Jim Cramer Says Fed Rate Cuts Don't Help Tech Stocks

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Fed Rate Cuts,Tech Stocks,Jim Cramer

CNBC's Jim Cramer argues that the Federal Reserve's interest rate cuts primarily benefit companies reliant on consumer spending and don't significantly impact tech stocks. He asserts that large tech companies are focused on AI automation and enterprise solutions, making them less dependent on lower rates.

CNBC's Jim Cramer said the Federal Reserve's interest rate cuts hinder tech stocks because the companies don't necessarily stand to benefit from lower rates.

"With a double-sized rate cut that everybody already expected, you aren't gonna see a huge run in tech. It doesn't have the edge when we get the big cuts," he said. "Right now, the Fed's helping companies that need a healthy consumer or else.

"With a double-sized rate cut that everybody already expected, you aren't gonna see a huge run in tech. It doesn't have the edge when we get the big cuts," he said. "Right now, the Fed's helping companies that need a healthy consumer."by half a point and indicating it would cut by 50 more basis points by the end of the year.

Consumer-oriented companies may be the ones to own during this cutting cycle, Cramer suggested, even though tech stocks can still be winners with rates coming down. According to Cramer, Wall Street abandons these secular stocks for ones that rely on lower rates, and there's only "so much cash to go around." He added that investors make a distinction between companies that do well most of the time and ones that can perform extremely well during certain points in the business cycle.

"On days like today, we want the companies that desperately needed a rate cut, because they just got what they wished for," Cramer said. "But tech? It got out of the wish game a very long time ago."

 

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