Jim Cramer didn’t hold back when discussing Tuesday’s market slump, calling the day’s selloff extreme.
He noted, “This market’s so ridiculous, you can knock it over with a feather or take it up with a breeze,” pointing out that the reaction seemed exaggerated.
It’s not a market collapse, but rather a tough time for some industries while others are thriving.
On Tuesday, the Dow fell 1.51%, the S&P 500 slid 2.12%, and the Nasdaq dropped 3.26%, largely driven by a selloff in tech stocks.
Investors became jittery after weaker-than-expected manufacturing data, stoking fears of an economic slowdown.
Cramer highlighted that cyclical stocks, like homebuilders, were unfairly caught in the downturn, even though their performance remains solid.
He suggested that sellers are betting the good times won’t last, but he thinks this worry is premature.
Both D.R. Horton and Lennar, despite strong quarterly results, saw their stocks fall over 2%.
Cramer predicts that business could bounce back, especially once the Federal Reserve implements likely interest rate cuts.
When that happens, he believes those who sold may regret it.
The tech sector also faced major challenges, with chipmaker Nvidia suffering the most.
Once a Wall Street favorite, Nvidia’s stock plunged over 9%, erasing nearly $300 billion in market value.
Investors are now concerned that the surge in AI spending might be reaching its peak.
Cramer injected some optimism, suggesting the decline isn’t as severe as it seems.
“This whole decline — which, again, I have said is not done — will end up being too extreme. The situation isn’t as bad as we think when it comes to all of AI tech,” he said.
On the other hand, packaged goods stocks saw “radical rallies” as investors anticipated a slower economy.
However, Cramer warned that these buyers might have already gotten ahead of themselves.
Cramer believes the market’s recent wild swings don’t reflect the actual state of the economy.
Some industries are being overly punished, while others may be overvalued, making it a time for cautious investing rather than knee-jerk reactions.
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