Stocks fell Tuesday but traded off lows after Federal Reserve Chairman Jerome Powell assured investors the central bank was a long way from scaling back its ongoing support of the U.S. economy.
TheStreet's Katherine Ross and Jim Cramer discussed breaking news in the stock market. Cramer spoke about the deal between Lucid Motors and Churchill Capital Corp. IV, Powell's testimony and markets on Tuesday.
Churchill Capital (CCIV) tumbled Tuesday following reports of the $24 billion merger between the special-purpose-acquisition company and electric-vehicle maker Lucid Motors.
Cramer said this is a move about the recognition that there will come a time when the SPACs will be too rich for the public and won't be able to hold their value. "That's what happened. The stock Churchill Capital got too hot. It got too close to the sun. It's coming back almost as if Cathie Woods is buying it."
Fed Chairman Testimony
Federal Reserve Chairman Jerome Powell testified in Congress on the health of the economy Tuesday. “The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,” Powell said, reiterating a pledge to keep up buying bonds at the current pace.
Cramer said Powell understands that we're in a situation where he cannot start increasing interest rates. "When you look at the economy more and more people are being left behind and it is Jake Powell's job to worry about them more than it is to worry about if the stock market may go higher."
Markets on Tuesday
The Nasdaq sank 1.8% and fell 243 points to $13,289 at the last check.
Cramer said Nasdaq is following a pattern that he discovered from the end of 2015 to 2016. "That's a period where you had a tremendous decline in the Nasdaq because the economy accelerated."