Jim Cramer · U.S. Treasury · SpaceX · CNBC Technology
Cramer says higher rates are splitting the market in two, and AI stocks have a big advantage
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CNBC's Jim Cramer said Wednesday that rising borrowing costs are dividing the stock market into two camps: companies constrained by the bond market and artificial intelligence businesses that seem largely insulated from higher rates.
Key facts
- Still, stocks ended the day lower after investors were spooked by the benchmark 10-year yield briefly climbing to 5.365%, its highest level since April 2002
- According to a Financial Times report, Elon Musk's rocket and AI company is looking to borrow $40 billion to buy Nvidia chips for data centers and sell the resulting computing power, as it already
- Wednesday's $39 billion auction drew strong demand, helping bring Treasury yields off their multidecade highs earlier in the day
- The " Mad Money " host said Wednesday's 10-year Treasury note auction reminded him of his hedge fund days, when investors waited for the results of government bond sales before buying stocks
Summary
The " Mad Money " host said Wednesday's 10-year Treasury note auction reminded him of his hedge fund days, when investors waited for the results of government bond sales before buying stocks because a poorly received sale could send rates higher and equities lower. Wednesday's $39 billion auction drew strong demand, helping bring Treasury yields off their multidecade highs earlier in the day. "Any market where you need to wait to see the results of a Treasury auction is simply not as good as a market where you don't care about them," Cramer said. Higher rates can ripple across much of the economy.