Jim Cramer Says Moody's Downgrade Is 'Early Warning To Invest More...Of What You Can Save'

After Treasury Secretary Scott Bessent, it was Jim Cramer’s turn to dismiss the impact of Moody’s downgrade of the U.S.'s top-notch sovereign credit rating. 

The CNBC Mad Money host said on Monday that the bad news that broke late Friday was merely a “get out now” story that prompted investors to sell their perfectly fine portfolios. This is because investors are conditioned to be fearful, he said.

The stock picker opined, "Fear is what must be tamed, if you want to be a good investor.”

Cramer also advised investors against taking the downgrade as a sell signal, adding that they should think, “You are being given an early warning to invest more, not more aggressively, but more of what you can save. That’s the real hedge if you’re worried about the government’s creditworthiness, not the ‘get out now.’”

For those investors nervous over the downgrade, he recommended Bitcoin (BTC.X) and gold as hedges against excessive government spending.

Recalling that the market fell due to S&P’s downgrade in 2011 and Fitch’s in 2023, Cramer said the current downgrade triggered more fear than the short-term economic environment warranted.

After the market reacted to Moody’s downgrade with a steep downward move Monday morning, it clawed back the losses before ending modestly higher for the session.

Reflecting investors’ worries, the 10-year Treasury note yield spiked past the 4.50% mark in the morning before pulling back. 

Cramer slammed those issuing “get out now” calls, describing them as “either fools who know nothing or incredibly shrewd short sellers who need to spread fear because of their business model.”

Some of the recent buy recommendations from the stockpicker include Universal Technical Institute (UTI), Rocket Labs USA (RKLB), Cisco Systems (CSCO), CAVA Group (CAVA), and Zoom Communications (ZM).

Cramer has been a Nvidia (NVDA) bull for a long time now. Commenting on CEO Jensen Huang’s Computex presentation, he said, “Go listen to Jensen. It's on the website. It's quite heartening.”

The Invesco QQQ Trust (QQQ) ETF, an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index, is up 2.3% for the year, and the SPDR S&P 500 ETF (SPY) has added 1.8%.

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