The U.S. stock market surged this week after President Donald Trump announced a two-week pause on strikes against Iran late Tuesday, but analysts and commentators are warning investors not to get ahead of themselves. The S&P 500 closed Friday up 3.6% for the week, while the Nasdaq Composite and Dow Jones Industrial Average jumped 4.7% and 3%, respectively — each index's best weekly performance since November.
CNBC's Jim Cramer cautioned that the market has become "incredibly overconfident" in the wake of the ceasefire news. "The idea that everything will finally go right in the Middle East seems like a real stretch to me," the "Mad Money" host said. He pointed to Trump's Thursday warning that Iran "better stop now" if it continues charging fees to oil tankers transiting the Strait of Hormuz as evidence of how quickly the situation could deteriorate.
That fragility was echoed by Richard Haass, former president of the Council on Foreign Relations and now at Centerview Partners. Haass warned that while the U.S. is expected to hold talks with Iran aimed at reaching a broader agreement, expectations should be tempered. "The war shows just how much leverage Iran has," he said, noting that Tehran's position is far stronger than it was before the conflict began.
Cramer urged investors not to make any sudden moves, saying the market is not at a "make or break moment" despite the uncertainty. "There's no systemic risk here that I can see, something that could bring down the whole entire edifice," he said. Still, he emphasized that the ceasefire's tenuous nature — combined with Iran's ability to "shut down the most important commercial waterway on earth in a heartbeat" — should give bulls pause.
Looking ahead, Cramer said corporate earnings will take center stage next week, with Goldman Sachs reporting Monday and JPMorgan, Wells Fargo, Citigroup, and Johnson & Johnson all due Tuesday. He predicted solid results from Goldman, whose trading desk stands to benefit from recent market volatility, but warned investors to brace for cautious commentary from JPMorgan CEO Jamie Dimon.