On CNBC's 'Squawk on the Street,' Jim Cramer expressed concerns about the current market environment, highlighting a range of risks that could lead to further declines. The major indices opened lower, with the Dow Jones Industrial Average dropping over 400 points, the S&P 500 falling more than 1%, and the Nasdaq Composite declining about 2%.
Cramer noted that despite these declines, the market has held up better than expected, with the S&P 500 only 1.5% off its record high from June 2. A key concern is the surge in oil prices, with Brent crude exceeding $100 a barrel due to geopolitical tensions, which could reignite inflation and complicate the Federal Reserve's plans for interest rate cuts.
The probability of a rate hike has increased significantly, now at 38% for the upcoming meeting, up from 12% a week prior. Cramer also pointed to Alphabet's substantial costs associated with artificial intelligence investments, questioning the sustainability of such spending.
He expressed uncertainty about where additional funding for these initiatives will come from, suggesting that the corporate bond market may soon react negatively to these financial pressures