Apr 15, 2026
By every historical measure, stocks should be tanking right now. Oil prices have surged more than 50% since the US-Iran war essentially shut down the Strait of Hormuz, with Brent crude climbing 7.2% to $102 a barrel on Monday (1).
Energy shocks of this magnitude have historically dragged equities sharply lower. Yet, also on Monday, the S&P 500 closed at 6,886.24 (2) — its highest level since before the war began, having clawed back virtually all its war-related losses.
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CNBC's Mad Money host Jim Cramer addressed (3) this disconnect head-on, and his explanation comes down to interest rates — something most investors aren't paying enough attention to.
"I think I've been negligent in bringing up the power of low rates, because it's the reason the bulls keep winning when it seems like they should be slaughtered," Cramer said. "Let's not overthink it. If interest rates were spiking, this market would be very different."
Why rates matter more than rockets (for the market)
The mechanics of Cramer's argument are worth understanding as a personal finance matter: when interest rates rise, investors demand a lower price for every dollar of future corporate profits. This is called price-to-earnings multiple compression.
The reverse is also true. Falling or stable rates let investors justify paying more for stocks, even amid geopolitical chaos.
"What's the Strait of Hormuz have to do with the price-to-earnings ratio of Bristol Myers?" Cramer asked (3). "The answer is nothing."
The 10-year Treasury yield peaked on March 26 (4), and tellingly, Cramer notes (3), the S&P 500′s lowest close of 2026 came just days later, on March 30. Once bond yields rolled over, stocks followed upward. The sequence is the market's core valuation mechanism at work.
Monday's trading reinforced Cramer's point. "Beaten-up software stocks," including Salesforce and Microsoft (3), were among the strongest performers, while energy stocks most directly tied to the war in Iran lingered. Investors were reaching for growth, not defense.
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The Fed factor
Cramer also pointed to a coming shift at the Federal Reserve as a potential tailwind. Jerome Powell's term expires (5) in May, and President Donald Trump's nominee to succeed him is Kevin Warsh (6), a former Fed governor viewed by market watchers as someone likely to keep short-term rates steady or cut them.
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"As long as the rates don't move higher, the new Fed … certainly isn't going to raise short rates and they might even be able to bless us with [rate] cuts," Cramer said.
He also argued that the Fed may be inclined to look past current inflation pressures when it eventually moves. Elevated price readings tied to tariffs and energy costs could be treated as transitory rather than structural.
"The Fed will most likely asterisk these increases as all one-off price increases," Cramer predicted.
America's secret weapon
There's a further reason Cramer believes this oil shock may hit differently than past energy crises: natural gas.
While oil prices are set globally and vulnerable to supply disruptions in the Middle East, the U.S. produces enormous quantities of natural gas domestically, and U.S. natural gas prices remain dramatically lower (7) than international benchmarks, according to the U.S. Energy Information Administration.
American manufacturers and utilities rely heavily on this cheaper domestic fuel source, which acts as a buffer against oil-driven inflation.
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"Natural gas — not oil — is our secret weapon," Cramer said.
Vehicle fuel efficiency has also improved significantly in recent years, meaning consumers simply burn less gasoline per mile than in previous energy crises, which dulls the economic punch of high crude prices.
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What it means for your money
Cramer's broader message for everyday investors is to resist the urge to panic-sell every time a geopolitical headline hits the wire. The war in the Middle East is real and ongoing, but so is the market's underlying valuation logic, which is anchored to interest rates, not missile strikes.
"History is being disobeyed and ignored," Cramer said.
And the data backs him up: as Fortune noted (8), nine of the S&P 500's best 10 days since Trump's second term began were thanks to de-escalation signs on either tariffs or Iran — rewarding investors who held on rather than sold.
It's not that geopolitical risk doesn't matter. But it's when rates cooperate that the market has a remarkable ability to look past the noise.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
BNN Bloomberg (1); CNBC (2),(3),(6); Market Financial Content (4); CNN (5); U.S. Energy Information Administration (7); Fortune (8)
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With a writing and editing career spanning over 13 years, Emma creates and refines content across a broad spectrum of industries, including personal finance, lifestyle, travel, health & wellness, real estate, beauty & fitness and B2B/SaaS/tech. Her versatility comes through contributions to high-profile clients like Moneywise, Healthline, Narcity and Bob Vila, producing content that informs and engages, along with helping book authors tell their stories.
