Jim Cramer: Stocks rising despite oil gains signals a new market message

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CNBC’s Jim Cramer said Tuesday the stock market is flashing a notable shift, with equities climbing even as oil prices move higher. That’s a break from the typical relationship that has tied elevated energy costs to market weakness since the Iran war broke out.

“We keep seeing new patterns,” Cramer said on “Mad Money” from San Jose, California, where he is attending Nvidia’s annual GTC developers event this week.

“I’m talking about increasingly positive ones. After three weeks of negativity, the new pattern today? Even though oil rallied 3%, many stocks still managed to go higher,” he explained.

West Texas Intermediate crude, the U.S. oil standard, finished up 2.9% Tuesday at $96 per barrel after losing 5.3% in Monday’s session.

The major stock measures finished higher for the second straight day with the Dow Jones Industrial Average inching up 0.1%, the S&P 500 advancing 0.25%, and the Nasdaq increasing 0.47%.

As oil jumped, investors largely looked past the move and honed in on company-specific strengths. “Investors ignored that action and instead focused on the fundamentals of individual companies excluding oil,” Cramer said, noting that “when you take petroleum out of the equation, when you ignore the increase, it looks pretty darned good.”

That shift comes as fears around the Middle East appear to be stabilizing. “Last week, many thought the war with Iran was out of control,” Cramer said. “Now things feel a little less crazy. … But it was enough to get people buying.”

What investors bought – and avoided – offered key insight into the market’s mindset. “The anomalies are stark,” Cramer said, pointing to the strength in unexpected areas.

Airline stocks held up despite higher oil prices after Delta Air Lines CEO Ed Bastian said to CNBC Tuesday that the company is seeing strong demand, including from high-paying business travelers. “It was an extraordinary display of real-world positives clashing with Wall Street negatives. And today, the real world won.” Shares of Delta closed 6.5% higher Tuesday.

Beaten-down sectors also rebounded. Private equity firms like Blackstone, Apollo, and Ares surged as investors reassessed concerns around private credit. At the same time, optimism around enterprise software improved after Thoma Bravo’s Orlando Bravo pushed back on private credit criticism Tuesday, saying the majority of his deals are performing well. “The bears are gonna be roasted if they keep shorting this group,” Cramer said.

To be sure, not all areas participated. Nvidia, despite strong announcements at GTC, lagged as “everyone’s already in the pool,” limiting new buying, Cramer said.

Shares of Nvidia finished the day down 0.7%.

Still, Cramer said the broader takeaway for the most valuable company in the world is clear: “Things are better than I thought when I got out here. That will ultimately translate into higher stock prices for Nvidia.”

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