Not all tech is under fire in Monday's selling, while investors seek refuge in defensive stocks

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 moved lower due to AI safety concerns Monday but rebounded from their worst levels of the session. One reason for the intraday bounce could be the action in the bond market. Stocks were trading near their lowest levels of the session as the 10-year Treasury yield topped 5% — a key psychological level and one that has not been breached since October 2023. But then buyers of that attractive 5% yield came in, pushing Treasury prices up and yields down, per their inverse relationship. That ignited a recovery in the broader stock market, which brought the S & P 500 and Nasdaq up towards the flat line. Oil prices paring their Monday gains also took some pressure off stocks. However, the U.S. oil benchmark, West Texas Intermediate crude , still settled above $100 per barrel on the day. So, in the run-up to the Federal Reserve's two-day September meeting on Tuesday and Wednesday, inflation worries persisted, and market odds for an interest rate hike were over 92%, according to the CME FedWatch tool. AI infrastructure stocks led the market lower on the uncertainty created by Anthropic CEO Dario Amodei's weekend essay calling for an industry-wide slowdown in the advancement of new AI models. We did nibble on some Micron shares in the afternoon as the AI trade stabilized. One thing to keep in mind with all the swirling headlines is that the AI buildout has been supply constrained. Even if new guardrails against AI model advancement are put in place, a temporary slowdown could allow the supply chain to catch up to demand. Hyperscalers and cybersecurity were winners . Meta Platforms , Alphabet , and Microsoft were rallying on the view that a slower AI buildout could reduce the need to keep raising capital expenditure expectations. Lower capex would give cash flow more time to catch up and reduce the need to repeatedly tap the debt markets to fund AI investments. We're not sure whether hyperscalers would actually cut capex, but that's the possibility the market was pricing in on Monday. Amazon would probably be rallying, too, if it didn't have such a large retail component to its business. CrowdStrike and Palo Alto Networks were our biggest winners Monday, up around 14% each, on the thought that worries about AI safety only reinforce what we've been saying all along — AI advances increase the need for cybersecurity. CrowdStrike CEO George Kurtz joins Jim Cramer later on a special "Mad Money" from San Fransciso. Outside technology, the market rotated into traditional defensive stocks that are less tied to the broader economy and the data center buildout. Those include names like Johnson & Johnson and Eli Lilly in pharma and Kimberly-Clark and Costco in consumer staples. These defensive companies are better positioned to hit their numbers if a Fed rate hike slows the economy than the high-flyers in tech, which is why we like them from a diversification standpoint. Dave & Buster's leads after-the-bell earnings . There are no major quarterly reports before the opening bell on Tuesday. There are no major economic releases on Tuesday, either, as the Fed kicks off the first day of its policy meeting. (See here for a full list of the stocks in Jim Cramer's Charitable Trust, including META, GOOGL, MSFT, AMZN, CRWD, PANW, JNJ, LLY, KMB, COST.) 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.