Daily Market Update: Stock and Crypto Markets Bounce Back From Fed Selloff

TLDR

• Bitcoin recovered to $93,000 on Thursday after dropping to $89,000 following the Federal Reserve’s rate cut decision on Wednesday
• Altcoins like Cardano and Avalanche fell 6-7% while Ethereum dropped 3%, not participating in Bitcoin’s recovery
• The Nasdaq closed down only 0.25% after being down 1.5% earlier, with the Dow and S&P 500 reaching new record highs
• Silver surged 5% to a new all-time high of $64 per ounce while gold climbed over 1% near $4,300
• Stock futures showed mixed results overnight with Dow futures up 0.2% while Nasdaq futures fell 0.2%

Bitcoin managed to recover from early Thursday losses to trade above $93,000 by the end of the U.S. stock market session. The cryptocurrency had fallen to $89,000 earlier in the day following the Federal Reserve’s rate cut announcement on Wednesday.

The recovery in Bitcoin came alongside a similar bounce in traditional markets. The Nasdaq managed to close down just 0.25% after being as much as 1.5% lower during morning trading.

The Dow Jones Industrial Average gained 1.3% on Thursday, reaching a new record high. The S&P 500 also closed at a record level with modest gains. However, the cryptocurrency market showed different behavior from equities.

Altcoins did not follow Bitcoin’s recovery pattern. Cardano’s ADA token fell 6-7% on the day. Avalanche’s AVAX also dropped by a similar amount.

Crypto Market Diverges From Traditional Assets

Ethereum traded 3% lower, holding above the $3,200 level. The weakness in alternative cryptocurrencies contrasted with Bitcoin’s ability to reclaim the $93,000 price point.

Jasper De Maere from trading firm Wintermute pointed out that only 18% of trading sessions in the past year saw Bitcoin outperform the Nasdaq on days with major economic news. Wednesday’s action fit this pattern, with equities rallying while crypto sold off.

De Maere said the rate cut appeared fully priced into crypto markets. He added that marginal easing from the Fed is no longer providing support for digital assets.

Precious metals posted strong gains on Thursday. Silver surged 5% to reach a new all-time high of $64 per ounce. Gold climbed over 1% to trade near $4,300.

The U.S. dollar index fell to its weakest level since mid-October. This decline helped support the rally in precious metals.

Stock Futures Mixed Overnight

Stock futures showed mixed movement in overnight trading. Dow futures gained about 0.2% as the blue-chip index looked to build on its record close. S&P 500 futures traded relatively flat.

Nasdaq 100 futures fell about 0.2% in overnight action. Wall Street is positioning for the end of the trading week with all three major indexes seeking weekly gains.

Investors rotated out of high-growth AI stocks on Thursday. Oracle’s earnings report disappointed markets and led to selling pressure in technology names. Google and Nvidia shares moved lower during the session.

The Dow’s 650-point rally came from strength in other sectors. Visa stock jumped during the session. Nike and UnitedHealth Group also posted solid gains.

Broadcom shares slipped nearly 5% in after-hours trading despite beating earnings estimates. The company issued an upbeat outlook and projected AI-related chip revenue would double. Lululemon surged roughly 10% after hours following news that CEO Calvin McDonald will exit at the end of January.

Analytics firm Swissblock noted that downward pressure on Bitcoin appears to be losing steam. The firm said the market is stabilizing but not yet confirmed as recovered. They observed that the second wave of selling was weaker than the first wave.

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