The 10-year Treasury yield climbed to 5.34 percent on Tuesday, its highest level since 2007, as CME FedWatch futures priced a greater than 92 percent probability of a Federal Reserve rate hike. The S&P 500 closed down 0.2 percent at $7,635.
The hawkish repricing arrives despite President Donald Trump's consistent calls for lower interest rates, setting up potential conflict with Federal Reserve Chair Kevin Warsh. Warsh has held two meetings since his May 2026 swearing-in, leaving rates unchanged in both instances.
Jim Cramer cautioned investors against forecasting Fed moves too far ahead, calling such predictions a "parlor game." Cramer argued that bond yields and oil prices—not Fed speculation—are the actual market drivers. Club portfolio director Jeff Marks noted that earlier predictions of rate cuts under Warsh proved incorrect.
The 30-year Treasury yield rose to 5.35 percent in one week from 5.24 percent, widening duration risk for high-multiple equities while offering bond buyers locked-in returns at elevated levels.
Shares of Intel and Micron gained modestly Tuesday, rebounding from Monday declines triggered by Anthropic CEO Dario Amodei's weekend letter advocating a slowdown in artificial intelligence development. Cramer maintains buy ratings on both names. His Charitable Trust added Micron shares Monday after the semiconductor sell-off stabilized.
Cramer expressed skepticism about a significant slowdown in AI development during a Monday evening discussion with Broadcom CEO Hock Tan. Cramer's Charitable Trust holds positions in Intel, Broadcom and Micron.
