Wall Street Indexes Advance Record Highs Ahead of Bank Stress Tests Results; Bitcoin Rallies Again: Markets Wrap

US stocks made continued gains as investors anticipated stress tests results after market close on Thursday. The yearly ritual will reveal how banks handle various hypothetical economic challenges, including if they have enough capital to lend. All 23 participants are expected to pass, which may boost buybacks and dividends.

This comes at a time when traders are assessing Federal Reserve Chair Jerome Powell’s comments over inflation and Thursday’s reported jobless claims, which fell less than expected to 411,000. 

Striking a sense of economic optimism in traders after President Biden’s multi-billion dollar infrastructure plan, the S&P 500 and Nasdaq Composite Index were trading near record highs all day. All major indexes landed in the green by close.

Equities

• The Dow boosted 0.95% to 34,196.
• S&P 500 shot up 0.58% to 4,266.
• Nasdaq jumped 0.69% to 14,369.

Insight

“From an economic standpoint, there’s still a lot of positives for growth,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors in an interview with the Wall Street Journal. “We’ve seen markets do well when the interest-rate environment is tame. That’s fueling the optimism.”

Crypto

Bitcoin’s rally continues…for now. The digital currency dropped below $30,000 then surged back to almost $35,000 on Wednesday, following news that China had amped up its bitcoin mining regulations and forced banks to ban all of its transactions. Despite climbing up almost 10% in 24 hours, Bitcoin appeared to have slowed down its gains then shot right back up again Thursday afternoon.

Despite this week’s volatility, the space keeps attracting more and more venture capitalists. VC firm Andreessen Horowitz (a16z) raised $2.2 billion for Crypto Fund III, which they announced Thursday. The venture giant now allocates $3 billion to the asset class.

• Bitcoin is trading around $34,893.72, inching up 4.64% in 24 hours at 4:00 pm ET.
• Ether is trading around $2,010.15, advancing 3.37% in 24 hours at 4:00 pm ET. 
• ETH:BTC is at 0.058, down -1.57% at 4:00 pm ET.
• VIX is down -2.14% to 15.97 at 4:00 pm ET.

Insight

“As with any new computing movement, crypto has endured a variety of challenges and misconceptions,” A16z wrote in an announcement. “That’s why we are also bringing together heavy-hitters across several functions to help translate crypto to the mainstream.”

Fixed income

• The US 10-year yields 1.497% as of 4:00 pm ET.

Commodities

• Crude oil had an intraday high of $73.61 per barrel and rose 0.38%.
• Gold was down –0.47% at $1,775.20

Currencies

• The US dollar strengthened 0.02%, according to the Bloomberg Dollar Spot Index.

In other news…

Bank of England’s lending rate will not change at 0.1%, BOE announced Thursday after a unanimous vote in a monetary policy meeting. Following the dovish news, the pound slipped against the dollar 0.5% and the UK 10-year bond dipped as well. Additionally, monthly bond purchases will stay the same.

We’re watching out for …

• The PCE price index will be released on Friday.

That’s it for today’s markets wrap. I’ll see you back here tomorrow.