Speculation Driving Market's 'Big Run,' Jim Cramer Says

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Stocks are in the red Tuesday as investors pulled back following the historic rally on Wall Street that saw the S&P 500 claw back all its losses for the year

U.S. stocks finished higher Monday and the Nasdaq closed at a record high on optimism about the strength of the economic recovery. The Dow gained 461 points, or 1.7%, to close at 27,572, rising for the sixth consecutive session. The S&P 500, which rallied to its highest level since February, closed up 1.2%.

The gains have been fueled in part by trillions of dollars in central bank and government support and hopes for a so-called V-shaped economic recovery from the coronavirus pandemic.

This follows the Federal Reserve's rate-setting committee meetings Tuesday and Wednesday. The Fed is expected to keep rates near zero and not issue any major policy decisions. However, Fed-watchers will be curious to see whether May's employment data has changed the body's economic projections.

The Fed will announce its decision on interest rates Wednesday afternoon followed by a press conference from Federal Reserve Chairman Jerome Powell.

So, what does Jim Cramer think?

He says that the stocks that are doing well are now the stocks in the green, which is different than how it's been in the last few days of the rally, where stocks that were doing poorly were up.

You can follow Jim Cramer and Katherine Ross on Twitter at @JimCramer and @byKatherineRoss. Read more from Katherine Ross here.

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