CNBC host Jim Cramer raised alarm bells over the state of the stock market following President Donald Trump’s tariff announcement, which triggered a sharp decline last week.
During Friday night’s broadcast of Mad Money, Cramer warned that the market could face a “Black Monday” as trading resumed.
The stock market took a significant hit right after the opening bell on Thursday when Trump revealed his new tariff policy, leading to a nearly 1,700-point drop by the close of the day. The fall intensified after China unveiled retaliatory tariffs, causing futures to plummet further.
By the end of Friday’s session, the Dow had fallen another 2,200 points, and futures, along with international markets, continued to spiral over the weekend, setting the stage for more losses when the market opened on Monday.
As of Monday afternoon, the Dow Jones had fallen 867 points to 37,447 points, or 2.26 per cent, while the S&P 500 is off 94 points to 4,979, or almost 1.9 percent.
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“It might be The Big Kahuna!” he said, referring to October of 1987, when the market dipped exceedingly low for three days —Wednesday, Thursday, Friday — only to drop even harder on the following Monday. The markets fell 22 percent on ‘Black Monday.’
Black Monday might be a likely plight if the president doesn’t try to reach out and reward these countries and companies that play by the rules. Thanks to the employment numbers last week, Cramer pointed out that it is less likely a crash will lead to a recession.
“But if President Trump stays intransigent and does nothing to ameliorate the damage that I saw these last two days, I’m not gonna be constructive here,” Cramer said on Friday. “I will contain my anger, but only because I lived through 87, and in the end, I came out okay. I was in cash for the crash. I know what this feels like.”
The CNBC host continued that while he is teetering on anger now, what could really flip the switch to “furious” could be if Europe moves against U.S. tech companies—something Cramer warned should not happen, adding “None of this has to happen.”
Consequently, the Mad Money host presented network viewers with a “game plan” for this week. He stated that if Trump decides to stand on the sidelines while Europe creates deadly reciprocal tariffs against American tech companies, there is a good chance for a crash.
“I want to be very methodical and not unemotional. We’re very chance it will crash,” he said. “It could be like Black Monday.”
However, should Trump realize what would be best for “our companies,” then there is a thin glimmer of hope as “we could have a rebound.”
