Jim Cramer Says Tuesday Rally Was Driven By Nvidia, Eli Lilly And Other 'Stocks Reacting Positively To Good Earnings Per Share News'

U.S. stocks experienced a rise on Tuesday following consecutive losses for the S&P 500 and Nasdaq.

What Happened: This positive turn occurred despite a slightly warmer-than-expected February consumer price index. As per CNBC’s Jim Cramer, the market’s gains were largely unrelated to the CPI, but instead tied to “a lot of stocks reacting positively to good earnings per share news.”

"We're getting lucky that the S & P is up like this," Cramer said.

JPMorgan CEO Jamie Dimon expressed optimism about the U.S. economy on Tuesday, suggesting the Fed should hold off on interest rate cuts until after June. While acknowledging the possibility of a recession, Dimon believes the market is pricing in a soft landing.

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Cramer echoed Dimon’s optimism, attributing positive equity movements to solid corporate earnings and ongoing interest in artificial intelligence. This was reinforced by Oracle’s ORCL strong quarter, attributed to AI strength, which boosted shares by approximately 11%.

Nvidia NVDA, Eli Lilly LLY, and Costco COST also saw gains on Tuesday, after suffering losses on the previous two trading days. Cramer, however, expressed concern about these stocks moving in unison, hinting at a potential risk to portfolio diversification.

As for Broadcom AVGO, which has not been tied to the group’s performance, Cramer sees a potential buying opportunity due to its attractive low multiple status.

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Why It Matters: Cramer’s recent observations align with his previous comments on the market. He has previously emphasized the growing wealth gap and its impact on the economy, highlighting the challenges faced by the average consumer in affording basic necessities and investing in stocks such as Nvidia.

He has also encouraged investors to gear up for a potential market sell-off and be ready to make purchases if undervalued stocks dip. Cramer has dismissed the notion of sector bubbles and emphasized the increasing artificial intelligence (AI) sector and the possible overvaluation of some AI stocks.

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