CNBC “Mad Money” host Jim Cramer has proposed three potential market shifts that could occur if the U.S.-Iran war comes to an end.
Cramer referred to Tuesday’s market activity as a “dry run” for what might transpire when the war eventually subsides. The S&P 500 and Nasdaq Composite ended 2.91% and 3.83% higher, respectively, following news suggesting a possible de-escalation in the Middle East.
He predicts three significant market shifts if the war concludes.
First, he foresees a drop in rates, marking a notable reversal for the 10-year Treasury since the war began. This is attributed to the realization of inflation risks stemming from the war, not just from heightened oil prices but also from the effect on ancillary products from the Gulf.
Second, Cramer expects a revival in growth stocks, as demonstrated by Tuesday’s gains in Nvidia (NASDAQ:NVDA) and Marvell Technology (NASDAQ:MRVL), which closed 5.9% and 12.8% higher, respectively. He suggests that as rates decline, investors can concentrate on the positive actions of high-growth companies without the distraction of Middle East conflict.
Marvell shares also rose after it announced a strategic AI partnership with Nvidia, integrating its technology into Nvidia's AI factory and AI-RAN ecosystem via NVLink Fusion to offer more flexible next-gen AI infrastructure.
Finally, Cramer anticipates a rally in big bank stocks, which have been affected by worries that the war would halt Wall Street dealmaking. He pointed to the 4.75% and 3.91% advances of Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), respectively, as potential beneficiaries of the war’s end.
Cramer Optimistic, Dimon Warns Volatility
Cramer’s comments came as the stock market climbed, and the oil price fell sharply on Tuesday after President Donald Trump indicated that the U.S. would exit the Iran war in two to three weeks, even if a deal is not reached. At the same time, reports suggested that Iran's President Masoud Pezeshkian indicated the country's readiness to halt hostilities, provided they receive guarantees from the U.S.
This aligns with Cramer’s earlier observation about falling oil prices being a positive market signal. He said investors are overlooking falling oil prices and the impact of the "Trump Put," while criticizing pessimists who believe oil will stay high and drag the global economy down.
However, JPMorgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon said markets would stay volatile until the Iran conflict ends, stressing that resolving the war matters more than short-term market swings despite a resilient economy.
"We should all hope that… we win this thing and clean up the straits and that Iran is no longer a threat to everybody," Dimon said.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
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