CNBC’s Jim Cramer warned Thursday that market volatility caused by the Iran war is tempting panicked investors to dump their portfolios, and he cautioned against following the crowd and leaving the shelves.
“Remember, even if the current situation is scary, it makes sense to stick with the markets in almost every situation, if only because you have a better chance of recouping your losses once peace returns,” Kramer said on “Mad Money.” “Trust me, if you sell everything, you’ll be blaming yourself. Then you’ll have to watch this market recover without you.”
It’s difficult to suppress emotions. S&P500 and Nasdaq They decreased by approximately 1.5% and 1.8%, respectively. US crude oil prices Prices soared more than 9.5% and settled above $95 per barrel. With oil prices having an adverse effect on stock prices, it’s no wonder that Iran’s new supreme leader, Mojtaba Khamenei, said the Strait of Hormuz would remain closed as a “means to put pressure on the enemy,” causing oil prices to soar. The soaring price of Brent crude oil, the international benchmark, has settled above $100 for the first time since 2022.
If investors decide to exit the market completely on such a decline, it will be difficult to time the return to lows. “It would be great if we could sell everything right now, today, avoid the pain we are likely to experience in the coming days, and get back on the market the day before the war ends,” Kramer said. “That would be the ideal, but we don’t know when the war will end.”
One comfort in this sea of negativity is that President Donald Trump doesn’t want a bear market in stocks, Cramer said. Historically, presidents have viewed the stock market as a barometer of success. It’s tough to see the S&P 500 index decline for the third time in a row, but the index is only 4.7% off its most recent high. This is not even a correction, which is defined as a decline of at least 10% from the high. A bear market is a 20% decline.
This means the Trump administration may be more inclined to resolve disputes sooner to prevent a long-term decline in stock prices. Cramer pointed to the drop in stocks after President Trump announced on “Emancipation Day” that he would impose huge tariffs on major U.S. trading partners in April 2025. When the White House suspended many of these tariffs just a week later, stocks quickly rebounded.
“Trump’s pattern is very clear in this presidency. He’s prepared to make tough choices that could bring markets down, but he’s also prepared to change plans if he gets hit too hard,” Cramer added. “That means a deal could be done.”
Cramer said it’s unclear what a deal to end the Iran war would look like, and speculated that a potential back channel through Qatar could give Trump an opportunity to claim victory. “I’m not a military strategist. I’m an equity strategist. And what I know is that sooner or later this war will end,” Kramer said. “If you didn’t own the stock before the ceasefire, you’ll probably lose money.”
