CNBC's Jim Cramer said Wednesday that the two most important forces in this market — the Federal Reserve and the technology sector — were both shocked “in a good way” this week.
The Fed kept interest rates steady on Wednesday and revised its outlook to one rate cut in 2024. But Cramer said this morning's “very low” Consumer Price Index reading came as a surprise to the Fed. The Consumer Price Index, a key inflation measure, rose 3.3% year-over-year in May, according to the Labor Department. That figure was down from 3.4% in April.
Cramer said the number was “completely out of sync” with what the Fed believed it would be seeing when it began yesterday's meeting. He said a rate cut likely wasn't even on the table before the CPI was released, so the positive news outweighed the Fed's negative expectations.
Cramer added that the tech market also surprised investors this week.
Apple shares closed up about 3% on Wednesday, extending their gains after rising more than 7% on Tuesday.
The company unveiled its long-awaited artificial intelligence efforts at its annual developers conference on Monday, unveiling a series of new AI features, including an overhaul of its Siri voice assistant. While the features weren't immediately well received, Cramer said the surge in support from buyers shocked Wall Street.
Cramer also pointed to Oracle, which closed up more than 13% on Wednesday. The company reported fourth-quarter results on Tuesday that fell short of analysts' expectations but showed strong demand for using its cloud to train AI models. Oracle's backlog is nearly $100 billion, according to a report.
“This is really incredible and confirms what the bulls have been saying all along: generative AI is real and it's awesome,” he said.
Cramer said both the Fed and the tech industry are taking a big hit and that investors stand to make “a lot of money” if they have their bets in the right stocks.
