Jim Cramer Tells Investors To Stay Selective Amid Rally: 'Understand Difference Between Hype And Hope Versus Cold Hard Reality'

Prominent market commentator Jim Cramer expressed surprise at the market movement on Tuesday and said investors should stay selective with stocks despite the market's strong run.

"It's insane that so many people seem to believe the Fed will go from slamming the brakes on the economy to hitting the gas within a matter of months," Cramer said according to a CNBC report.

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On Tuesday, Federal Reserve Chair Jerome Powell, in his discussion at The Economic Club of Washington, D.C., acknowledged once again that the disinflationary process has begun. He, however, also stated that the central bank would have to raise rates more than what is priced in if the labor market remains strong and inflation remains high.

U.S. equity markets witnessed a see-saw movement as investors and traders held on to every word spoken by the Fed Chair. Major indices, however, ended the session in green. The SPDR S&P 500 ETF Trust SPY gained 1.29% while the Invesco QQQ Trust Series 1 QQQ rose 2.07%.

"I just want you to have a real earnings cushion with real buybacks or real dividends — ideally both — and I can't feel comfortable recommending anything without them," he said according to the report.

Investors should be aiming to pick up shares in "rational, old-line companies," he said.

"What matters here is that you understand the difference between hype and hope versus cold hard reality. I like the industrials like DuPont or Linde because they're all about reality," he stated according to the report.

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Photo: Courtesy of Scott Beale on Flickr