CNBC’s Jim Cramer said the bond market gave stocks a respite on Tuesday, but corporate earnings will dictate whether stocks can continue to rebound from the worst trading day this year.
“It is the actual sales and profit figures of the companies that are reporting that determine whether this move has stamina, even if the bond market throws us a curve ball,” said the Mad Money host after the major averages on Tuesday strongly recovered.
“When a company surprises up … it’s very hard to keep this stock down,” he said.
The Dow Jones Industrial Average rose nearly 550 points, one of the biggest single-day gains this year. The 30-share index plunged more than 700 points the day before as bond yields plummeted and fears of a Covid-19 resurgence spread.
The S&P 500 and the Nasdaq Composite also both shot up more than 1.5%.
US Treasury yields also rose during the session as 10-year Treasury bond yields rebounded from a 5-month low on Monday. Lower bond yields tend to support higher stock prices.
“I think there are enough people out there looking to the bond market that it could drive the entire stock complex up,” said Cramer.
“Today was a great reminder that interest rates can go up too, especially when they have dropped to ridiculously low levels,” he added.