Jim Cramer: Wall Street is focusing too much on what could go wrong instead of right

Mad Money

Published Tue, Nov 10 20266:41 PM EST

Investors shouldn't let a barrage of bad news drive them out of the stock market, CNBC's Jim Cramer said Tuesday.

Stocks fell Tuesday after a hotter-than-expected inflation report fueled concerns about a bigger half-point Federal Reserve interest rate hike at next month's meeting. The Nasdaq dropped 0.74%, while the S&P 500 lost 0.38%, preventing the indexes from logging three-session win streaks following Thursday's postelection rout. The artificial intelligence trade was also under pressure as the Nvidia CEO scandal simmered and despite a bullish valuation bump on the Anthropic IPO.

"At times like this, where you have a bull market one day and a bear market the next and investors seem to have no conviction, you need to think not only what can go wrong, but also about what can go right," the "Mad Money" host said.

Tuesday's consumer price index, which exceeded estimates, sent Treasury yields higher. Dallas Fed President Lorie Logan suggested two quick quarter-point increases may be necessary. Only hours before the CPI print, Fed Governor Christopher Waller supported another quarter-point hike and left the door open to a half-point increase. The market is now fully pricing in a quarter-point rate hike at the central bank's December meeting, with a 12% probability of a half-point increase, according to the CME FedWatch tool.

Still, Cramer argued that an end to the Iran war could send oil prices sharply lower, easing inflation and reducing pressure on the Fed. "If we see oil plummet to $40, which is what the chart of oil refining giant Valero says to me, and you get Walmart and Costco to force price cuts for branded products or make their own excellent house brands for everything, then you are going to see the CPI come down," he said. Oil dipped under $90 per barrel for the first time since August on hopes for a Middle East detente.

Another potential catalyst is Nvidia, despite the uncertainty surrounding CEO Jensen Huang and his affair with an alleged Chinese spy. Cramer said strong earnings, a massive share buyback, and a temporary leave for Huang during an independent investigation, with longtime executive Ian Buck potentially serving as interim CEO, could help restore investor confidence. Nvidia shares sank for a second straight day.

A successful Anthropic initial public offering next week could further revive confidence in the AI trade. According to an updated filing, the Claude developer is set to price the offering on Nov. 18, with trading set to begin the next day. The company could be valued on a fully diluted basis at over $1.4 trillion, which is way up from the $965 billion valuation announced as part of a funding round back in May.

Taken all together, Cramer said, those developments could create a more favorable backdrop for stocks. "The idea of everything going wrong is not in my lexicon," Cramer said. "We just need a few breaks. I think we will get them."