Cramer says to ‘keep it simple’ and celebrate any Fed rate cut as nerves run high

CNBC's Jim Cramer reflected on Wednesday's volatile market action, telling investors not to overthink the situation and remember that any Federal Reserve rate cut is positive.
"I say keep it simple: rate cuts are good," he said. "Small rate cuts are great, because they project confidence and give you a lot more rat cuts later on, and they do not allow for panic."
Cramer also touched on the huge gains in tech that led the session's rally, which came after several weeks of struggles.

As Wall Street speculates about the outcome of the Federal Reserve's upcoming meeting, CNBC's Jim Cramer reflected on Wednesday's volatile market action, telling investors not to overthink the situation and remember that any rate cut is positive.

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"I say keep it simple: Rate cuts are good," he said. "Small rate cuts are great, because they project confidence and give you a lot more rat cuts later on, and they do not allow for panic."

After a day of uneven trading, the averages ultimately finished higher, with the Dow Jones Industrial Average gaining 0.31%, the S&P 500 adding 1.07% and the Nasdaq Composite soaring 2.17%. the market reacted to new consumer price data that informs the Federal Reserve's interest rate decisions. While overall inflation declined to its lowest level since February 2021, one key metric rose slightly more than expected, disappointing some who hoped the Fed would make a 50 basis-point rate cut instead of a 25 basis-point cut.

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To Cramer, the CPI reading was not shocking, but "basically in-line" with expectations, which is good in the run-up to the central bank's decision. He stressed that even a smaller rate cut than hoped would be positive for many businesses.

Cramer also touched on the huge gains in tech that led the session's rally, which came after several weeks of struggles. He attributed the gains from Nvidia and peers to CEO Jensen Huang's comments at a Wednesday conference, where he touted the fierce demand for his company's new graphics chip. But Cramer stressed the palpable tension on Wall Street does not set the stage for any steadfast conclusions.

"Look, we're in a highly emotional market," he said. "The action in stocks like Nividia or Broadcom or even JP Morgan ... makes it perilous to draw any conclusions, save one: Lots of companies that are doing okay will do much better when the Fed starts cutting rates, and their stocks will do better, too."