The New York stock market rebounded on Thursday, recovering from the previous day’s losses.
Nvidia, which had initially fallen despite reporting quarterly earnings that exceeded expectations, struggled to meet the lofty forecasts set by the market. However, the stock managed a recovery in the latter part of the session, helping lift other tech stocks.
Despite Nvidia’s rebound, the remaining M7 tech stocks ended the day lower.
Investor sentiment on Thursday shifted notably, with more focus moving from tech stocks to value and small-cap stocks.
Meanwhile, Bitcoin made headlines by surpassing $99,000, while software company MicroStrategy, known for its significant Bitcoin holdings, saw a sharp decline, driven by short-selling pressures.
Market Shifts: Tech to Value and Small-Caps
As investors shifted their attention, the tech sector faced a stumble.
The Nasdaq index, which is tech-heavy, rose slightly, closing up 6.28 points (0.03%) at 18,972.42.
The S&P 500, which includes a mix of large-cap and tech stocks, saw only modest gains as higher-priced stocks dominated the index’s weighting. It finished the day up 31.60 points (0.53%) at 5,948.71.
The Dow Jones Industrial Average, composed of 30 large blue-chip stocks, outperformed the other indices, surging 461.88 points (1.06%) to close at 43,870.35. This marked its second consecutive day of gains.
The Russell 2000, which tracks 2,000 small-cap stocks, saw the biggest rise of the day among major indices. It soared 38.48 points (1.65%) to 2,364.02.
Nvidia Gains Alone in M7 Rally
Of the leading M7 tech stocks, Nvidia was the sole gainer.
The company’s shares closed up $0.78 (0.53%) at $146.67. Despite initial disappointment in the market’s response to its strong earnings report, Nvidia recovered as Wall Street analysts quickly raised their price targets.
Wedbush, Mizuho, Citigroup, and Bernstein all raised their Nvidia price targets to $175, while JP Morgan set a new target of $170.
Analysts dismissed overheating issues with Nvidia’s next-generation AI chip, Blackwell, asserting that strong demand for the chip and an improved growth outlook would continue to drive the company’s performance.
Meanwhile, Alphabet faced a setback amid antitrust concerns. Reports that the U.S. Justice Department had proposed separating Google’s search engine from Chrome reignited fears of a potential breakup. Alphabet’s stock fell $8.35 (4.74%) to $167.63.
Tesla also continued its downward slide for a second day, dropping $2.39 (0.70%) to close at $339.64. Despite this, Tesla’s two-day decline was limited to just over 1.8%, and the stock has surged more than 39.8% since the election.
Apple dipped by 0.2%, Microsoft fell by 0.4%, while Amazon and Meta Platforms retreated by 2.2% and 0.4%, respectively.
Bitcoin Soars, MicroStrategy Plunges
Bitcoin made history on Thursday by surpassing $99,000, inching closer to the coveted $100,000 mark.
However, MicroStrategy, which holds a substantial amount of Bitcoin, saw its rally come to a halt. As of November 17, MicroStrategy owned 331,200 Bitcoins, nearly 1.6% of the total circulating supply.
A short-seller position from Citron Research triggered a sharp sell-off in MicroStrategy’s stock, which plummeted $76.55 (16.16%) to $397.28. The stock recovered somewhat in after-hours trading, climbing $16.72 (4.21%) to $414.00.
Thursday’s drop seemed a natural correction after the stock’s rapid ascent. Despite the fall, MicroStrategy’s stock has been up more than 78% since the November 5th election and has skyrocketed by nearly 530% year-to-date. The sharp decline is likely due to profit-taking by investors wary of the stock’s steep climb, with Citron’s short position as a catalyst.
Oil Prices Bounce Back
Global oil prices rebounded on Thursday after a three-day slump.
Although there were no significant supply-related developments, rising tensions between Russia and Ukraine helped push crude oil prices higher. News that Russia had launched an intercontinental ballistic missile (ICBM) at Ukraine heightened fears of potential disruptions to supply.
Brent crude, the global benchmark, rose $1.42 (1.95%) to $74.23 per barrel for January delivery.
West Texas Intermediate (WTI), the U.S. benchmark, settled at $70.10 per barrel for January delivery, up $1.35 (1.96%). WTI surpassed $70 for the first time since November 8.
