CNBC's Jim Cramer reviewed Tuesday's market-wide decline, attributing much of the pullback to some investors' worries about inflation in the run-up to new employment data. 'We have too much inflation in the system. The Fed can't do anything about it because it just cut rates. The Fed's in a bind. It can't help us,' he said.'So we're at the mercy of macro numbers that are going in the wrong direction…That's not a good place to be.
' The market closed sharply lower, with the tech sector hit especially hard. Tuesday also saw two economic surveys come in higher than expected, suggesting inflation remains persistent, and long-term interest rates rose. Investors are anticipating Friday's nonfarm payroll data, a key inflation metric for the central bank. The Fed made three consecutive cuts towards the end of 2024, but after the latest meeting, it signaled it may pause further reductions. Cramer stressed that this market is unpredictable, saying that usually when interest rates shoot up, all stocks head lower. But Tuesday saw top performers in Big Tech get dinged, while bruised sectors like drugs, oils and transports actually saw gains, he said. Cramer also said investors can be too quick to flee tech stocks when inflation anxiety heats up, saying these stocks are actually poised to do well in an inflated environment. However, he cautioned against buying heavily into this weakness with labor data coming so soon. If employment and wages rise, or President-elect Donald Trump says mass deportations are on the horizon — which could cause mass wage inflation — the market will get crushed, especially tech stocks, Cramer continued
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