S&P500 Turns Positive After Whipsaw Trading, Bitcoin Up 8%

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Key Takeaways

• Stocks reverse course on Thursday and end mostly higher, Bitcoin up 8% in two days
• European markets move sideways early Friday, US futures marginally in decline

S&P500 Turns Positive

The S&P500 advanced Thursday after the early-session slide following two days of declines. Investors appeared upbeat to dive back into the broad-based stock index despite the recent news from the Fed that a potential tightening of monetary policy could happen as soon as this year.

Choppy trading dictated the market session yesterday, returning mixed results for the three main averages. The S&P500 was able to erase an intraday drop of about 1% and finished Thursday action higher by 5.52 points, or 0.13%, to 4,405.80.

The Dow Jones Industrial Average also staged a moderate comeback from a 1% loss in the early trading hours. The 30-stock benchmark index closed the day with a moderate decline of 66.57 points, or 0.19%, to 34,894.12. The Nasdaq Composite added 11.87 points, or 0.11%, to 14,541.79.

It’s been a turbulent week for stocks. After major equity gauges, Dow Jones and S&P500 posted their fifth straight record-high closings on Monday, investors have elevated their concerns that the market valuation could be running ahead of the economic expansion.

On fears of a slowdown in growth, market participants shifted to a risk-averse approach on Tuesday as headlines about rising coronavirus cases began piling. A day later, the Federal Reserve released its minutes from the last Fed policy meeting, announcing it may begin to rein in its substantial bond-buying program in any one of the three remaining meetings this year.

European Indexes Slide Into Negative Territory

Despite this week’s slight setback, major US indexes have remained well-bid for the year. As investors have been continuously optimistic this year toward stocks, the S&P500 has rallied 19% in 2021 and is currently hovering about 1.5% from its all-time high set Monday. Since January, the Nasdaq Composite has gained roughly 15%, while the Dow Jones has added 15.5%.

In European stock market action, major indexes drifted lower after on Wednesday the Fed revealed an emerging consensus to unwind its $120bn in monthly bond purchases. The pan-continental Europe Stoxx 600 slipped more than 2% in early deals, but later pared some losses and ended the day lower by 1.51%, or 7.18 points, to 467.24.

All major European indexes slid into negative territory on Thursday as investors largely folded their risky bets. France’s CAC40 led the losses, down about 2.5% on the day, while Germany’s DAX and UK’s FTSE100 closed down 1.25%, and 1.54%, respectively.

On Friday, European bourses are struggling to bounce back. The region-wide Stoxx 600 is lower by about 0.5% in the early hours of the session. Major stock gauges of individual economies in the bloc are also all in the red.

US futures remain pressured ahead of regular trading Friday. Futures contracts tied to the Dow Jones Industrial Average dropped about 200 points, while S&P futures were down roughly 0.60%. Nasdaq futures were lower by around 0.45%.

Over to cryptocurrencies, bitcoin advances for a second straight day today. After gaining as much as 6% on Thursday, and another 2% today, the orange coin reached a session high of $47,200. The flagship token is on pace to log its fifth straight winning week if the price closes above $46,600, the opening level for bitcoin this week.