Prominent market commentator Jim Cramer on Tuesday proposed a six-point checklist of events that must occur before the market sell-off ends.

Major Wall Street indices closed over 2% lower on Tuesday, posting their worst trading session of 2023, as a rebound in U.S. business activity sparked investor concerns about the possibility of prolonged rate hikes. The S&P Global Index of Purchasing Manufacturer returned to expansion for the first time in eight months in February, Reuters reported. The SPDR S&P 500 ETF Trust SPY closed down 2.01% on Tuesday during the Invesco QQQ Trust Series 1 QQQ fell 2.37%.

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The checklist: Cramer pointed out that the downturn may not just be a flash in the pan, after to a CNBC report. For the sale to end, he believes the following six things should happen:

1. The accelerated rise in Treasury yields should slow.

2. Anomaly stocks that are trading disproportionately high should fall.

3. Recession-Resistant Stocks Like PepsiCo, Inc. PEP And Merck & Co Inc MRK have to fight back. Cramer believes such a movement is on the way.

4. Banks should stabilize. Cramer believes that banks could create a lot of value by coexisting with higher interest rates, provided they don’t suddenly rise.

5. Retailers should identify the industry winners and losers.

6. The market should be much more oversold as measured by the S&P oscillator.

“Now that we have disheartening data on the inflation front, much of the buying has to be, well, reversed. That’s why the sale is so aggressive,” Cramer said.

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Photo: Courtesy of Scott Beales on Flickr