CNBC’s Jim Cramer said oil markets may be signaling a war with Iran won’t cause long-term disruptions to global oil supplies, a dynamic that could push stocks beyond Wednesday’s gains.
“The oil market always seems to know everything,” Cramer said on “Mad Money,” pointing to the decline in major energy stocks as crude oil futures had their calmest session this week.
shares of exxon mobil It closed 1.3% lower on Wednesday. conocophilips down 2.4%, halliburton It’s down nearly 2%. Meanwhile, global oil benchmark Brent crude settled flat on the day after rising 6.7% and 4.7% on Monday and Tuesday, respectively. west texas intermediate crude oilby U.S. standards, it was only 0.1%. This came after rising 6.3% on Monday and 4.7% on Tuesday.
“If the Strait of Hormuz were to be closed for a really long time, Exxon, Conoco and Halliburton wouldn’t all be down 1 to 2 percent,” Cramer said, referring to the crucial shipping lane that carries most of the world’s oil exports.
Mr. Kramer wondered if the oil market was behaving in the same way it did during the Gulf War in January 1991, when Operation Desert Storm began. At the time, many expected the conflict to drag on and oil prices to continue rising. Instead, oil prices fell soon after the fighting began, as the US rapidly overtook Iraqi forces.
If the Iran war does not cause a sustained spike in oil prices, the likelihood of an oil-driven inflation spike that would negatively impact the economy and stock prices becomes much less likely. With this view taking root, major U.S. stock indexes rebounded on Wednesday. of Dow Jones Industrial Average 0.5% increase, S&P500 rose by 0.8%; Nasdaq It rose by 1.3%.
Cramer said some stocks under the index were trading Wednesday as if the war would end sooner than expected, citing more speculative stocks. He said he was also encouraged by trading in major tech stocks, including: Amazon and Nvidiaup 3.9% and 1.7%, respectively, on Wednesday.
Furthermore, he cloud strike Wednesday’s stock price suggests investors may be reevaluating some of their most bearish assumptions that artificial intelligence will disrupt widespread swathes of the software industry.
Many software stocks have tumbled recently as investors worry that AI agents from companies like Anthropic could replace traditional applications. But Kramer said the market may be starting to recognize the upper bound of the turmoil, as CrowdStrike received positive quarterly results last night.
“We may be seeing the limits of Anthropic’s ability to disrupt software companies,” he said, adding that the change in sentiment could lead to renewed interest in “buying blue-chip postwar stocks.”
Disclosure: Cramer’s Charitable Trust, a portfolio used by CNBC Investment Club, owns stock in NVDA, AMZN, and CRWD.
