Your Stocks Could Feel the Fed's Rate Hike Next, Jim Cramer Warns

What happened

Jim Cramer said the impact of higher interest rates is his big fear for the stock market right now. He raised this concern about two weeks after the Federal Reserve resumed hiking rates, during a Thursday review of the third quarter.

Confirmed

Global impact / market context

Higher interest rates raise borrowing costs for companies and consumers, which can reduce spending on new equipment and slow profit growth. Because stock prices often reflect expected future profits, rate increases can pressure the value investors place on shares.

Analyst inference

Cramer's warning arrived as software stocks rebounded and chip names cooled, making the software comeback the quarter's defining story. His fear is that broad rate increases could now weigh on stock prices across parts of the market beyond those sectors.

Analyst inference

What to watch

1. Watch whether the Federal Reserve continues raising rates after it resumed hiking two weeks before Cramer's warning. Confirmed
2. Watch company borrowing costs for signs that rate increases reduce capital spending, which means money businesses spend on new equipment and expansion. Analyst inference
3. Watch whether stock prices broadly react to higher rates, since Cramer flagged this as his big fear for the market now. Analyst inference

Evidence

• beincrypto.com