Ongoing government shutdown AI fears market pressure Jim Cramer

CNBC’s Jim Cramer explained Thursday’s market decline, telling investors that Wall Street is worried about a prolonged government shutdown and that AI development is out of control.

“The bottom line is we need the damn government to get back to work, and we need the data center block cordoned off from the rest of the economy, and we need some of the hottest stocks to continue to cool even further,” he said. “Until then we were at the mercy of the headlines, and the only thing that has caught anyone’s attention lately has been the damn negative headlines.”

Averages closed in red Dow Jones Industrial Average It finished with a decrease of 0.84% And S&P 500 Down 1.12%. Nasdaq Composite It fell 1.9%, putting the tech-heavy index on track for its worst week since early April.

The federal shutdown entered its 37th full day on Thursday, making it the longest shutdown in U.S. history. Hundreds of thousands of employees have been furloughed or are working unpaid essential jobs. The ongoing shutdown has delayed key official economic data, leaving investors largely in the dark about the health of the economy, Cramer said. But he also noted a few other pieces of information, including a firm’s report suggesting layoffs in October reached a 22-year high.

Cramer referenced analysis with JPMorganMichael Cembalest argues that the AI ​​and data center “trick” is beginning to envelop many parts of the economy. Cramer said the bloc was becoming “increasingly threatening” as giants such as OpenAI pledged to spend billions of dollars on new technology. OpenAI CFO Sarah Friar has investors freaking out. recommended He stated earlier this week that the government may halt the company’s data center construction. Friar later denied that OpenAI needed a federal backing, but Cramer noted that many on Wall Street remain cautious.

“We’ve been able to slide past the bear for the last few weeks,” he said. “I don’t think that’s possible anymore.”