Cramer says the oil market is signaling the Iran war won't spiral — and that's bullish for stocks

CNBC’s Jim Cramer said the oil market may be signaling the war with Iran won’t cause prolonged disruptions to global crude supply — a dynamic that could help lift stocks beyond Wednesday’s rally.

"The oil market always seems to know everything,"Cramer said on “Mad Money,” pointing to a decline in major energy stocks as oil futures had by far their most tame session of the week.

Shares of Exxon Mobil closed down 1.3% Wednesday, while ConocoPhillips fell 2.4% and Halliburton dropping nearly 2%. Meanwhile, Brent crude, the global oil benchmark, settled flat on the day after jumping 6.7% and 4.7% on Monday and Tuesday, respectively. West Texas Intermediate crude, the U.S. standard, settled up a mere 0.1%. That came after gains of 6.3% on Monday and 4.7% on Tuesday.

“You don’t get Exxon, Conoco and Halliburton all down one or two percent if the Strait of Hormuz will really be closed for a long period of time,” Cramer said, referencing the critical shipping lane that handles a meaningful share of the world’s oil exports.

Cramer wondered whether oil market is behaving similarly to the start of Operation Desert Storm in the Gulf War in January 1991. At the time, many expected a lengthy conflict and sustained higher oil prices. Instead, crude fell shortly after the fighting began as the U.S. quickly overtook Iraqi forces.

If the Iran war doesn’t create a sustained spike in oil prices, that sharply diminishes the likelihood of an oil-driven spike in inflation that hurts the economy and stocks. The major U.S. stock indexes rallied Wednesday as that view took hold. The Dow Jones Industrial Average rose 0.5%, the S&P 500 gained 0.8% and the Nasdaq climbed 1.3%.

Beneath the indexes, Cramer said some stocks traded Wednesday as if the war will wind down faster than expected, pointing to more speculative names. He said he was also encouraged by the trading in major tech stocks including Amazon and Nvidia, which moved up 3.9% and 1.7%, respectively, Wednesday.

Additionally, he said the 4% gain in CrowdStrike shares Wednesday suggests investors may also be reassessing some of the most bearish assumptions about artificial intelligence destroying large swaths of the software industry.

Many software stocks have been crushed lately as investors worry that AI agents from companies such as Anthropic could replace traditional applications. But Cramer said the market may be starting to recognize a cap to that disruption, as evidenced by CrowdStrike getting credit for its strong quarterly results the night prior.

“We may have found the limits of software company destruction via Anthropic,” he said, adding that the shift in sentiment could lead to renewed interested in “buying of high-quality stocks after a war some that some still expect to be long and drawn out.”

Disclosure: Cramer’s Charitable Trust, the portfolio used by the CNBC Investing Club, owns shares of NVDA, AMZN and CRWD.

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