CNBC’s Jim Cramer said that Monday’s stock market resilience in the face of the Iran war comes down to the Middle East no longer carrying the same economic weight it once did.
“The market simply didn’t mind,” Cramer said on “Mad Money,” after the S&P 500 closed slightly higher on the first day since the U.S. and Israel attacked Iran over the weekend. At session lows, the index was down 1.2%. Over the course of the day, Cramer pointed out, “We rebounded substantially from those lows.”
U.S. energy independence has changed how investors react to geopolitical shocks, Cramer said. “We produce so much oil domestically that there’s really nothing [world oil producers] can do to cut us off.” U.S. oil benchmark, West Texas Intermediate crude, spiked more than 12.4% higher at Monday’s session highs. “The price couldn’t hold,” he added. WTI settled up 6% to $71.23 per barrel in New York trading.
While the geopolitical sentiment on Wall Street is cautious, it appears that investors were also willing to overlook other trouble spots that rattled the market last week. “We didn’t seem to care at all about the pain in the software group,” Cramer said, despite concerns that “AI platforms that can write code cheaper than humans and do it in abundance.” The market also shrugged off steep declines in private equity names, including KKR, Blackstone, and Apollo.
The bottom line, Cramer said that geopolitical turmoil isn’t automatically translating into economic panic because U.S. energy resources are “much more bountiful than they used to be any time in the last 50 years or longer.”
For now, investors are choosing optimism.
