Jim Cramer says investors should be ‘playing the waiting game’ until the Fed makes a move

As Wall Street braces itself for the results of Friday's labor report, CNBC's Jim Cramer told investors not to make any major moves and listed off certain mistakes that he thinks many are making.
"We're just playing the waiting game, with all extremes off the table," he said. "Sometimes it's okay just to sit on your hands, watch some football, hey, even read a book—anything other than trading, at least until we get more clarity from the data and the Fed."

As Wall Street braces itself for the results of Friday's labor report, CNBC's Jim Cramer told investors not to make any major moves and listed off certain mistakes that he thinks many are making.

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"We're just playing the waiting game, with all extremes off the table," he said. "Sometimes it's okay just to sit on your hands, watch some football, hey, even read a book—anything other than trading, at least until we get more clarity from the data and the Fed."

The S&P 500 closed down for the third day in a row, dipping 0.3%, while the Dow Jones Industrial Average shed 0.54%. And after rising as much as 1.2% earlier in Thursday's session, the tech-heavy Nasdaq Composite gained 0.25%. The Labor Department's nonfarm payroll report on Friday is expected to heavily inform the Federal Reserve's interest rate policy decision, with investors eagerly waiting for the central bank to issue cuts.

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Some on Wall Street are worried the Federal Reserve will not facilitate a smooth transition out of the tightening cycle, Cramer said. But according to him, these fears are not warranted because the central bank is competent, and Fed Chair Jerome Powell has "a game plan" and should get the benefit of the doubt.

Cramer also said it's too early for Wall Street to decide that artificial intelligence-oriented companies are on the outs, as "we're only a couple of years into finding use cases" for the technology. He suggested that the peak of AI innovation isn't necessarily chat bots and noted that generative AI shows promise in fields like healthcare. Investors are also too aggressive right now, he added, noting the way megacap tech stocks opened Thursday's session up significantly but did not sustain those gains.

"People keep making a ton of mistakes here when they really should just be sitting on their hands. Sometimes the best you can do is absolutely nothing," Cramer said. "Instead, they're acting out every possible fantasy and nightmare when it comes to the market, and not only is it tedious and foolhardy, it's very expensive for anyone who's running with this non-strategy."