Trump Trade Boosts Stocks, Bitcoin Run At $100,000: Markets Wrap

Stocks ended the day higher as traders contemplated a new US administration keen on deregulation. Bitcoin blew past $98,000 while the dollar gained and Treasury yields rose.

The S&P 500 advanced 0.5% after a choppy morning session spurred by swings in Nvidia Corp. and angst about the war in Ukraine. The Nasdaq 100 climbed 0.4% after dropping more than 1% earlier in the day.

The fierce rally in Nvidia hit a speed bump following outlook that missed Wall Street’s high expectations. The stock resumed its climb in the final hours of trading to end the day in the green but shy of its latest all-time high.

Bitcoin extended its post-election run and is rapidly approaching $100,000 on bets President-elect Donald Trump’s support for crypto and looser regulation will usher in a boom for the industry. The planned departure of Securities and Exchange Commission Chair Gary Gensler is expected to give a boost to deregulation and digital assets. A report suggested Chris Giancarlo, a former chairman of the Commodity Futures Trading Commission, was being weighed as the first “crypto czar” under the incoming administration.

Trump’s pick to overhaul the Justice Department, Matt Gaetz, withdrew himself from consideration of the post amid sexual misconduct allegations. Uncertainty over who Trump will name to the top spot at the Treasury remains up in the air and weighed on US bonds.

“The contest for the Treasury Secretary appears to have come down to Bessent, Rowan, and Warsh – all of whom fall into the category of qualified adults in the room,” according to BMO’s Ian Lyngen. Though, “clarity is always preferable from the market’s perspective.”

Yields on the 10-year Treasury steadied at 4.42% and the dollar rebounded after mixed labor data. Jobless claims came in lower than expected while continuing claims, a gauge of the number of people receiving benefits, rose to a three-year high.

Among notable stock movers, Snowflake Inc. surged more than 30% while shares of MicroStrategy Inc., the largest publicly traded corporate holder of Bitcoin, sank on a short-seller report from Andrew Left’s Citron Research.

Strategists at market research firm Fundstrat expect US stocks to climb into the US holiday week, followed by some weakening in December.

“The Nvidia earnings report leaves the likelihood of a Thanksgiving rally intact,” they wrote. “The AI trajectory has not changed all that much, but the market’s immediate reaction is less important than the fact that the uncertainty over Nvidia’s results is behind us.”

To Tom Essaye, founder of The Sevens Report, this week’s conflicting reports from Walmart Inc. and Target Corp. suggest some restraint from American consumers, who should be watched closely.

“The state of the labor market and consumer spending are indicative of a soft landing and that’s a good thing,” the former Merrill Lynch trader said. “But they are also vulnerable to deterioration from here and if that occurs, then a hard landing becomes substantially more likely and that would be a decided negative for stocks.”

Housing is another worry as mortgage rates in the US started climbing again with the average for a 30-year fixed loan 6.84%, up from 6.78% last week.

Escalations in the Russia-Ukraine war gave oil and gold prices a boost, pushing WTI crude futures to around $70 a barrel. Ukraine reported that Russia fired an intercontinental ballistic missile during an overnight attack, while a Kremlin spokesman called Kyiv’s earlier use of UK Storm Shadow missiles a new escalation. 

“Geopolitics always has a potential of introducing volatility in the market and we have seen that with what is happening in Ukraine,” Themis Themistocleous, chief investment officer, EMEA at UBS Wealth Management told Bloomberg Television. “We have been advising clients to include oil into their portfolio, or derivatives of oil, to be able to hedge against potential volatility.”

• Eurozone HCOB Manufacturing & Services PMI, Friday

• US University of Michigan consumer sentiment, S&P Global Manufacturing & Services PMI, Friday

Some of the main moves in markets: 

Stocks

• The S&P 500 rose 0.5% as of 4 p.m. New York time

• The Nasdaq 100 rose 0.4%

• The Dow Jones Industrial Average rose 1.1%

• The MSCI World Index rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro fell 0.6% to $1.0480

• The British pound fell 0.4% to $1.2596

• The Japanese yen rose 0.6% to 154.50 per dollar

Cryptocurrencies

• Bitcoin rose 3.7% to $97,967.01

• Ether rose 8.8% to $3,350.97

Bonds

• The yield on 10-year Treasuries advanced one basis point to 4.42%

• Germany’s 10-year yield declined three basis points to 2.32%

• Britain’s 10-year yield declined three basis points to 4.44%

Commodities

• West Texas Intermediate crude rose 2.2% to $70.24 a barrel

• Spot gold rose 0.8% to $2,671.67 an ounce

This story was produced with the assistance of Bloomberg Automation.