November 21, 2024

S&P 500: Tech Stocks Rally as Nvidia Recovers and Bitcoin Hits $98K

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Daily Bitcoin (BTCUSD)

Bitcoin surged past $98,000 for the first time late Wednesday, boosting sentiment across cryptocurrency-related equities. Factors driving the rally included heightened expectations for crypto-friendly regulatory policies under a potential second Trump presidency and short liquidations exceeding $88 million overnight.

Crypto-related stocks followed suit. MicroStrategy, often seen as a Bitcoin proxy, rose 11%, while Coinbase added 4%. Mining companies like Mara Holdings and platforms like Robinhood also gained significantly, up 9% and over 3%, respectively. The rally’s momentum was fueled by high funding rates in futures markets and reduced premiums in spot trading, signaling sustained bullish activity.

Mixed Economic Data Highlights Labor Market Stability

Initial jobless claims for the week ending November 16 fell to 213,000, beating forecasts of 220,000 and signaling ongoing resilience in the labor market. However, continuing claims rose to 1.908 million, above the expected 1.883 million, suggesting potential early signs of strain.

Meanwhile, the Philadelphia Fed’s regional manufacturing index dropped sharply to -5.5 in November from +10.3 in October, undershooting expectations of +6.9. This decline reflects emerging economic headwinds despite the overall strength in employment metrics.

Snowflake surged over 21% on strong third-quarter results, reporting $0.20 adjusted earnings per share on $942 million in revenue, surpassing estimates.
Palo Alto Networks fell 2% after providing inline guidance and announcing a 2-for-1 stock split.
BJ’s Wholesale Club rose nearly 8% after raising full-year guidance and initiating a $1 billion share buyback program.

Market Forecast

The combination of Nvidia’s recovery and Bitcoin’s historic rally has reinvigorated risk appetite, likely propelling tech-heavy indices higher in the short term. However, mixed economic data points to potential volatility ahead. Traders should monitor upcoming economic reports and Fed commentary for further direction. A cautiously bullish outlook appears warranted, particularly in tech and crypto-related sectors.

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