Cramer Identifies Three Forces That Could Prolong Nasdaq's Slump

Jim Cramer warns that the Nasdaq's steepest monthly decline since March 2025 may not mark the end of the tech downturn, with the U.S. midterm elections, a choice on Iran, and a jobs report all due within days.

Friday's drop of 2.86% concluded a 5.30% October retreat for the Nasdaq Composite. Cramer sees emerging cloud companies as at risk if control of Congress shifts, while oil producers and refiners would gain from increased Iran tensions.

Could Tuesday's Ballot Reshape the Data Center Business?

Cramer gave a brief preview of the week during a CNBC interview.

“Some crazy volatility, a lot of emotion.”

The Nasdaq Composite ended trading on Friday at 25,437.

He said a Democratic victory in both houses could roll back recent constraints on green energy initiatives.

But his main anxiety revolves around data center politics, since candidates who resist expansion could derail projects already embedded in projections.

Newer cloud companies — businesses built around data center capacity — face outsized risk because they lack other revenue streams to buffer a hit.

History leans the opposite direction, though. Deutsche Bank strategist Jim Reid pointed out that the S&P 500 advanced in 21 of the last 23 three-month stretches around midterm elections.

Separately, Fundstrat's Tom Lee suggests that one compelled seller may be behind October's decline.

Will Iran and Oil Add More Pressure?

Cramer stated that Trump is due to decide on Iran by Wednesday.

However, Trump said in October that the U.S. would not strike Iran before Nov. 3, according to Reuters.

Cramer warned that an uptick in conflict would raise oil prices and entrench inflation.

He ranked Chevron (CVX) first and Valero (VLO) second among those positioned to profit.

The monthly U.S. nonfarm payrolls report lands on Friday. Cramer expects solid job growth but limited wage increases.

In contrast, the September report posted a gain of only 29,000 jobs.

He said that the wage reality and a week of subdued tech profits help clarify why bonds have stayed calm.

Chip stocks had already fallen for eight straight days by mid-October, under pressure from doubts about AI spending and interest rate worries.

For the AI sector, this week tests whether data center construction faces political obstacles beyond earnings concerns.