Cramer Says Banking Stocks Turmoil Looks Like 'Train Wreck' For Wall Street — But Market Won't Be Destroyed If Debt Ceiling Crisis Is Resolved

Market commentator Jim Cramer reportedly said the mayhem in bank stocks may feel like a looming "train wreck" for Wall Street, but as long as the debt ceiling crisis is taken care of, it won't destroy the market.

What Happened: "I believe we'll have more mayhem like we saw the last time this happened in 2011, where the real issue is whether the ratings agencies downgrade the U.S. debt, not what's happening in Congress," Cramer said, according to a CNBC report.

Also Read: Best Penny Stocks

The market expert also pointed out that he isn't optimistic about a deal and said even if a deal is reached, it will arrive in the eleventh hour. By then, the market will likely have fallen, he noted.

"So why not wait to do some buying? Well, if we clear tomorrow's labor report hurdle, then the market will rally," Cramer said. "If we do rally short-term, I recommend taking some profits and then steeling yourself for the debt ceiling fiasco, and then you can buy more," he stated.

Price Action: U.S. markets ended in the red on Thursday as concerns regarding the banking sector gained momentum following PacWest Bancorp's PACW move to explore strategic options. PacWest shares closed over 50% lower while Western Alliance Bancorporation WAL shares lost over 38% on Thursday.

The SPDR S&P 500 ETF Trust SPY closed 0.71% lower while the Invesco QQQ Trust Series 1 QQQ lost0.35%.

According to Cramer, the debt ceiling crisis is just one of four major hurdles for the market right now. However, if concerns about the issue are cleared, that should pave the way for a much more upbeat market, the expert said.

Read Next: Apple, Carvana, Coinbase, DraftKings, Block: Why These 5 Stocks Are Drawing Investors’ Attention Today