‘History is being disobeyed’: Jim Cramer says Iran war should be slaughtering stocks, but the US has a ‘secret weapon’

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By each humanities measure, stocks should beryllium tanking close now. Oil prices person surged much than 50% since the US-Iran warfare fundamentally unopen down the Strait of Hormuz, with Brent crude climbing astir 7.2% to $102.59 a tube connected April 22 (1).

Energy shocks of this magnitude person historically dragged equities sharply lower. Yet, connected the aforesaid day, the S&P 500 closed astatine 7,137.90 (2) — clawing backmost virtually each its war-related losses and past some.

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CNBC's Mad Money big Jim Cramer addressed (3) this disconnect head-on, and his mentation comes down to involvement rates — thing astir investors aren't paying capable attraction to.

"I deliberation I've been negligent successful bringing up the powerfulness of debased rates, due to the fact that it's the crushed the bulls support winning erstwhile it seems similar they should beryllium slaughtered," Cramer said. "Let's not overthink it. If involvement rates were spiking, this marketplace would beryllium precise different."

The mechanics of Cramer's statement are worthy knowing arsenic a idiosyncratic concern matter: When involvement rates rise, investors request a little terms for each dollar of aboriginal firm profits. This is called price-to-earnings aggregate compression.

The reverse is besides true. Falling oregon unchangeable rates fto investors warrant paying much for stocks, adjacent amid geopolitical chaos.

"What's the Strait of Hormuz person to bash with the price-to-earnings ratio of Bristol Myers?" Cramer asked (3). "The reply is nothing."

The 10-year Treasury output peaked astir precocious connected March 26 (4), and tellingly, Cramer notes (3), the S&P 500′s lowest adjacent of 2026 came conscionable days later, connected March 30. Once enslaved yields rolled over, stocks followed upward. The series is the market's halfway valuation mechanics astatine work.

Monday's trading reinforced Cramer's point. "Beaten-up bundle stocks," including Salesforce and Microsoft (3), were among the strongest performers, portion vigor stocks astir straight tied to the warfare successful Iran lingered. Investors were reaching for growth, not defense.

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Cramer besides pointed to a coming displacement astatine the Federal Reserve arsenic a imaginable tailwind. Jerome Powell's word expires (5) successful May, and President Donald Trump's nominee to win him is Kevin Warsh (6), a erstwhile Fed politician viewed by marketplace watchers arsenic idiosyncratic apt to support short-term rates dependable oregon chopped them.