CNBC's Jim Cramer said Tuesday that the Trump administration's decision to remove some items from its new China tariffs list signals the president wants to halt the stock market's decline.

"I think this is the president saying, 'I don't want the stock market to go down any more,'" Cramer said as the Dow Jones Industrial Average rocketed from a down opening to a more than 400 point, nearly 2%, gain. After declines on Friday and Monday, the Dow had been down more than 5% from July's all-time highs before Tuesday's trading.

Shortly after the open on Wall Street, U.S. trade officials announced the removal of certain items from President Donald Trump's upcoming 10% tariffs on the $300 billion of Chinese imports not already taxed.

The U.S. trade representative's office also said that other items subject to the additional tariffs — set to go into effect on Sept. 1 — would be delayed until mid-December.

That delay list includes smartphones, and Apple shares surged about 5% on the reprieve.

At the same time, Chinese officials said Tuesday that they held a call with U.S. Trade Representative Robert Lightizer and Treasury Secretary Steven Mnuchin. China said it agreed to another call in two weeks.

"Everybody blinked," said Cramer, in characterizing the announcements from the U.S. and China, which have been locked in a yearlong trade war over what the White House sees as unfair business practices.

"This is exactly what the bears' worst nightmare is," Cramer said on "Squawk on the Street."

Stock market naysayers will still point to the threat of the 2-year Treasury yield inverting and going higher than the 10-year yield, the "Mad Money" host said.

Historically, such a move has signaled a recession. Other parts of the yield curve, the plot of U.S. interest rates based on maturity dates, inverted months ago.

However, the spread between the 2-year and the 10-year widened Tuesday, as investors bought up stocks and sold bonds whose price values move inversely to their yields. Later the spread narrowed again.