CNBC’s Jim Cramer said Monday’s stock market resilience in the face of the Iran war was because the Middle East no longer carries the economic weight it once did.
“The market simply didn’t care,” Kramer said on “Mad Money.” S&P500 The stock closed slightly higher on the first day of trading after the US and Israel attacked Iran over the weekend. At the lowest point in trading, the index was down 1.2%. “We rebounded significantly from that low” throughout the day, Kramer noted.
Kramer said U.S. energy independence has changed how investors react to geopolitical shocks. “We produce so much oil domestically that there is nothing[the world’s oil producers]can do to cut us off.” U.S. Oil Benchmark, west texas intermediate crude oilsoared more than 12.4% to Monday’s trading high. “Prices were not sustainable,” he added. WTI rose 6% to $71.23 a barrel in New York trading.
Wall Street’s geopolitical sentiment was cautious, but investors appeared willing to overlook other issues that roiled markets last week. Despite concerns about “AI platforms that can write code cheaper than humans and run it at high volumes,” Kramer said, “they didn’t seem to care about the pain in the software group at all.” The market also ignored sharp declines in private equity stocks, including: KKR, black stoneand apollo.
In short, geopolitical turmoil does not automatically lead to economic panic because the United States’ energy resources are “much more abundant than at any time in the last 50-plus years,” Cramer said.
For now, investors are opting for optimism.
