CNBC’s Jim Cramer warned traders to not make main market strikes primarily based solely on the Fed’s interest rate selections, suggesting main market themes have not likely modified within the wake of the central financial institution’s Wednesday assembly.
“While we could’ve gotten more dovish languish from Powell, of course…No big themes were upended. No longer-term gains were put on hold. In the end, everybody with half a brain knew we’d get a quarter point cut,” he stated, including that the uneven market motion following the Fed’s assembly might need even created alternatives for consumers.
“Why is that? Because we do not trade cuts in rates,” Cramer continued. “We don’t buy or sell stocks based on statements by Jay Powell,” Cramer continued.
Wednesday’s session was combined after the Fed lowered its benchmark in a single day lending rate by 0.25% after its September assembly. It additionally indicated two extra cuts could possibly be on the way in which earlier than the tip of the 12 months. The Dow Jones Industrial Average completed up lower than 0.6%, the S&P 500 closed down 0.1% and the Nasdaq Composite misplaced about 0.3%. While the Fed’s transfer was largely anticipated by Wall Street, some traders might need been discouraged by the committees’ extra hawkish outlook for subsequent 12 months, as members forecasted just one rate cut in 2026.
The Fed cited current weak spot within the labor market in its post-meeting assertion, saying “job gains have slowed, and the unemployment rate has edged up but remains low.” The assertion additionally stated “inflation has moved up and remains somewhat elevated.”
To Cramer, the market’s response to the Fed’s choice signifies that some traders had been anticipating a bigger cut, or that there are some who imagine shares are overvalued with out big cuts.
He listed off just a few sectors he thinks can proceed to carry out proper now, together with expertise and synthetic intelligence, in addition to banking. He additionally stated he doesn’t “see any real reason to get excited about the interest rate sensitive cyclicals, including the housing stocks,” however added that he would possibly purchase them if the Fed had significantly thought of a double rate cut.
The Fed is “caught between a rock and a hard place,” Cramer stated. The central financial institution should deal with continued inflation — a lot of which comes from tariffs — and a weakening job market, he continued. Cramer stated Fed Chair Jerome Powell is prudent, which is a fascinating attribute for these in his place. He added that Powell doesn’t wish to get forward of himself as a result of “nobody knows what the real impact of tariffs will be, except that it’s going to be negative.”
“Sorry spectators who wanted something exciting, it’s steady as she goes from Powell,” he stated. “And it’s, well, if you ask me, exactly what we needed.”