Monday’s rally reflects hopes for a new ‘path’ on tariffs, Jim Cramer says

CNBC's Jim Cramer dissected Monday's market action, attributing stocks' rebound to investors' hopes that a clearer future for global trade could be starting to form.
"What really matters is that there's a course of action that will allow foreign countries, or even individual foreign companies, to ameliorate tariffs," he said. "It's a path, and once you get a path, you get possible transparency and certainty. And that's what stock markets like."

CNBC's Jim Cramer dissected Monday's market action, attributing stocks' rebound to investors' hopes that a clearer future for global trade could be starting to form.

"What really matters is that there's a course of action that will allow foreign countries, or even individual foreign companies, to ameliorate tariffs," he said. "It's a path, and once you get a path, you get possible transparency and certainty. And that's what stock markets like."

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Wall Street displayed a more optimistic sentiment than has been common as of late, with the Dow Jones Industrial Average adding 1.42%, the S&P 500 advancing 1.76% and the Nasdaq Composite climbing 2.27%. While investors remain wary of President Donald Trump's tariff intentions, they were encouraged when he said Monday afternoon that he may give "a lot of countries" breaks on long-threatened reciprocal tariffs.

While Cramer did not rule out the possibility the president could return to more heavy-handed protectionist tariff policies, he said it seems Trump may have heeded the market's warning when it entered correction territory a few weeks ago. Trump appears to want to prevent solid companies' stocks from getting crushed, Cramer continued, alleging that the president's goal is to boost domestic production "even if it comes at the expense of cheap stuff from overseas."

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Major companies are beginning to make commitments to manufacture in the U.S., Cramer pointed out, including Stargate, Apple, Taiwan Semiconductor and Hyundai — which announced Monday it would invest roughly $21 billion in U.S. onshoring, including a steel plant in Louisiana. Cramer predicted some other foreign car makers will follow Hyundai's lead.

"Those are wins. Big wins," he said. "There's now a paradigm that companies can follow if they want have access to our markets."