Jim Cramer says this stock is 'the barometer' for the stock market — and it's not Nvidia

CNBC

a day ago

Want to gauge the temperature of this stock market at record highs? Jim Cramer says to take a look at the stock chart of a Wall Street firm founded a few years after the end of the Civil War: Goldman Sachs . "Goldman encapsulates everything — IPOs, M & A, trading volume. This is the barometer for this stock market, and it took off like I haven't seen in ages," Cramer said before Wednesday's opening bell. Cramer's Charitable Trust, the portfolio used by the CNBC Investing Club, owns a stake in Goldman Sachs. Shares of the iconic American investment bank, established in 1869, jumped 3.4% on Tuesday to close at an all-time high of $743.38. That brought its year-to-date gains to roughly 30%. More remarkably, the stock is up about 61% from its "reciprocal tariff" lows in early April — more than double the S & P 500's advance in that time. Goldman shares extended their gains modestly in Wednesday's session. GS .SPX YTD mountain Goldman's year-to-date performance versus the S & P 500. At a time when the billions of dollars being spent on artificial intelligence infrastructure like data centers and semiconductors — and speculative meme stocks made a return — Goldman's huge year may be flying under the radar for some investors. Tariff-driven market volatility plays right into the hands of Goldman's trading desks. But as tariff uncertainty has declined, the rebound in mergers-and-acquisitions activity and the thawing of the initial public offering market has made its bankers quite busy. For its part, Goldman also has a team involved in data center financing. Goldman's big advance Tuesday, in particular, came alongside a strong day for the broader financial sector, Cramer noted, as investors bet the July consumer price index report would give the Federal Reserve a green light to cut interest rates at its September meeting. Given the economic sensitivity of financial firms, Cramer said it's encouraging when the cohort is an active participant in market rallies. Additionally, Goldman stock rallied Tuesday despite President Donald Trump's social-media criticism of Goldman CEO David Solomon and the bank's chief economist over the firm's analysis of tariffs. "Just when the president was attacking Solomon, Solomon's business has come together. I find that ironic," Cramer said.