Jim Cramer warns against chasing stock market rally after China deal
- The U.S. and China reached an agreement to temporarily suspend tariffs, boosting market optimism.
- Jim Cramer warns of potential risks and advises against hasty investments despite market gains.
- Long-term market stability hinges on successful ongoing negotiations between the two countries.
On May 12, 2025, significant movements in the U.S. stock market were triggered by a weekend agreement between the U.S. and China to temporarily cut tariffs. This announcement, which generated optimism among investors, led to major indexes such as the S&P 500 and Nasdaq experiencing gains of over 2% and 3%, respectively. Companies notably affected included AI chipmakers like Nvidia and Broadcom, which saw their stocks rise by 4%, and other key players like Starbucks and Meta Platforms also reported increases in stock value. Jim Cramer from CNBC's Investing Club addressed the excitement surrounding this rally, emphasizing caution against buying impulsively after stock movements that may overlook underlying risks. He pointed out that while the cuts have had a beneficial initial impact, the returns should not be pursued recklessly as the market remains fraught with uncertainty about future developments in trade relations.