CNBC’s Jim Cramer said the bond market gave stocks a reprieve on Tuesday, but corporate earnings will dictate if stocks can continue to snap back from the worst trading day this year.
“It’s the actual sales and earnings numbers from the companies reporting right now that will determine if this move’s got staying power, even if the bond market throws us a curveball,” the “Mad Money” host said after the major averages rallied hard on Tuesday.
“When a company surprises to the upside … it’s mighty hard to keep that stock down,” he said.
The Dow Jones Industrial Average jumped almost 550 points, one of the biggest single-day gains it made this year. The 30-stock index plummeted more than 700 points the day before as bond yields dropped and fears spread of a Covid-19 resurgence.
The S&P 500 and Nasdaq Composite also both shot up more than 1.5%.
U.S. Treasury yields also rose during the session as the 10-year Treasury yield bounced from a five-month low it set Monday. Lower bond yields tend to support higher prices in stocks.
“I do think there are enough people out there taking their cue from the bond market that it could propel the whole stock complex higher,” Cramer said.
“Today was a terrific reminder that interest rates can go higher, too, especially when they’ve come down to ridiculously low levels,” he added.
