Jim Cramer explains why stocks were headed higher on Monday

CNBC

3 hours ago

CNBC's Jim Cramer parsed Monday's market action, explaining why he thinks stocks went higher after the market digested news of the U.S.'s attack on Iran and the country's response.
"Today, the market breathed a bullish sigh of relief when Iran simply fired ordinary missiles at our military bases in the region. At least so far, there haven't been any casualties," he said, adding that President Donald Trump said Iran warned the U.S. of the attack before it happened. "We blew up their nuclear program and that's all they can come up with?"
The U.S. dropped bombs on key nuclear facilities in Iran, directly entering the war between the country and Israel over the weekend. On Monday, Iran announced it had attacked a U.S. military base in Qatar in retaliation. However, Qatar's Defense Ministry said it successfully intercepted the missile strike and reported there were no deaths or injuries.
Investors largely shrugged off the escalating geopolitical turmoil, and the Dow Jones Industrial Average rose 0.89%, the S&P 500 added 0.96% and the Nasdaq Composite gained 0.94%. Investors were relieved that Iran's retaliation was more restrained than expected. Wall Street bet that the oil supply would not be seriously disrupted by the conflict, and oil sold off throughout the day. In a truth social post, Trump said "everyone" should keep oil prices low, and doing otherwise would "play into the hands of the enemy."
According to Cramer, the market tends to "move on" from conflict in the Middle East as long as the price of oil doesn't spike and impact the U.S. economy, saying Wall Street is used to chaos in that region.
He said investors are shifting their focus to more bullish developments, like comments from Federal Reserve officials that suggest rate cuts could be in the near future. Wall Street was also pleased by reports that Meta is spending big to hire top talent, and that Tesla CEO Elon Musk touted a "successful" robotaxi launch in Austin, Texas, Cramer said. He also said investors were encouraged by a report that Bank of New York Mellon approached Northern Trust to discuss a potential merger.
"I don't think we could have had such a bullish day without those Fed officials floating the idea of imminent rate cuts, but it's entirely possible that our government destroyed Iran's nuclear program," Cramer said. "That means this war may be nearing its end, and a jump in oil prices may have been taken off the table."
Click here to download Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest smarter.Disclaimer The CNBC Investing Club Charitable Trust holds shares of Meta.