Jim Cramer says he sees a parallel between market conditions in 2026 and those that preceded 2018’s brutal stock selloff. The CNBC host stopped short of predicting a full repeat.
On his CNBC show, Mad Money, he mapped out the parallels investors are watching. Then he explained how he thinks people should position for what comes next.
A 2018 Parallel Emerges
Both 2018 and 2026 fall in the second year of a Trump term. Stocks rallied hard in both periods.
Oil prices and Treasury yields climbed in 2018, and they are climbing again now. Inflation also sits above the Federal Reserve’s target in both periods.
Back in 2018, the S&P 500 fell roughly 20% between its September peak and Christmas Eve. A hawkish Powell helped trigger that slide.
The index recovered fast. Powell then cut rates three times, and the S&P 500 closed 2019 up close to 30%.
This time, the pressure sits with Fed Chair Kevin Warsh, who took over from Powell in May. Oil trades near $100 a barrel, and the 10-year Treasury yield is approaching 5%.
Traders now price rate hike odds near 90% for this month’s Fed meeting.
Trim, Don’t Sell
Cramer isn’t calling for investors to exit the market.
“I’m not saying you should just sell everything because history’s going to repeat itself.”
Instead, he wants people to trim winning positions and raise cash.
His own Charitable Trust has pushed cash into the mid-teens as a share of the portfolio. That is higher than usual. A bigger cash pile gives him room to buy quality stocks back if prices fall.
Cramer thinks Warsh is unlikely to repeat Powell’s 2018 mistakes. He also thinks markets understand this administration’s pressure on the Fed better than they did in 2018.
Still, he called the parallels eerie enough to watch. History may not repeat exactly, he said, but it could rhyme.
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