Jim Cramer states that the market’s surge offers insight into which stocks are worth purchasing.

As the tensions between the U.S. and Iran eased, CNBC’s Jim Cramer indicated that the significant surge on Wednesday highlighted which stocks investors ought to consider purchasing as conditions become more stable and which ones to steer clear of.

“Reviewing these rankings of top and bottom performers reveals what is valuable when things settle down and what is completely off-limits,” Cramer mentioned on “Mad Money” Wednesday.

“When the market faces another downturn, you’re aware of what the professional money managers will gravitate toward. It’s an excellent method to identify what could elevate your portfolio and what’s simply a futile pursuit,” he remarked.

Cramer’s insights followed a surge in stocks prompted by President Donald Trump‘s announcement regarding the temporary halt of U.S. strikes on Iran for two weeks. This truce brings a measure of relief in a five-week conflict that resulted in Iran shutting down the Strait of Hormuz, a crucial passage for global energy resources. Nonetheless, Cramer noted that uncertainties still linger regarding the sustainability of the ceasefire and the various aspects that require clarification in a more extended deal.

Nonetheless, the Dow Jones Industrial Average climbed 2.85%, the S&P 500 improved by 2.51%, and the Nasdaq surged by 2.8%. West Texas Intermediate crude prices plunged over 16% to $94.41 per barrel, while Brent crude for June delivery tumbled approximately 13% to $94.75 per barrel.

Notable gainers within the Dow during the Wednesday surge included Sherwin-Williams, Caterpillar, Home Depot, and Goldman Sachs, as noted by Cramer.

“That’s a quite impressive group of leaders,” Cramer commented. “When you observe these four ascending, it indicates that investors are optimistic regarding a decrease in interest rates.”

The yield on the 10-year treasury, closely linked to 30-year mortgage rates, also saw a significant drop on Wednesday. Cramer has previously stated that lower rates are essential for revitalizing the sluggish housing market and could bolster the overall economy while benefiting stocks such as Home Depot, which reached a two-year low on Tuesday.

Caterpillar, which surged 6.51%, is another example of “how fantastic this market can be,” Cramer remarked. “It’s been incredibly resilient because the company has various avenues for success,” further stating that this is another firm that gains from lower interest rates, which result in reduced financing costs for construction projects.

Regarding Goldman Sachs, Cramer outlined numerous reasons to invest in this bank’s stock as market conditions improve. “A surge of deals is anticipated as the [Trump] administration is highly supportive of dealmaking,” Cramer stated. Goldman Sachs is set to report next week, and Cramer foresees a positive outcome.

Concerning the underperformers in Wednesday’s rally, Cramer expressed that it was expected to see oil firms like Chevron and Diamondback appearing on this list. The lack of performance in stocks such as Salesforce and Workday suggests that investors have not overlooked the risks posed by AI disruption, according to Cramer.

Other significant decliners included plastic manufacturers such as Dow Inc, although Cramer warned that issues related to Middle East supplies may take time to resolve.

“I’m not certain how easy it will be to just abandon these,” Cramer concluded.

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