Iran-US Conflict Is Not the Biggest Threat to the Bull Market! Cramer Identifies Two Major Risks: Investors May Run Out of Funds

As U.S. stock markets continue to hit record highs, financial commentator Jim Cramer warns that the true risks to this bull market are not escalating tensions between the U.S. and Iran, but rather the wave of corporate stock and bond issuances absorbing vast amounts of market capital, potentially straining liquidity and undermining the rally.

On CNBC’s 'Mad Money,' Cramer noted that while Wall Street remains focused on renewed U.S.-Iran tensions, he is more concerned about the rapid expansion on the supply side of the market. He pointed out that over the past month, companies have aggressively raised capital through equity and debt offerings, soaking up funds that were previously sitting on the sidelines awaiting investment opportunities.

He cited Alphabet (GOOGL-US) recently completing a major stock offering, SpaceX conducting an $85 billion IPO alongside a $25 billion corporate bond issuance, and Amazon (AMZN-US) and others announcing large-scale bond financing plans. While the market has so far absorbed these new supplies, Cramer believes investor capacity is nearing its limit.

Cramer expressed concern that signs of oversupply are already emerging. If corporations and investment banks do not moderate their fundraising pace, the bull market could be damaged.

Two recent transactions have particularly raised his alarm. First, Rivian Automotive (RIVN-US) conducted a discounted share issuance. Cramer interpreted this as evidence that the market is no longer willing to accept new shares at inflated valuations, signaling a shift toward more conservative capital appetite.

Second, South Korean memory giant SK Hynix (000660-KR) plans to list on Nasdaq, raising approximately $28 billion. Cramer warned that institutional investors participating in such a massive offering may need to sell existing holdings to free up capital, creating downward pressure on other stocks.

Nonetheless, Cramer believes the market has not yet entered a danger zone. He highlighted the semiconductor sector’s rebound on Wednesday, led by Nvidia (NVDA-US), as a key support for U.S. equities. Nvidia’s market cap had previously erased nearly $1 trillion from its peak, but recovered after reports emerged that China may allow certain AI firms to purchase limited quantities of H200 AI chips, lifting the broader semiconductor group.

Cramer emphasized that supply and demand remain balanced for now, with buyers still holding cash to absorb new issuance, meaning the bull market remains intact.

However, he cautioned that if companies continue issuing stocks and bonds at the current pace, this balance could quickly unravel. While not yet in crisis territory, a sustained flood of IPOs, follow-on offerings, and large fundraisings could push the market into oversupply territory.

Cramer suggested that if IPO and equity issuance activity cools and companies shift toward M&A instead of fundraising, the bull market could be extended. But if the next few weeks bring continued waves of new stock and bond supply, the rally may gradually lose support under relentless issuance pressure.