Investors have reason to stay optimistic about the market in the long run if the Federal Reserve continues to hold interest rates and there's hope that a trade deal with China will come through, CNBC's Jim Cramer said Tuesday.
The major indexes soared during the session before losing their gains after news broke that China could walk back some concessions. The Dow Jones Industrial Average shed 0.10 percent, the S&P 500 slipped 0.01 percent, and the Nasdaq finished up 0.12 percent.
But Cramer said people are wrong to believe that the market's recent strength "was based on a leap of faith."
"The run this morning had a lot more to do with a leap of taste, meaning money managers were buying the stocks of high-quality companies because their stories are meatier than the average investor may realize, even as they threw away other stocks that need good news on trade to go higher as the session moved on into the late hours," the "Mad Money" host said.
Cramer reviewed some stocks of the day and explained how they could fend off trade and global growth headwinds.