Jim Cramer is sitting out the current market rally, citing excessive intervention and overbought conditions as key reasons to remain cautious.

Cramer Warns Against Chasing Current Market Momentum

CNBC’s “Mad Money” host Cramer wrote on X Tuesday: “Too many cross-currents, too overbought, too much intervention… sit back and watch. We sure aren’t buying anything unless it comes at a discount!”

The veteran investor’s comments come as U.S. stocks face headwinds despite recent gains. The Dow Jones, as tracked by SPDR Dow Jones Industrial Average ETF (NYSE:DIA) tumbled more than 300 points on Monday, falling 349 points to 45,282.47, while the S&P 500, as tracked by SPDR S&P 500 (NYSE:SPY) dropped 0.43% to 6,439.32.

Market Sentiment Remains in ‘Greed’ Zone Despite Volatility

The CNN Money Fear and Greed Index declined to 58.9 from 61.7 but remained in the “Greed” zone Monday. The index measures market sentiment on a scale from 0 to 100, where higher readings indicate excessive optimism that could signal overvaluation.

NVIDIA Corp. (NASDAQ:NVDA) gained 1% on Monday ahead of its highly anticipated earnings release this week. PDD Holdings Inc. (NASDAQ:PDD) reported strong fiscal second-quarter 2025 results, while American Woodmark Corp. (NASDAQ:AMWD), PVH Corp. (NYSE:PVH), and Okta Inc. (NASDAQ:OKTA) are scheduled to report earnings on Tuesday.

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Economic Data Shows Mixed Signals

New home sales fell 0.6% to 652,000 units in July, while the Chicago Fed National Activity Index declined to -0.19. Most S&P 500 sectors closed negative on Monday, with consumer staples, healthcare, and utilities leading losses.

Recession Risks Mount Across States

Moody’s Analytics Chief Economist Mark Zandi warned Sunday that states representing nearly one-third of U.S. GDP are either in recession or at high risk. He classified 22 states as “recession/high risk,” 13 as “treading water,” and 16 in “expansion.”

Zandi cited federal workforce cuts and policy headwinds, including tariffs and immigration restrictions as economic drags, stating “the economy is on the precipice of recession.”

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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