CNBC’s Jim Cramer on Wednesday said the two most important forces in this market, the Federal Reserve and the technology sector, both got shocked “in a positive way” this week.
The Fed held interest rates steady on Wednesday and revised its outlook to just one rate cut in 2024. But Cramer said this morning’s “very cool” consumer price index number caught the Fed by surprise. The CPI is a key inflation gauge, and it rose 3.3% in May from a year ago, according to the U.S. Labor Department. The figure is down from 3.4% in April.
Cramer said the number “simply didn’t jibe” with the narrative that the Fed bought into when it started its meeting yesterday. He said before the CPI, rate cuts didn’t seem like they were on the table. As such, the positive event overran the Fed’s negative expectations.
The tech market has also caught investors by surprise this week, Cramer added.
Apple‘s stock closed up nearly 3% on Wednesday, continuing its rally after shares closed up more than 7% on Tuesday.
The company announced its long-awaited push into artificial intelligence at its annual developers conference on Monday, where it introduced a range of new AI features such as an overhaul of its voice assistant Siri. The features weren’t warmly embraced right away, and Cramer said the ground swell of support from buyers has shocked Wall Street.
Additionally, Cramer pointed to Oraclewhich closed up more than 13% on Wednesday. The company released fourth-quarter results on Tuesday that missed analysts’ expectations, but it showed there is strong demand to use its cloud to train AI models. Oracle has a backlog of almost $100 billion, according to the report.
“That’s just incredible and it confirms what the bulls have been saying all along — that generative AI is real and it’s spectacular,” he said.
Cramer said the Fed and the tech sector have both been rocked in a meaningful way, and it’s going to make investors “a lot of money” if they’re in the right stocks.
