Markets Update, January 6, 2025: S&P 500, Nasdaq Surge with Nvidia and Chip Stocks; Bitcoin Breaks $100,000
Markets Update, January 6, 2025: S&P 500, Nasdaq Surge with Nvidia and Chip Stocks; Bitcoin Breaks $100,000
On Monday, the S&P 500 and Nasdaq Composite experienced their second consecutive day of gains due to a rally in chip stocks. Additionally, bitcoin surpassed $100,000 for the first time in nearly three weeks.
The Dow Jones Industrial Average experienced a fractional decline, while the S&P 500 and Nasdaq experienced 0.6% and 1.2% increases, respectively. All three major indexes concluded the day at significantly lower levels than their previous highs. Stocks experienced substantial gains on Friday, ending a weeklong losing streak. The S&P 500 registered losses for the week, marking the third occasion in four weeks that it has done so, as the momentum of the post-election rally has waned despite the gains.
After contract electronics manufacturer Foxconn reported record fourth-quarter revenue on Monday, chip equities experienced a surge, primarily due to the rise in demand for AI technologies. Micron (MU) shares increased by 10.5% to lead the S&P 500 gainers, while ASML Holding (ASML) shares increased by 7.6%, and KLA Corp. (KLA) shares increased by 5.1%. The VanEck Semiconductor ETF (SMH) experienced a 3.3% increase.
Ahead of CEO Jensen Huang’s highly anticipated keynote address at a significant consumer electronics trade show in Las Vegas on Monday evening, shares of the AI chipmaker and investor favorite Nvidia (NVDA) surged by 3.4% to a record closing high.
Other large-cap technology stocks were up across the board on Monday, with Meta Platforms (META), the parent company of Facebook and Instagram, leading the way with a 4.2% increase. Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Tesla (TSLA), and Broadcom (AVGO) also experienced growth.
Super Micro Computer (SMCI), a server manufacturer, advanced 9.4% after gaining over 10% in the previous session, among other notable movers. Microsoft’s announcement on Friday that it intends to allocate approximately $80 billion this fiscal year to data centers that facilitate AI positively impacted sentiment. The significance of Nvidia’s graphics processing units (GPUs) in Supermicro’s most advanced servers could also be bolstered by positive news from the chipmaker.
The Nasdaq’s top gainers were MicroStrategy (MSTR), which saw a nearly 12% increase in its shares. MicroStrategy is one of the world’s largest holders of Bitcoin. After announcing on Friday that it would raise capital through a share offering to enhance its balance sheet and enable it to purchase more digital currency, the company announced on Monday that it had bought more bitcoin for the ninth consecutive week.
In the most recent trading session, Bitcoin was trading at $102,100, marking its most excellent level in nearly three weeks and a significant increase from its previous low of approximately $98,000. Since the election, the digital currency has increased by approximately 45% due to investor optimism that a pro-crypto Trump White House and Congress will implement policies advantageous to the asset class.
The yield on 10-year Treasurys, which is correlated with expectations regarding the direction of interest rates, increased from 4.60% at the end of last week to 4.62%. The December jobs report is scheduled for release on Friday, and investors anticipate its release in anticipation of potential implications for the Federal Reserve’s interest rate decision later this month.
Gold futures declined by 0.3% to approximately $2,650 per ounce, while WTI crude oil futures declined by 0.7%.
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