Cramer: Rising Rates Split Market, AI Stocks Largely Unaffected — SkimNews
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- Cramer said the 10-year Treasury yield briefly hit 5.365% on Wednesday, its highest level since April 2002, and compared the current market to his hedge fund days when investors waited on government bond auction results before buying stocks
- Wednesday's $39 billion 10-year Treasury auction drew strong demand and pulled yields off multidecade highs, but stocks still closed lower as the intraday yield spike spooked investors
- Cramer identified finance, housing, utilities, entertainment, retail, autos, and industrials as sectors where companies or their customers depend heavily on credit, leaving them directly exposed to higher borrowing costs
- Data center builders, semiconductor companies, power providers, and cybersecurity firms face far less borrowing constraint because lenders remain eager to fund their growth, Cramer said — a dynamic he blamed for the stock market's narrow leadership
- SpaceX is reportedly seeking to borrow $40 billion to purchase Nvidia chips and resell the resulting computing power to Google and Anthropic, and Cramer said he expects favorable terms despite the company's BBB credit rating because of AI enthusiasm
- Skydance, by contrast, recently issued a similar amount of debt to fund its acquisition of Warner Bros. Discovery and saw its bonds fall quickly as investors weighed cord-cutting and advertising pressure on the traditional media business
- Cramer called AI data center stocks "sainted," saying aside from maybe Oracle, they "have nothing to do with what price the Federal government borrows at" — only with "a future that's considered so bright that it obscures any problems, any bumps, even any pimples"
Why it matters: The 10-year yield briefly hit 5.365% — its highest since April 2002 — while AI stocks led the S&P 500 back to record highs, embodying the two-tier market Cramer described. Traditional bond issuers like Skydance are already paying the price, and the rate-dependent sectors Cramer flagged — autos, housing, retail, industrials — face the most direct exposure to elevated borrowing costs.
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