Cramer Says Higher Rates Split Markets as AI Firms Retain Easier Capital Access

Mad Money host Jim Cramer said Wednesday that higher borrowing costs are widening the gap between credit-sensitive industries and artificial intelligence companies that remain largely insulated from tighter financial conditions.

The 10-year Treasury yield briefly reached 5.365%, its highest level since April 2002, before stocks ended lower. Cramer said the $39 billion auction of 10-year Treasury notes reminded him how closely investors can follow government bond sales when deciding whether to buy stocks.

“Every time you add a new variable into the equation, it makes owning stocks tougher,” Cramer said.

He identified finance, housing, utilities, entertainment, retail, autos and industrials as sectors where companies or customers depend heavily on credit. Higher borrowing costs can make purchases more expensive and pressure businesses that need financing to operate or expand.

Cramer said AI-related data-center builders, semiconductor companies, power providers and cybersecurity firms face less pressure because lenders remain eager to fund their growth. He said those companies are crowding out other borrowers with their demand for capital.

The dynamic has helped produce a narrow market, with AI stocks helping lead the S&P 500 back toward record highs. Cramer said the group’s access to financing has separated it from much of corporate America, where higher Treasury yields have a more direct effect on borrowing costs.

Cramer cited SpaceX as an example of a company that could secure relatively attractive borrowing terms because of investor enthusiasm for AI and its planned data-center business. He said a comparable financing effort by a company without a data-center connection would likely face significantly higher borrowing costs.

He contrasted SpaceX with Skydance, whose bonds fell after the company issued debt for its acquisition of Warner Bros. Discovery. Investors weighed the pressure facing movie and television businesses, including cord-cutting and weaker advertising conditions.

The market split adds to earlier concerns about data-center expansion, which Cramer has said could create another pressure point for stocks if opposition slows infrastructure development.

“The rest of corporate America should be so lucky,” Cramer said.