The role of the Fed in the bankruptcy of the SVB turned positive for equities, says Cramer

Thanks to the Federal Reserve, the collapse of Silicon Valley Bank finally turned out positive for the stock market, CNBC’s Jim Cramer said Wednesday.

Regulators closed SVB earlier this month after savers had withdrawn billions almost overnight. Cramer said the Fed was focused on fighting the “war on inflation” but soon had to turn its attention to the “immediate financial crisis” caused by the SVB.

“If you go through all the fallout from the SVB bankruptcy, they end up breaking positively, not negatively, for the stock market — all because of the Federal Reserve,” Cramer said.

As a result, he said investors have turned to the Wall Street playbook on what to buy when there’s an economic slowdown without inflation: tech stocks.

“The bottom line? This market may be mindless, but it has a muscle memory that says reach for technology in a slowdown,” Cramer said. “The Silicon Valley Bank fiasco was just the oxygen the tech bull needed to get out of his funk and get back to work.”

Cramer pointed to Apple, Meta and Nvidia as examples of companies that are “cash-packed” and don’t need to tap the stock or bond markets. He said people also tend to turn to stocks like Caterpillar or Illinois Tool Works because investors assume they will experience a slowdown in orders.

“The beauty of trying to figure out which stocks to buy in this new scenario is that they’ve already been chosen for you,” said Cramer.