CNBC’s Jim Cramer said Friday that the market’s become “incredibly overconfident” following the Iran-U.S. ceasefire news, which caused a massive rally in stocks this week.
The S&P 500 closed Friday up 3.6% week to date. Gains were fueled by President Donald Trump’s two-week pause on Iranian strikes, announced late Tuesday, which gave the market a brief reprieve from the conflict that has pressured equities since early March. The Nasdaq Composite and Dow jumped 4.7% and 3%, respectively, over the past five sessions as well. Each index posted its best week since November.
“Two weeks ago, everyone was on tenterhooks, so we got oversold and then we had a buying explosion when we got wind of a truce,” “Mad Money” host said. “Now after a gigantic gain, I see many people who are suddenly sanguine about stocks, which is not in keeping with the treacherous nature of the situation away from the market.” He added that “the idea that everything will finally go right in the Middle East seems like a real stretch to me.”
Cramer said it’s not wise for investors to make any sudden moves with the market in such a perilous state and all the war uncertainty. After all, less than two days after the ceasefire agreement, Trump on Thursday warned that Iran “better stop now” if it’s charging fees to oil tankers going through the Strait of Hormuz.
“Frankly, [the market’s] incredibly overconfident right now, given the tenuous nature of our ceasefire with Iran and the fact that they can shut down the most important commercial waterway on earth in a heartbeat,” Cramer said.
If investors feel the need to buy or sell frantically right now, Cramer reminded them that the market’s not in a “make or break moment.” He continued, “There’s no systemic risk here that I can see, something that could bring down the whole entire edifice.”
Cramer then turned to the week ahead, where corporate earnings will be front and center.
Goldman Sachs will kick off big bank results on Monday morning. Barring any serious war developments over the weekend, Cramer predicted a “solid set of numbers and good reaction.” He pointed to potential upside for Goldman’s trading desk, which benefits from volatility in the stock market. Goldman is also a holding in Cramer’s Charitable Trust, the portfolio managed by the CNBC Investing Club.
Tuesday brings earnings from Johnson & Johnson as well. Cramer loves this drugmaker because of its robust pipeline. This stock does have a habit of “getting hammered,” Cramer said, on the initial earnings results, then rallying once the conference call with management starts. “If it gets blasted, try to get some,” he added. In fact, the Charitable Trust started a position in Johnson & Johnson on Wednesday.
JPMorgan, Wells Fargo and Citigroup all report Tuesday, too.
Watch out for JPMorgan’s conference call because CEO Jamie Dimon tends to give cautious commentary, Cramer said. Still, he described JPMorgan as a “terrific bank.” Meanwhile, Cramer said Wells Fargo, another holding in the Charitable Trust, “is not an earnings story.” Instead, “it’s a long-term turnaround story orchestrated by CEO Charlie Scharf, a fantastic bank exec who wants that stock price higher,” he added. Finally, Cramer predicted that Citi stock will jump the most among the three next week as shares tend to rally on earnings.
On Wednesday morning, Morgan Stanley‘s quarter will give a good read on the appetite for Wall Street dealmaking. “I expect a great number of IPOs in the second half of the year,” Cramer said. “This investment bank should have a fabulous 2026.”
Finally, PepsiCo results come in on Thursday.
Cramer’s been impressed by how well the Cheetos owner has navigated the boom in GLP-1 weight loss drugs as it’s made processed foods less popular among young adults. “While CEO Ramon Laguarta has had his missteps, like the chips that he made that were too expensive, he’s navigated both soft drinks and Frito Lay in ways that demonstrate that he’s listening to the customer,” he added.
Zooming out, Cramer had one final messages for investors ahead of next week’s slate of earnings.
“Here’s the bottom line: Despite that tenuous ceasefire with Iran, I bet there’s a notion of opportunity. I just think the bulls need to pull in their horns a little bit. They need to have a little more fear to match the fear about what will happen with Iran over the next week,” Cramer said.
“Otherwise, the overconfidence and overbought nature of the market are just simply not conducive to us going that much higher.”
