Jim Cramer says the stock market is a ‘work in progress’ toward a rate cut

CNBC’s Jim Cramer reviewed Tuesday’s market action, suggesting to investors the moves might make for a precursor to rate cuts.

“You get a day like today, it’s a work in progress toward a rate cut, hence why we rebounded in the late afternoon,” he said. “We have days like today that are good setups for a rate cut, but that doesn’t give us enough evidence to truly move the needle.”

According to Cramer, there needs to be “weakness across the board” for the Federal Reserve to actually cut rates. He acknowledged that commodities have been lower over the past few days, and the labor department’s Tuesday report saw job openings dip in April to reach their lowest level since February of 2021.

Yet, all of this is not enough to point to a slowing economy, Cramer said. Friday’s nonfarm payroll report will be a more definitive gauge of the economy, he added, especially from the perspective of the Fed.

Cramer also stressed that market action can’t be explained in purely simple terms — even if such a fraught summation isn’t satisfying. The market is not a monolith, so reasons for action are seldom cut and dry, he added.

Cramer suggested that declines during Tuesday’s session can’t solely be attributed to falling oil prices or lower Treasury yields, pointing out that some blamed last week’s losses on higher yields and higher crude.

“I know, it’s prosaic. I know it lacks punch. It doesn’t make things simple,” he said. “But things aren’t simple, people, and if we try to make them simple, we get you confused.”