Key Points
- CNBC’s Jim Cramer said that panicking is not a winning strategy during market volatility.
- What happens with Adobe, Salesforce, ServiceNow and Workday could also shift market direction.
CNBC’s Jim Cramer said investors need to stay in the game as the U.S.-Iran war persists, pointing to Tuesday’s partial market recovery as proof of how quickly the situation can change. “I want you to be thinking that these are companies you’re investing in, not trading cards you’re shuffling,” Cramer said on “Mad Money.” Wall Street got off to an ugly start Tuesday, with the Dow Jones Industrial Average losing more than 1,200 points in the early going. At their session lows, the S & P 500 was off by 2.5%, while Nasdaq was down 2.7%. Cramer said stocks were trading like investors feared a prolonged war that would be difficult for the U.S. and Israel to win. Surging oil prices also weighed heavily on stocks early in the session. However, stocks rebounded throughout the day and the indexes ultimately closed well off their lows, albeit still firmly in negative territory. President Donald Trump offered some commentary that appeared to help sentiment, including saying the U.S. Navy would escort tankers through the Strait of Hormuz following Iran’s threats to attack vessels attempting to cross the vital oil waterway. U.S. oil benchmark WTI settled at $74.56 a barrel, well below its session highs of almost $78. “If you took action in the morning, if you did a proverbial ‘get out now,’ you didn’t have time to get back in once the averages started bouncing from their lows. You never do,” Cramer said. “If you think that you should be taking action on every drone, every missile, go trade in the predictions market. Get out of our house. That’s gambling,” he added later. “I prefer to focus on investing and that’s less connected to the war than you might think and a lot more connected … to the performances of the companies themselves.” And beneath the surface of the indexes, Cramer said he sees some interesting dynamics that investors should not ignore. Specifically, Cramer pointed to a group of enterprise software stocks he’s dubbed the “big four”: Adobe , Salesforce , ServiceNow and Workday . The group has been clobbered in recent weeks on AI disruption fears. But on Tuesday, all four stocks rallied, led by Workday, which added 7.2% and was the best performer in the S & P 500. With the way existential concerns about software have spread to hurt the share prices of alternative asset managers, Cramer said the rallies in the “big four” is notable. The bottom line, Cramer said, is that investors need to remember “panic is not a strategy.” Disclosure: Cramer’s Charitable Trust, the portfolio used by the CNBC Investing Club, owns shares of Salesforce. Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market. Disclaimer Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com