CNBC’s Jim Cramer dissected Tuesday’s market action, speculating about how President Donald Trump’s first days in the White House are impacting the market. He suggested that stocks rallied because some investors believe Trump’s tariff promises are more severe than his action will be.
“In the last go round, Trump did lay into companies that were moving operations to Mexico. He did opine that Amazon abused the Post Office. But those were all buying opportunities,” he said. “This time, he carried a big stick going into the White House but spoke softly once he was ensconced in 1600 Pennsylvania Avenue.”
By close, the Dow Jones Industrial Average gained 1.24%, the S&P 500 climbed 0.88% and the Nasdaq Composite added 0.64%. Tech stocks rallied Tuesday, although the sector was brought down by Apple, which saw its shares tumble after a few analyst downgrades.
Cramer suggested Trump’s tariff restrictions might not be as severe as was promised on the campaign trail. On Tuesday, he threatened 25% tariffs on imports from Canada and Mexico as well as 10% on goods from China. However, Trump did not yet say he would slap tariffs on all countries, as he had indicated previously.
Cramer also said stocks reacted to the promise of new projects, like a multibillion dollar White House artificial intelligence infrastructure initiative backed by OpenAI, Oracle and SoftBank, as well as the presence of high-profile tech executives at the inauguration. But Cramer admitted that Trump has been unpredictable in the past, so the future remains uncertain. However, he said it seems so far that Trump will act favorably towards big business, especially Big Tech, noting his close alliance with Tesla CEO and the world’s wealthiest man, Elon Musk.
“Will it stay this way? What did we learn about Trump the first time around? You could never be sure,” Cramer said. “The difference on day one? He knows business people, Silicon Valley. He knows how things work. You may like him. You may hate him. But the bottom line? If you’re a tech titan, Trump will take your call. In fact, he’ll call you.”
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