand Meta Platforms spent the week trying to answer the biggest question hanging over its stock : how will the company turn its massive AI investments into meaningful returns? By the end of Friday, the market had given a ringing endorsement . The Facebook and Instagram parent laid the groundwork on July 1 by confirming that it is preparing to launch a cloud business that would sell excess computing power to outside customers. The move would put the company in competition with Amazon Web Services, Microsoft Azure, and Alphabet’s Google Cloud, as well as smaller so-called neoclouds like CoreWeave and even Elon Musk’s SpaceX . Jim had been stepping up his calls for Meta to start a cloud business, correctly predicting the struggling stock would soar in response. Last week, Meta offered more evidence of how it plans to monetize its compute investments. On Tuesday, the company launched Muse Image , an AI image-generation model aimed at attracting creators and advertisers. The technology will power new tools through Meta’s Advantage Plus advertising platform, which lets brands more easily develop ad creative for their marketing campaigns and automate certain tasks. Then on Thursday, Meta unveiled Muse Spark 1.1 , which it called “its strongest model yet for coding and agentic AI tasks.” The company said it would charge developers to access the technology, which is a notable shift for the company that previously emphasized giving away its AI models through open-source releases. The move puts Meta in more direct competition with OpenAI’s Codex and Anthropic’s Claude Code. Meta is rapidly expanding the infrastructure needed to support those ambitions. Reuters reported Thursday that the company plans to begin manufacturing its custom AI chip in September as it looks to double its computing capacity next year. The chip, co-designed with Broadcom and manufactured by Taiwan Semiconductor Manufacturing Co ., could help Meta lower its massive computing costs and reduce its reliance on Nvidia and AMD . Meta saved its best for last, rising 6% in Friday’s session. CEO Mark Zuckerberg’s comments in a Bloomberg News interview were responsible for some of the move. “The offers that you get for using the compute are so high that it may make sense, in some cases, to rent out or consider those kind of deals instead of your own internal uses,” Zuckerberg told Bloomberg. Shares of Meta opened Monday lower, before the buyers stepped in — an harbinger of the rest of the week. The stock finished green in all but Wednesday’s session. For the week, Meta jumped 15%, making it the Club’s best-performing stock. Oil threatens to spoil the market rally … again The Iran war returned to Wall Street’s doorstep last week, illustrating the fragility of the interim peace agreement between Washington and Tehran. Crude prices jumped Tuesday after Iran attacked a Qatari liquefied natural gas tanker near the Strait of Hormuz, renewing concerns about disruptions in one of the world’s most important energy shipping routes. The pressure intensified Wednesday after President Donald Trump said the ceasefire with Iran was “over” and the U.S. military went on to strike 90 Iranian military targets , including air defense systems. Energy stocks — including ConocoPhillips , Chevron , and Marathon Petroleum — rallied Tuesday as WTI crude climbed back to $76 a barrel, while companies exposed to higher fuel costs came under pressure. Club holding Honeywell Aerospace finished as our worst-performing stock of the week, as investors worried that higher oil prices and renewed fighting in the Middle East could dampen air travel demand. That’s particularly important because aerospace suppliers generate a significant portion of their profits from aftermarket services and maintenance — business that tends to slow when airlines fly fewer miles. Honeywell Aerospace’s recent outperformance following its June spinoff likely also invited some profit-taking. We added to our HONA position Tuesday. The jump in crude also rekindled inflation concerns, pushing the 10-year Treasury yield to its highest level since May. The steep decline in oil prices in recent weeks led the market to discount the prospect of multiple Federal Reserve rate cuts later this year. However, a sustained rebound in crude and, by extension, energy-driven inflation, could put that back on the table. The move up in bond yields hurt shares of Club holding Home Depot , which we own as a way to play an eventual rebound in the U.S. housing market. For now, elevated borrowing costs continue to pressure the housing market, delaying the recovery in home improvement spending that would benefit the company. DuPont also lagged as investors weighed the impact that higher energy prices and renewed Middle East tensions could have on its input costs and business in the region. DuPont’s water unit does a lot of business in the Middle East. By Friday, the pressure eased slightly as oil prices pulled back after Trump said Iran had called to make a deal and the two sides will continue talks . (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. 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The volatile AI trade marched higher, but oil kept Wall Street on edge last week