Stocks and Cryptos Dip as 2024 Trading Winds Down

Stocks traded sideways, halting their pre-Christmas rally, while cryptocurrencies dipped on Thursday, resulting in a quiet trading day. The S&P 500 decreased by 0.06%, and the Nasdaq Composite increased by 0.02% at 2 pm ET. Bitcoin and ether fell by 3% and 3.8%, respectively, over the past 24 hours.

Investors evaluated initial jobless claims data, reporting 210,000 first-time filers for the week ending December 21, a decrease from the previous week and lower than the anticipated 224,000. Continuing claims rose slightly to 1.9 million, above the expected 1.88 million.

The mixed economic report did not alter expectations regarding an interest rate cut by the Fed next month. Fed funds futures indicated a 91% chance that rates will remain unchanged on January 29, according to CME Group data.

Quasar Elizundia, a research strategist at Pepperstone, noted that rising bond yields, due to reassessed monetary policy expectations, exert pressure on equities. Stocks may also face challenges as investors anticipate that interest rates in 2025 will not decline as much as previously thought.

In the cryptocurrency sector, significant market influences in 2025 are expected to arise from regulatory developments. Changes in leadership at the SEC and CFTC, along with a Republican-majority Congress and campaign promises from President-elect Donald Trump, could lead to notable advancements in the crypto market in early 2024. However, macroeconomic conditions and monetary policy will still significantly impact crypto prices.