CNBC’s Jim Cramer warned investors that Monday’s stock market rebound, sparked by optimism about a possible end to the U.S.-Iranian war, may be short-lived.
Markets rebounded dramatically on Monday after President Trump said the United States would halt attacks on Iranian power plants and energy infrastructure. But the “Mad Money” host said the rally “reeks of fear” and will not continue unless the Iranian regime’s actions confirm President Trump’s claims.
of S&P500 and Nasdaq Composite On Monday, they rose 1.15% and 1.38%, respectively, on hopes that the Middle East conflict, which has led to soaring oil prices and growing fears of an economic recession, is coming to an end. brentShares in the international benchmark fell 10.9% after weeks of gains on concerns about supply disruptions in the energy-rich region.
“By the end of the day…the whole market smelled of fear. Fear from people who were underinvested and didn’t want the market to move without stocks,” Cramer said. “Fear that the shorts they spent a precious year on during March could disappear with a real peace deal.”
Cramer’s comments come as the Iran war enters its fourth week and the conflict has escalated in recent days following the president’s ultimatum. He threatened on Saturday to attack more Iranian energy facilities if the Strait of Hormuz was not reopened within 48 hours.
Cramer added that Monday’s rally will be difficult to sustain if Iran’s actions do not support President Trump’s statements. And so far, there are some conflicting signs as to what will happen next.
President Trump said Monday that the United States and Iran want a “deal” and that the two countries have had “productive dialogue” toward resolving the conflict. However, Iranian state media reported hours later refuting the president’s claims.
Cramer used the election as a metaphor for Monday’s volatile trading session. He described traders in various asset classes as “voters” betting on the outcome of the war. “The bulls have led the popular vote,” Cramer said, adding, “As long as Iran doesn’t do anything and don’t use missiles or drones, I expect a recount tomorrow.”
