Jim Cramer Says 'Sit Tight' As China Tariff Pause Creates 'Game Of Chicken' That Could Steamroll Market Timers

CNBC's Jim Cramer urges investors to grab the armrest, not the eject button, after Washington and Beijing agreed to slash punitive duties for 90 days on Monday.

What Happened: “It's better to stay in, stay on and let her ride than to try to pick the perfect moment to trade in and out of the stock market,” Cramer said, according to a CNBC report. “That's not much of a strategy. It's much more a game of chicken where there are no winners,” he added.

Cramer noted how quickly traders reversed recession bets that had dominated screens only a week earlier. Tech names expected to bear the brunt of tariff pain soared — Apple AAPL leapt 6.2% and Nvidia NVDA rose 4%, helping the Philadelphia Semiconductor Index climb 5.9%. The buying spree spilled into industrials and banks.

"Safety" plays told the other side of the story. Gold slid more than 3%, and the dollar strengthened against the yen and Swiss franc as haven demand evaporated.

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Cramer warned that short-sellers angling for a quick reversal could get steamrolled. "We see how easily stocks can rally — isn't it a little dangerous to be that short?" he asked, arguing that Monday's pop proved policy shocks can rescue battered portfolios faster than traders can reposition.

Why It Matters: Wedbush analyst Dan Ives called Monday’s stock surge a "dream scenario" for tech investors. The Trump administration’s move to back off from its tariff regime against China also gained praise from an “encouraged” Former Treasury Secretary Larry Summers.

The Dow Jones Industrial Average — as tracked by the Dow Jones Industrial Average ETF DIA — surged 2.8%, or more than 1,100 points. By mid-afternoon, it reached 42,385 — its second-best day in the past six months, eclipsed only by the 7.8% rally on April 9 when President Donald Trump announced the tariff suspension.

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