CNBC's Jim Cramer on Monday said panicked buying drove Wall Street to record levels as institutional investors grappled with headwinds that have not hurt the domestic economy as much as once thought.
Uncertainties surrounding an impeachment inquiry into President Donald Trump, recession signals in the bond market, inflation and tariffs have contributed to a volatile trading environment, he said.
Those same impediments, however, helped the market spring to new highs, he added.
"These obstacles are exactly what makes a bull market thrive," the "Mad Money" host said. "They cause investors to go negative and then, as the averages rally, these same people come back in at higher levels, sending us still higher."
Stocks continued to trade higher in Monday's session as optimism grows around U.S.-China trade, strong economic data and better-than-expected earnings.
The Dow Jones Industrial Average joined the S&P 500 and Nasdaq Composite in the record-highs party after rallying more than 114 points to close at 27,462.11. It was the 30-stock index's highest finish since July.
The S&P and Nasdaq, on the other hand, have made multiple closing highs within the past week. The S&P finished the trading day at 3,078.27 to mark its fourth record since last Monday. The tech-heavy Nasdaq ended the day at 8,433.20 for its second record close in as many trading days.
Panicked buying, triggered by fear of missing out, causes stock prices to rise exponentially as investors put money to work. That's contrasted with panicked selling, which is associated with fear and causes market sell-offs.
"The panicked money managers ... represent the fuel that this market needs to go higher, and right now this rally [has] fuel in spades," Cramer said.
The Dow is up nearly 18% year to date. The S&P 500 has climbed almost 23% and the Nasdaq has expanded roughly 27% in that same span.