Jim Cramer on Trump's Tariff Pause, Short Squeeze, and Market Lessons

Trump's Tariff Policy Shift

• 🎯 President Trump announced a 90-day pause on most worldwide tariffs, excluding Canada, Mexico, and China, to allow for negotiations.
• ⚠️ While pausing tariffs for 75 countries, Trump intends to increase the tariff on China to 125%, described as almost an embargo.

Market Reaction and Short Squeeze

• 🚀 The market experienced one of the greatest short squeezes in history following the tariff news.
• 📈 The Dow surged 2,962 points, the S&P 500 rose 9.52% (best day since 2008), and the NASDAQ jumped 12.16% (second best day on record).

Lessons from the Market Volatility

• 💡 Lesson One: Nobody makes money by panicking; staying the course is crucial for long-term gains.
• 🐻 Lesson Two: Bulls make money, bears make money, but those who stayed short were pigs and suffered significant losses.
• 🎭 Lesson Three: President Trump thrives on drama and certainty should not be expected from his presidency.
• 🏢 Lesson Four: Betting against strong companies like Nvidia, Apple, or Microsoft is risky; sell them when they are up, not down.
• 📊 Lesson Five: Typical annual gains often occur on just seven days; being invested is essential to capture these opportunities.

Market Analysis and Future Outlook

• 📉 The S&P oscillator hit an extreme reading of minus 10, indicating excessive selling pressure.
• 📈 Historically, after such readings, the S&P 500 has shown an average gain of 2.7% over the next 30 days, with few exceptions.
• ⚠️ The two main exceptions were the 2011 debt ceiling crisis and the February 2020 COVID-19 onset, which are not directly comparable to the current situation.
• 💡 The rally suggests that Trump is not trying to destroy the economy and will change course if policies negatively impact the market.

Stock-Specific Advice

• ⚠️ Mercury (MER) is noted as a nightmare stock, but Cramer advises staying the course if bought at a 4% yield.
• 🏢 Honeywell (HON) is considered dramatically undervalued, with Cramer being a firm believer and buyer at current levels.
• 🚗 Rivian (RIVN) is not recommended as a buy due to significant money spent, described as "daunting" or "horrible."
• 📦 FedEx (FDX) saw a 10% rally today; Cramer advises against buying a stock that has already surged, despite acknowledging it as a good company facing difficult conditions due to tariffs.