Cramer warns of ‘overconfident’ market after U.S.-Iran ceasefire
CNBC’s Jim Cramer said Friday that the market has become “incredibly overconfident” following news of the Iran-U.S. ceasefire that caused a big rally in stocks this week.
S&P 500 It closed Friday up 3.6% year to date. The gains were boosted by President Donald Trump’s two-week pause on Iran strikes announced late Tuesday, giving the market a brief respite from the conflict that has weighed on stocks since early March. Nasdaq Composite And Dow It increased by 4.7% and 3% respectively in the last five sessions. Every index had its best week since November.
“Two weeks ago, everyone was nervous, so we got oversold, and then when we got the news of the ceasefire, we had a burst of buying,” the “Mad Money” host said. “Now after a huge gain, I’m seeing a lot of people suddenly become optimistic about stocks, which is not in line with the dangerous nature of the situation outside the market.” “I find it really difficult to think that everything will turn out okay in the Middle East in the end,” he added.
Cramer said it was unwise for investors to make sudden moves with the market in such a dangerous situation and the uncertainty of war. After all, less than two days after the ceasefire agreement was reached, Trump warned Thursday that if Iran charges oil tankers passing through the Strait of Hormuz, it “better stop now.”
“Frankly, [the market’s] “I’m incredibly overconfident right now, given the tenuous nature of our ceasefire with Iran and the fact that they could immediately shut down the most important commercial waterway in the world,” Cramer said.
If investors feel the need to buy or sell like crazy right now, Cramer reminded them that the market is not in a “make or break moment.” He continued: “As far as I can see here, there is no systemic risk that could bring down the entire structure.”
Cramer then turned to next week, where corporate earnings will take center stage.
Goldman Sachs Major bank results will begin on Monday morning. Barring any serious war developments over the weekend, Cramer predicted “solid numbers and a good response.” He noted the potential upside for Goldman’s trading desk taking advantage of stock market volatility. Goldman is also a holding of Cramer’s Charitable Trust portfolio managed by CNBC Investing Club.
Tuesday brings profit Johnson&Johnson additionally. Cramer likes this drugmaker for its robust production line. Cramer said this stock has a habit of getting “beaten” based on early earnings results, then rebounding once the conference call with management begins. “If it explodes, try to pick some up,” he added. In fact, Charitable Trust initiated a position in Johnson & Johnson on Wednesday.
JPMorgan, Wells Fargo And citigroup All will report on Tuesday.
Pay attention to JPMorgan’s conference call because CEO Jamie Dimon tends to make cautious comments, Cramer said. Still, he called JPMorgan “a terrific bank.” Meanwhile, Wells Fargo, another of Charitable Trust’s holdings, “doesn’t have an earnings story,” Cramer said. Instead, he added, “This is a long-term comeback story orchestrated by CEO Charlie Scharf, a great bank executive who wants stock prices to be higher.” Finally, Cramer predicted that Citi shares will rise the most next week as stocks tend to rebound due to earnings.
Wednesday morning, Morgan StanleyThe quarter will provide good reading on deal-making appetite on Wall Street. “I expect a lot of IPOs in the second half of the year,” Cramer said. “This investment bank should have a great 2026.”
Finally, PepsiCo Results come on Thursday.
Cramer was impressed with how well the Cheetos owner has been able to handle the boom in GLP-1 weight-loss drugs as it makes processed foods less popular among young adults. “While CEO Ramon Laguarta has made missteps, such as making the chips he makes too expensive, he has steered both soft drinks and Frito Lay in a way that shows he is listening to the customer,” he added.
Cramer had one final message for investors ahead of next week’s earnings call.
“The bottom line is that despite the tenuous ceasefire with Iran, I’m betting there’s a notion of opportunity. I just think the bulls need to pull their horns a little more. They need to have a little more fear versus fear of what’s going to happen to Iran next week,” Cramer said.
“Otherwise, the overconfidence and overbought nature of the market will not help us move this high.”
