Investors buy tech stocks to hedge inflation, Fed rate hike, Jim Cramer says
Money managers began moving into tech stocks as a hedge against inflation and Fed rate hikes, CNBC’s Jim Cramer said Tuesday.
Rising raw costs led to a 5.4% increase in inflation last month, the biggest jump in consumer prices in more than a decade.
That triggered concern among some investors that the Federal Reserve could move to raise interest rates sooner than planned to address inflation, Cramer said.
“If you want one industry that’s immune to both inflation and a Fed-induced slowdown, well it’s big-cap tech,” the “Mad Money” host said after the market closed.
“Hyper-growth tech stocks are actually what works best during a slowdown.”
Despite the inflation number, the market barely reacted because Wall Street expected to see a jump in the consumer price index, Cramer said. The major U.S. averages all pulled back from record closes the day prior, with the Dow Jones Industrial Average falling more than 100 points.
Investors are also keeping an eye on the start of earnings season.
Reference: CNBC
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