A diagnosis said many U.S. stocks are failing to gain traction as key sectors and the broader funding market have effectively entered a frozen state.
CNBC reported on Sept. 30 local time that Jim Cramer said activity across the market is slowing due to high interest rates, geopolitical uncertainty and political variables, and that investors should not rush to leave the market.
Cramer said the forces that lift markets have weakened. The U.S. housing market has been unable to break out of a sluggish trend for years, and initial public offerings and mergers and acquisitions have also slowed. He said even data center investment, long seen as a strong sector, is running into political concerns over power costs and community impact. “Every market is freezing right now, and it is killing stocks,” he said.
He cited the housing market as the most representative example. Rates on 30-year mortgages have risen to about 7.5 percent recently from around 3 percent about five years ago. He said transactions are blocked as homeowners with existing low-rate loans find it difficult to move or have less incentive to do so. “With mortgage rates nearing 7.5 percent, the burden of buying a home has become the highest in 40 years,” Cramer said.
The housing slowdown is spreading across related stocks. Homebuilders Lennar and KB Home and retailers Home Depot and Lowe’s all hit 52-week lows on the 30th. Fewer home sales also weaken demand for appliances, furniture and remodeling. Whirlpool also set a 52-week low the same day.
Wall Street investment banks are also under pressure. Cramer pointed to smart ring company Oura delaying a planned $2.2 billion IPO and Inspire Brands, the parent of Dunkin’ Donuts and Buffalo Wild Wings, also postponing a listing. As IPOs and mergers fell, investment bank shares that rely heavily on fee-based businesses also weakened. Morgan Stanley and Goldman Sachs shares have each fallen about 12 percent in September, and their year-to-date highs were formed in July. “If there are no IPOs or mergers, big banks effectively freeze outside of fees,” he said. “That alone is not enough.”
He said the data center sector, which had driven growth expectations, is not an exception. He said growing political concerns over electricity rates and various ripple effects could slow the pace of new development. He also cited as a burden that this is a year when Democrats and Republicans compete for control of Congress ahead of the U.S. midterm elections.
Cramer said these headwinds could turn into tailwinds at any time. He cited the possibility of an end to a war as the biggest variable. If the war ends, oil prices and inflation could fall, and the Federal Reserve could have room to drop the possibility of additional rate hikes, he said. He said such changes “could happen in three days, and they could be the most important three days in 2026,” adding, “That is why I hesitate to leave the market now.”
The point to watch is whether economic activity starts to thaw again. If key pillars of the market such as home transactions, capital markets and data center investment revive at the same time, the scale of a stock market rebound could be larger. “If the economy thaws again, a bull run will unfold,” Cramer said.