According to CNBC’s Jim Cramer, having too many risky stocks helped the market recover from last week’s selloff.
“I don’t like days like today because speculative stocks lead to poor leadership,” he said. “It’s much more encouraging to have proven people in the lead roles, even if proven names mean the Magnificent Seven and their fellow travelers.”
The index recovered some of its losses from Friday’s selloff, but $2 trillion in market capitalization was wiped out after President Donald Trump posted on his Truth social platform threatening to raise tariffs on China, saying the country was “becoming very hostile” to the rest of the world. After trading closed on Friday, President Trump announced that the United States would impose 100% tariffs on Chinese goods.
But stocks soared during Monday trading after President Trump said “everything is going to be fine” with China, allaying Wall Street’s concerns about the president’s tariff actions.
of Dow Jones Industrial Average It added 1.29%, representing 67% of Friday’s loss. S&P500 rose 1.56%, recouping 56% of its previous decline. of Nasdaq Composite Tech stocks nearly dominated the market rally, rising 2.21%.
broadcom After announcing a major deal with OpenAI, Cramer said he helped put the company ahead of other companies. But apart from the immediate theme of artificial intelligence data centers, Monday’s biggest winners were “some of the most speculative stocks,” he said.
Cramer cited concerns that too many speculative stocks are making huge profits and creating market bubbles, particularly in the nuclear power and quantum computing space.
Speculative stocks can be volatile investments because their stock prices can rise rapidly with little profit.
He named several speculative stocks whose stocks soared on Monday. bloom energy, Oklo, monolithic power system, NuScale Power, righetti computing and D Wave Quantum.
“Today’s rally was tremendous, but the market hasn’t come back all the way, or even close to it,” he said. “And the stocks that actually skyrocketed were the most speculative stocks and the stocks that I was most concerned about.”
