AI Drives Tech Rebound, Oil Soars, Bitcoin Tumbles: What's Driving Markets Thursday?

During midday Thursday trading in New York, U.S. stocks displayed mixed performance, with the technology sector outperforming others as investors maintained a bullish outlook on artificial intelligence, temporarily setting aside concerns about interest rates.

Additionally, economic data released Thursday morning revealed a robust labor market, with unemployment benefits registering well below expectations for the last week.

Atlanta Fed President Raphael Bostic stated his preference for the start of the rate reduction cycle in the third quarter, emphasizing the importance of avoiding premature cuts that could reignite demand and price pressures, aligning with recent comments made by his colleagues. He mentioned a willingness to initiate rate cuts before July should compelling evidence suggest faster-than-expected inflation deceleration.

The U.S. dollar index (DXY) moved higher, on track to close at its highest level since Dec. 12. Treasury yields also kicked higher, with the 10-year yield rising to 4.14% and the 30-year yield reaching 4.38%. Bonds tumbled, with the iShares 20+ Year Treasury Bond ETF TLT, falling 1%.

Oil prices, as tracked by the United States Oil Fund USO, experienced a 1.9% upswing after the IEA adjusted its 2024 oil demand growth forecast to 1.24 million bpd, reflecting a 180,000-bpd increase. The revision attributed this boost to improved economic growth and reduced crude prices in the fourth quarter. Furthermore, ongoing geopolitical tensions in the Middle East and between Iran and Pakistan contributed to the continued support for crude prices.

Bitcoin BTC/USD experienced a sharp 3% decline, dropping below the $42,000 threshold. This cryptocurrency has witnessed a significant 15% decrease since last week’s surge fueled by speculation about the potential approval of a spot Bitcoin ETF.

Thursday’s Performance In US Major Indices, ETFs

The SPDR S&P 500 ETF Trust SPY rose 0.2% to $473.23, the SPDR Dow Jones Industrial Average DIA inched 0.1% down to $372.38 and the tech-heavy Invesco QQQ Trust QQQ was trading 0.7% higher to $410.20, according to Benzinga Pro data.

Sector-wise, the Technology Select Sector Fund XLK outperformed, up 1.2%, followed by the Communication Services Select Sector Fund XLC.

The Utilities Select Sector Fund XLU was the laggard, down 1.4%, while the Real Estate Select Sector SPDR Fund XLRE witnessed another 1% decline.

On an industry level, the VanEck Semiconductors ETF SMH rose the most, up 2.2%. Clean energy stocks underperformed, with the Invesco Wilderhill Clean Energy ETF PBW down 2.1%.

Thursday’s Stock Movers

• NovoCure Ltd. NVCR surged 21% as the FDA accepted its application to use Tumor Treating Fields therapy with standard systemic treatments for non-small cell lung cancer.
• Hertz Global Holdings HTZ gained nearly 9% following Morgan Stanley’s upgrade from Equal-weight to Overweight, prompted by the rental car company’s reduction of its electric vehicle fleet.
• Tesla Inc. TSLA declined by 2.6% as Barclays lowered its price target from $260 to $250 while maintaining an Equal weight rating on the stock.
• Medium and smaller-sized chipmakers, in comparison to NVIDIA Corp. NVDA and Advanced Micro Devices Inc. AMD, emerged as top daily performers on the Nasdaq 1000 exchange. Marvell Technology, Inc. MRVL, QUALCOMM Incorporated QCOM, Applied Materials, Inc. AMAT, Lam Research Corporation LRCX and ASML Holding N.V. ASML all recorded gains ranging between 3% and 4% for the day.
• Discover Financial Services DFS and KeyCorp KEY fell by 10% and 5.8%, respectively, after both companies missed last quarter’s earnings estimates.
• Other companies reacting to earnings are Fastenal Company FAST (up 5.9%), Truist Financial Corporation TFC (down 1%) and M&T Bank Corporation MTB (flat).

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