GoKawiilCNBC's Jim Cramer said Friday that stock investors need to remember the bond market is in the driver's seat at the moment — a dynamic that looms large ahead of key earnings reports next week.
"The bond market's wrath can smackdown any stock market no matter how robust," said the "Mad Money" host.
On Friday, Treasury yields jumped higher as oil prices surged after President Donald Trump told Fox News that he is "not going to be much more patient" with Iran, adding that "they should make a deal." Concerns about inflation also diminished hopes for interest-rate cuts from the Federal Reserve, Cramer noted.
"We need a tame bond market for stocks to keep advancing, which means we need oil to come down, and that's not happening unless we get an end to the war," he said.
Cramer said that in addition to triple-digit oil and one-year highs for the benchmark 10-year Treasury yield, signs of speculative excess in recent IPOs require a more cautious stance toward equities.
"You know haven't been a doomer...I haven't been a bear at all. But a smart bull needs to recognize when the facts change and I'm very worried that we're headed for the kind of reckless flood of IPOs that always leads to heartbreak," Cramer said. "We aren't there yet. But we need to be wary of the possibility and we need to protect our gains."
With that, Cramer turned to the week ahead.