- CNBC's Jim Cramer said President Donald Trump's Thursday morning tweet that suggested delaying the November election could cause problems for the stock market.
- "It sows chaos, and chaos is bad for the stock market," Cramer said on "Squawk on the Street."
- Dow futures extended their fall shortly after Trump's tweet, but then made back some of the decline.
"It sows chaos, and chaos is bad for the stock market," Cramer said on "Squawk on the Street."
Dow futures were down and then extended that drop slightly in the wake of Trump's tweet. They then made back some of the decline. The Dow fell more than 400 points in midmorning trading as investors also digested a record drop in U.S. GDP and the release of jobless claims data.
Trump does not have the power to delay the election by himself; presidential elections are set as the first Tuesday of November by a 19th-century law from Congress.
Nonetheless, the president suggested that delaying the election may be necessary because of the threat of the coronavirus pandemic.
Trump claimed that an increased reliance on mail-in voting would result in a fraudulent election — however, there is scant evidence to support the claim that it would lead to widespread voter fraud. Twitter in May fact-checked two of Trump's tweets that made a similar claim about mail-in voting.
In addition to the progress of the U.S. coronavirus outbreak, Wall Street also is focusing on the presidential election and its implications for economic policy.
Earlier this month, Goldman Sachs warned its clients that the election results could be delayed due to a larger share of the electorate opting for mail-in ballots, which can take longer to process. As a result, the investment bank advised clients to hedge their market exposures into December in expectation of increased volatility lasting through November. The election is set for Nov. 3.
Presumptive Democratic nominee Joe Biden leads Trump in an average of national general election polls, 50.1% to 41.7%, according to Real Clear Politics.
Cramer, who has noted the stock market likes certainty, said Trump's tweet Thursday appears to fit into a pattern from the president, "who seems to enjoy the notion of no stability."
"And then he likes to bring stability to the situation after he's sewn chaos," he said. "It's a constant theme of this presidency, and it's always amazing to me because you create this level of uncertainty and then you solve the uncertainty. It usually takes a full day to solve the uncertainty, and the market goes down that day."