CNBC’s Jim Cramer said investors shouldn’t jump in and buy stocks despite Monday’s market turnaround spurred by President Donald Trump’s remarks that the Iran war may be nearing an end.
President Trump told reporters in Miami during an evening press conference that the United States is “making significant progress toward achieving our military goals” in Iran. He repeated remarks he made to a CBS reporter earlier in the day, reversing the rise in the stock market and the fall in oil prices.
of S&P500 and heavy use of high technology Nasdaq Both had previously fallen as much as 1.5%, but closed up 0.83% and 1.38%, respectively. of Dow Jones Industrial Average It added 0.5% after dropping nearly 900 points at session lows. west texas intermediate Crude prices, the U.S. oil benchmark, fell about 6% in New York trading to just over $85 a barrel. WTI rose above $119 in overnight trading, its lowest level since 2022, when Russia invaded Ukraine.
“Despite the very bullish closing price…we may not be out of the woods yet. Look, it’s hard to end a war,” Kramer said on “Mad Money.” “But if you want the stock price to go up, you better hope it does.”
It is impossible for oil to return to normal as hostilities escalate in the Middle East. Oil prices have reversed the direction of stock prices since the weekend’s attack on Iran by the US and Israel.
Cramer said President Trump’s statements alone do not mean an end to the Iran conflict.
“Unfortunately, that is not a decision that the United States can make alone.” Instead, the “Mad Money” host listed four things that need to happen before the market returns to normal or “it’s not really safe to buy stocks.”
Cramer said both countries should stop attacking oil and desalination facilities, adding that if Israel attacked oil depots, Iran could retaliate against facilities owned by Saudi Arabia, Kuwait and the United Arab Emirates. “That would literally shut down production, leading to a significant increase in (oil) prices.”
Cramer said Iran also needs to accept that the Strait of Hormuz is free from attack, or the war will not end. “Think of it this way: The worst-case scenario for commerce has already happened. Places that touch 20% of our oil are shut down,” he added. “Our government can offer insurance, but as long as Iran targets oil tankers trying to cross the Strait, no one will take up that offer.”
Kramer said not only does the strait need to be reopened, but it needs to happen soon to avoid long-term damage to production.
Cramer concluded his list by arguing for an exit to the war that would allow President Trump to declare victory. He said it was enough for Iran to pledge that it had ended its nuclear ambitions.
Looking ahead, there are still many undecideds regarding the Iran war. That’s why Cramer advises investors to be cautious for now.
“We know the winners in this scenario, but we are wary of the losers. Given this environment, there could be more in the loser’s column if the Trump administration fails to leave Iran and oil prices continue to fall,” he added.
