CNBC’s Jim Cramer said Monday that Wall Street managed to halt a steep decline as the market’s three biggest concerns eased during trading.
of S&P500 It fell 0.48% after dropping as much as 0.8%. of Nasdaq Composite was down 0.56% after falling 1.3%. Dow Jones Industrial Average After dropping nearly 300 points at the low, it fell 152 points, or 0.29%.
“At one point this morning, we just about crashed,” the “Mad Money” host said.
To be sure, there has been a lot of pain behind the scenes, especially among stocks tied to AI data center ramp-ups. human CEO Dario Amodei’s essay over the weekend, in which he implored the industry to slow down model development, shocked the industry. intel and micron Each fell about 5%, GE Vernova down nearly 9%, Eaton You’re losing about 8%. Cramer’s Charitable Trust, a portfolio managed by CNBC’s investment club, owns shares in Intel, Micron, GE Vernova, and Eaton.
But Cramer pointed to three developments that helped the index recover from its lows. A sharp reversal in oil prices, buyers appearing in the U.S. Treasury market when the 10-year Treasury yield hit 5%, and fears that AI slowdowns would derail data center construction have allayed.
Oil, which has been a thorny issue for stock markets in recent weeks, provided the first relief on Monday. west texas intermediate Oil prices rose about 4% to $102 a barrel after Saudi Arabia shut down a vital pipeline that bypasses the Strait of Hormuz, but gave back much of that gain to just over 1%.
The bond market also stabilized. of 10 year treasury Yields rose to 5%, the highest level since October 2023, but Cramer said that level was finally attracting buyers after weeks of rising rates.
“Something happened that was missing throughout the bond run: buyers, real buyers, came in and decided that 5% was a good yield,” Cramer said. “Yes, not everyone hates bonds at any cost.”
The third shift occurred in AI. Amodei’s essay initially raised concerns that slowing the development of increasingly powerful models could also slow the flow of huge amounts of money into the infrastructure needed to support them, hurting the business of chipmakers and industries alike.
“Most importantly, the biggest theme of our time, artificial intelligence, appeared to be in jeopardy due to a self-induced mode of slowdown,” Kramer said. “It could snap the biggest cash spigot in history.”
But by the end of the session, Cramer wasn’t too concerned about how the push to improve AI safety would significantly change how data centers are built. “We’ve done our best to force the big players to slow down the AI, so open AI “We decided that this is not the end of the world. In fact, we left this session confident that very little will change in the data center world,” said Kramer.
