Cramer says the market can't broaden out due to uncertainty away from tech

Bryan Bedder | CNBC
  • CNBC's Jim Cramer on Thursday said tech stocks have been integral to the market rally, and other sectors can't quite say the same.
  • Cramer pointed to weakness in sectors like banking, health care, transport and food and beverage.

CNBC's Jim Cramer on Thursday said it's no secret that the market rally has been driven by a handful of tech stocks, and it's not likely to change anytime soon.



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Cramer said companies like Nvidia, Apple, Microsoft, Alphabet, Amazon, Oracle and now Broadcom have been integral to the rally. Broadcom shares closed up 12% on Thursday, a day after the chipmaker released second fiscal quarter results that beat analysts' estimates and announced a 10-for-1 stock split. It's also one of the companies benefitting from the artificial intelligence boom, Cramer added.

But while tech stocks have been shining, Cramer said other sectors can't quite say the same. It means the market might not be able to broaden out in the manner that many investors are hoping for.

For instance, Cramer pointed to the banks, which often serve as a bellwether for the market. He said this sector has been producing solid gains since last year when the Federal Reserve declared there would be no further tightening, but that streak ended when Huntington Bancshares cut numbers because of lower net interest income this week.

Cramer also pointed to weakness in health care and the transports. Trucking giant J.B. Hunt is down 20% for the year, and he said the rails like CSX, Norfolk Southern and Union Pacific have been "smacked down hard." Food and beverage stocks are also struggling, as companies like McDonald's, Molson Coors, Kraft Heinz, PepsiCo and others are down.

Those are the largest sectors in decline, though Cramer said he could have widened his net further. It's hard to know where the market would be without the tech sector, he added.

"Ask yourself, without the AI related tech names, where would we be?" Cramer said.

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