Nasdaq 100 and Crypto Stocks: Bitcoin’s Rally Boosts Market Sentiment

What’s Driving the Market Today?

U.S. stock futures held steady on Thursday after a record-setting session, while Bitcoin surged above $100,000 for the first time, fueling a rally in crypto-related equities. Investors also digested mixed economic data and awaited Friday’s nonfarm payrolls report for further market direction.

How Are Crypto Stocks Responding to Bitcoin’s Surge?

Bitcoin broke through the $100,000 level in late Wednesday trading, gaining more than 3%. This historic milestone lifted crypto-related equities, with MicroStrategy advancing 8% and Robinhood Markets rising 6%. Other crypto stocks like Riot Platforms and Mara Holdings gained 6% and 5%, respectively. The move underscores the growing institutional adoption of digital assets as Bitcoin reaches new highs.

Which Sectors and Stocks Are Driving Market Action?

Retail and tech stocks showed significant premarket movements. Five Below surged 14% after posting better-than-expected earnings and revenue for the third quarter. ChargePoint rallied 11% on improved revenue figures and reduced losses. Conversely, American Eagle Outfitters tumbled 14% following weak holiday guidance, while Signet Jewelers plunged 15% due to disappointing earnings and revised full-year guidance.

In the cybersecurity sector, SentinelOne fell 15% after mixed quarterly results, while Synopsys dropped 8% on weaker-than-expected earnings guidance. Meanwhile, Hewlett Packard Enterprise gained 4%, bolstered by a Morgan Stanley upgrade citing an attractive near-term valuation.

What Economic Data Are Traders Watching?

Weekly initial jobless claims rose by 9,000 to 224,000, exceeding estimates of 215,000. Continuing claims, which track unemployment filings over a longer period, dropped by 25,000 to 1.871 million. Additionally, the October trade deficit came in lower than expected, reflecting stronger economic activity but adding potential inflationary pressures.

Federal Reserve Chair Jerome Powell signaled a cautious approach to rate cuts, highlighting the strength of the U.S. labor market and economic growth. Fed funds futures indicate a 78% likelihood of a quarter-point rate cut at the December meeting but suggest a 64% probability that rates will remain unchanged in January.

Market Forecast: Where Could the Market Be Headed Next?

The near-term outlook leans bullish, supported by Bitcoin’s momentum and record equity levels. Crypto-related equities may extend gains if Bitcoin sustains its rally. Broader indices are buoyed by optimism around economic growth and limited rate cuts, although rising jobless claims and mixed earnings could temper sentiment.

Upcoming nonfarm payrolls data will be a pivotal factor. A strong report may bolster bullish momentum, while weakness could spark consolidation. Traders should also monitor sector-specific volatility in retail and technology as key drivers of market action.

More Information in our Economic Calendar.