Market commentator and well-known television personality Jim Cramer expressed his frustration on Tuesday regarding the reactions in high-growth sectors, particularly artificial intelligence and cryptocurrency, to unexpectedly strong economic data. Cramer labeled the phenomenon a “big freakout” that seems never-ending, significantly impacting stocks like NVIDIA Corp. and those connected to cryptocurrency, quantum computing, and data centers.
Cramer criticized the market’s response, stating, “It is just stupid.” He emphasized the illogical nature of the situation, whereby strong economic numbers result in declines for stocks that are generally considered growth leaders. “The big freakout—never ends. You get a strong number and Nvidia and crypto and quantum and rockets and data centers go down. It is just STUPID,” he remarked.
This commentary came shortly after data indicated that the U.S. economy grew by an impressive 4.3% in the third quarter, significantly surpassing expectations of 3.3%. This represents the fastest rate of economic expansion since the third quarter of 2023. Typically, strong economic results temper expectations of imminent Federal Reserve rate cuts, which subsequently puts pressure on rate-sensitive assets like stocks. For instance, the CME FedWatch tool noted that the probability of a 25 basis point cut in January dropped from 19.9% to 14.4% within just 24 hours.
Even though several stocks from the so-called “Mag 7” cohort initially dipped during pre-market trading in response to the economic report, they managed to rebound and close higher during subsequent sessions. However, some leading cryptocurrency names did not fare as well. Stocks like Coinbase and Strategy Inc. ended in the red, a performance attributed more to Bitcoin’s volatility than to the broader economic data.
Here’s a brief overview of the stock movement during this tumultuous period:
- NVIDIA Corp. (NASDAQ: NVDA): Post gains of 3.01%, trading at $189.21.
- Microsoft Corp. (NASDAQ: MSFT): Increased by 0.40%, landing at $486.85.
- Amazon.com Inc. (NASDAQ: AMZN): Rose by 1.62%, closing at $232.14.
- Coinbase Global Inc. (NASDAQ: COIN): Fell by 2.26%, settling at $242.30.
- Rigetti Computing Inc. (NASDAQ: RGTI): Experienced a sharp decline of 6.58%, finishing at $25.11.
Interestingly, the shares of Nvidia had also faced a downturn during pre-market trading when another strong GDP report came out in August, reflecting ongoing volatility and concern in the tech sector.
