The stock market rebound on Wednesday was yet another example of panic being replaced by rationality, CNBC's Jim Cramer said.
"We forget why people fled from high quality stocks in droves yesterday, even stocks that had nothing to do with Italy," the "Mad Money" host said. "For the record, that's pretty much every American company having nothing to do with Italy, aside from a handful of players."
The Dow Jones industrial average rose 306.33 points, or 1.26 percent, closing at 24,667.78. The S&P 500 ended 1.27 percent higher and the Nasdaq composite rose nearly 0.9 percent.
The action followed Tuesday's selloff on concerns about Italy's political uncertainty.
The euro zone's third-largest economy has been without a government since an inconclusive vote in March. On Sunday, President Sergio Mattarella refused to accept the nomination of a euroskeptic candidate for economy minister. Instead, he appointed former International Monetary Fund (IMF) official Carlo Cottarelli as interim prime minister, rattling global markets.
Cramer believes there are five reasons the market came back on Wednesday.