Jim Cramer Calls It A 'Manufactured Crisis' As Markets Plunge Despite Strong Earnings

As U.S. stocks continue to slide in spite of robust corporate earnings, CNBC's Jim Cramer says the downturn does not have much to do with fundamentals, and everything to do with political and economic chaos.

What Happened: Cramer said on Monday that the sell-off harks back to the 2011 Eurozone crisis, calling it "a very manufactured crisis — something man-made that can be un-made with the stroke of a pen." He observed that solid earnings are being overshadowed by outside factors.

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Why It Matters: With widespread anxiety over tariffs, increasing political pressure on the Fed, and impending debt ceiling battles, investors may disregard earnings entirely. "Earnings won't matter in this environment," Cramer said, warning of possible U.S. credit downgrades akin to 2011.

Unless leaders make efforts to stabilize sentiment, Cramer says markets will keep going downhill. "Long story short, we need to get used to a market that's down every morning because the earnings won't matter in this environment," he said. "It will be the tariffs and the talk about firing Jay Powell that define this period."

As of Monday's close, the Nasdaq 100 had fallen 19.86% from its record high of 22,222.61. The S&P 500 was down 16.09% from its peak of 6,147.43, while the Dow Jones sat 18.09% below its 52-week high of 45,073.63.

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