Cramer's week ahead: Falling oil could help stocks but Fed is the next big test

Cramer’s week ahead: Falling oil could help but Fed is the next test Skip Navigation Markets Business Investing Tech Politics & Policy Video Watchlist Investing Club PRO Livestream Menu Key Points CNBC’s Jim Cramer said falling oil prices helped fuel Friday’s market rebound, but warned that renewed conflict in the Middle East could quickly reverse that relief. He said next week’s Federal Reserve meeting will be the next test for stocks, with investors closely watching how longer-term Treasury yields respond to a potential rate hike. In this article .DJI .SPX .IXIC US30Y Follow your favorite stocks CREATE FREE ACCOUNT watch now VIDEO 2:50 02:50 Wednesday's Fed decision will be pivotal moment for market, says Jim Cramer Mad Money with Jim Cramer CNBC's Jim Cramer on Friday said falling oil prices helped revive the stock market, but warned that next week's Federal Reserve meeting could quickly change the outlook for investors. "Thank heavens oil went down today," the " Mad Money " host said. "It changed everything." Stocks rebounded Friday as oil prices retreated , helping the major averages recover some of their losses after four straight down sessions. The Dow Jones Industrial Average traded 509 points higher, or 0.98%, while the S&P 500 and Nasdaq Composite gained 0.86% and 0.96%, respectively. Technology stocks helped lead the recovery, thanks to positive updates from Adobe and Oracle after the bell Thursday. Cramer said the reports breathed new life into beaten-down enterprise software and data center stocks, pointing to Dell , Vertiv , Cisco , Marvell , GE Vernova and Hewlett Packard Enterprise as potential beneficiaries. Cramer's Charitable Trust , the portfolio run by CNBC's Investing Club, owns shares of GE Vernova. With few major earnings reports on tap, Cramer said next week's market action will largely hinge on oil prices and interest rates. The first major variable is the war in Iran. Cramer said progress toward peace could send oil prices sharply lower, helping ease inflation and pressure on interest rates. But he warned renewed fighting could quickly reverse Friday's relief. "If Iran decides to attack a carrier group with drone swarms, though, then oil will spike, interest rates fly up, and the stock market will get clobbered," he said. Investors will also turn their attention to Salesforce's annual Dreamforce conference, which kicks off Monday in San Francisco. Cramer will interview CEO Marc Benioff on Wednesday and other executives at the event throughout the week. The biggest scheduled event comes Wednesday, when the Federal Reserve's Open Market Committee meets. Cramer said the consensus expects policymakers to raise rates to rein in persistent inflation. He will be watching how longer-term Treasury yields respond. The 30-year Treasury yield could actually fall following a rate hike, he said, if bond investors view Fed Chairman Kevin Warsh's decision as evidence of greater discipline on inflation. Still, Cramer warned that another rate hike would make an already difficult investing environment even tougher. "If the Fed tightens, the bulls will be fighting the Fed, and it's never a good idea to fight the Fed," he said, urging investors to be selective when putting cash to work and to avoid using margin. The impact of higher rates will also be in focus when Lennar reports after Wednesday's close. Cramer said stubbornly high mortgage rates continue to weigh on housing demand as homeowners with low existing mortgage rates remain reluctant to move. Restaurant company Brinker International and TurboTax parent Intuit hold analyst meetings Thursday. Cramer remains bullish on Brinker, the parent of Chili's, saying the company "never fails to wow me." He also pushed back against fears that AI will disrupt Intuit. Cramer pointed to the recent strength in Salesforce and ServiceNow as evidence that investors are becoming less willing to sell established software companies simply on the possibility that AI could threaten their businesses. Cramer's Charitable Trust owns shares of Salesforce. watch now VIDEO 12:08 12:08 The days of knocking down quality stocks on AI disruption fears is over, says Jim Cramer Mad Money with Jim Cramer Jim Cramer's Guide to Investing Click here to read Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest smarter Sign up now for the CNBC Investing Club to follow Jim Cramer's every move in the market. Disclaimer Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - Instagram Questions, comments, suggestions for the "Mad Money" website? [email protected] Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.