The US stock market is showing signs of recovery after a recent period of intense sell-off, thanks to actions taken by the Federal Reserve. GameStop (GME) saw a more than 4% increase in its stock price, extending its winning streak over the past four days. This surge follows a Christmas post by retail investor icon Keith Gill, also known as “Roaring Kitty,” which sent the stock soaring and continued its impressive run in 2024. GameStop has seen a remarkable 77% increase this year, making it one of the most closely watched stocks in the market currently.
While GameStop’s stock has been on the rise, crypto-linked stocks like MicroStrategy, Coinbase, and Riot Platforms have not fared as well. These stocks experienced a decline as Bitcoin took a nosedive, with MicroStrategy falling by about 3%, Coinbase dropping 2%, and Riot Platforms pulling back more than 2%. Despite this, MicroStrategy continues to double down on Bitcoin purchases, recently adding another $561 million to its holdings. This consistent buying streak, along with plans to issue more shares, shows their commitment to accumulating more Bitcoin.
Bitcoin itself has seen a 135% gain this year, outperforming gold and global stocks significantly. However, traders are preparing for potential significant fluctuations in the market due to the expiration of massive Bitcoin and Ether derivatives contracts. The broader crypto market has also been affected, with tokens like Ether, Solana, and Dogecoin experiencing around a 3% decline as Bitcoin’s price fell. Stock futures also followed suit, with the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 all experiencing declines in the morning trading session following the Christmas holiday.
The Santa Claus rally, a period known for market optimism, is still ongoing, albeit losing some steam. The S&P 500 has seen a 1.8% increase this week, while the Nasdaq surged 2.3%, driven by major tech companies like Tesla, Apple, and Alphabet. However, the Dow has only managed a 1% gain during this period. Jobless claims added to the tension in the market, with a lower-than-expected 219,000 initial claims for the week ending December 21, but a higher number of continuing claims reaching 1.91 million, the highest since November 2021.
Taking a broader view, the S&P 500 is holding onto a minimal 0.1% gain for December, while the Nasdaq has performed better, up 4.2% for the month. The Dow, on the other hand, is down 3.6%, on track for its worst monthly performance since April. If the Dow can maintain its current stability, it could break a three-week losing streak, the longest since March. The market sentiment can be described as uneasy, with uncertainties and fluctuations likely to persist in the near future.
In conclusion, recent developments in the US stock market show a mix of positive and negative movements, with GameStop emerging as a strong performer while crypto-linked stocks face challenges. The Santa Claus rally continues but is losing momentum, while uncertainty looms over the market due to potential significant changes in the crypto market and economic indicators. Investors and traders should stay vigilant and prepared for ongoing volatility in the market.
