CNBC’s Jim Cramer unpacked Thursday’s market selloff, telling investors that Wall Street is worried about a prolonged government shutdown and that the build-up of artificial intelligence is getting out of control.
“The bottom line is that the government needs to get back to work, that the data center mass needs to be insulated from the rest of the economy, and that some of the most popular stocks need to continue to cool down further,” he said. “Before that, we were certainly at the mercy of the headlines, but these days, all anyone pays attention to is the terribly negative headlines.”
The average ends in the red, Dow Jones Industrial Average It ended up falling by 0.84%. S&P500 Down 1.12%. of Nasdaq Composite fell 1.9%, putting the tech weight ratio on pace for its worst week since early April.
The federal government shutdown entered its 37th full day on Thursday, making it the longest in U.S. history. Hundreds of thousands of employees have been furloughed or are taking essential jobs without pay. Cramer said investors know little about the health of the economy because the ongoing government shutdown has delayed the release of key official economic indicators. But he also pointed to some other information, including a report from one company that suggested layoffs in October reached the highest level for the month in 22 years.
See analysis by Cramer JP Morgan‘s Michael Chamberrest suggested that the “chunk” of AI and data centers is starting to engulf large parts of the economy. Kramer said this mass is becoming “increasingly threatening” as giants like OpenAI spend billions of dollars on new technology. Investors were stunned when OpenAI Chief Financial Officer Sarah Friar suggested earlier this week that the government could backstop the company’s data center expansion, he noted. Although Mr. Frier later denied that OpenAI needed a federal backstop, Mr. Cramer suggested that many on Wall Street remain wary.
“We’ve been able to skate by bears the last few weeks,” he said. “I don’t think that’s possible anymore.”
