‘History is being disobeyed’: Jim Cramer says the Iran war should be slaughtering stocks, but the US has a ‘secret weapon’

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.

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.

"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.

"Natural gas — not oil — is our secret weapon," Cramer said.