CNBC's Jim Cramer was amazed that stocks rallied hard less than 24 hours after Iran attacked military bases housing U.S. troops in Iraq.
The major U.S. indexes all surged 0.50% or more in Wednesday's session, one day after Iran launched more than a dozen ballistic missiles at U.S. and coalition targets. No Americans were injured in the attacks.
"With the averages staging a huge rally from last night's moment of crisis ... I marvel at this market's ability to overcome even the toughest of obstacles," the "Mad Money" host said after the market closed.
"So is this market being resilient ... or are investors being complacent? Why not both? I think it's a combination of these two forces," resilience and complacency, "and I think they've taken control."
Dow futures plunged 400 points on early reports of the strike Tuesday night, but the Dow Jones Industrial Average managed to climb more than 161 points to 28,745.09 by Wednesday's close after investors shrugged off concerns that the U.S. and Iran were sliding deeper into global conflict. The market moved higher as both nations signaled that they weren't seeking to instigate war.
While U.S.-Iran relations have been strained in the decades since the Iran hostage crisis in 1979, tensions spiked after President Donald Trump directed top Iranian commander Gen. Qasem Soleimani be killed in a drone attack Thursday. Iran's retaliation Tuesday night injected fear into the overnight market — that is, until more details rolled out, the market reversed and the "pajama traders" realized they had reacted too quickly, Cramer said.
"Like I've been telling you all week, de-escalation was always on the table, and that's exactly what both sides seem to be doing. ... If you were complacent going into the Iran crisis, that complacency paid off when the president demonstrated restraint," he said.
"We got some genuinely good news from individual companies, as well as some macro information, and that helps explain the market's resilience," he added.
The December ADP report revealed that 202,000 jobs, compared with the 150,000 estimate, were added in the private sector, a sign that the labor market is still humming. That strong number precedes the Labor Department's monthly jobs report, which is projected to come in at 160,000 new jobs on Friday.
Cramer said the Federal Reserve's three interest rate cuts last year are still reverberating in the real estate arena. Lennar, a leading U.S. homebuilder, beat Wall Street's estimates and reported new orders rose year over year by 23% in its fourth quarter. The stock rose nearly 1% on the news and lifted shares in other home construction companies.
Macy's shares surged more than 2% after the department store chain revealed that holiday sales dropped less than 1%, a smaller margin than the 1.75% same-store sales fall that analysts had predicted. The company also pledged to close dozens of underperforming stores. Cramer said the sales figure was "not as bad as feared" and could foreshadow good numbers from Nordstrom and, in addition to Lennar's report, Home Depot.
Apple's 1.6% gain provided some "reinforcements to keep the ball rolling" in the tech sector as investors eat up the consumer electronics news coming out of the CES conference in Las Vegas, Cramer added.
"All of these bullish notes create conviction, which creates resilience and causes the complacency that keeps potential sellers from selling," he said. "That's how stocks ... have a spectacular rally."
Disclosure: Cramer's charitable trust owns shares of Apple and Home Depot.