Jim Cramer says these 'Pavlovian trades' are the stocks that benefit when oil spikes
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- Trump announced reinstating a blockade on Iran in the Strait of Hormuz, sending WTI crude up 9.4% to settle above $78/barrel and Brent crude up 9.6% to just over $83.
- Jim Cramer dubbed the resulting sector rotation 'Pavlovian trades,' pointing to stocks that historically benefit when gasoline prices rise.
- Valero Energy was Cramer's top pick as a 'pure play' on tight refining capacity; shares jumped roughly 5% on Monday.
- Dow Inc. was highlighted for using cheaper domestic energy while Persian Gulf competitors face disruption; shares rose more than 4%.
- Mosaic was cited as a fertilizer beneficiary that becomes the low-cost producer instantly if Gulf production shuts down; stock gained nearly 4%.
- Walmart and TJX Companies were Cramer's discount-retailer picks over dollar stores, with Walmart up nearly 1% and TJX down about 0.5% — against a down day for the S&P 500 (-0.8%) and Nasdaq (-1.5%).
Why it matters: Cramer's playbook spotlights four sector winners — refiners (Valero +5%), domestic-energy chemical producers (Dow +4%), low-cost fertilizer makers (Mosaic +4%), and discount retailers — that historically outperform when oil jumps double-digits. With the S&P 500 down 0.8% and Nasdaq off 1.5% the same day, the rotation toward these defensive names is particularly stark.
