Weekly Wrap-Up: Stock Market and Bitcoin Fall Despite Nvidia Earnings Beat

TLDR

• US stocks closed Friday higher with S&P 500 up 1% and Nasdaq up 0.9%, but all three major indexes posted weekly losses
• Bitcoin dropped to $80,500, heading for its worst month since the 2022 crypto collapse after falling from record highs
• Fed rate cut odds jumped to 75% for December after NY Fed President John Williams said he sees room for cuts in the “near term”
• Nvidia reported 62% quarterly sales growth from AI demand but stock still fell, unable to calm AI bubble concerns
• Consumer confidence fell to 51 in November as Americans worry about rising prices and potential job losses

US stock markets closed Friday’s session in positive territory after a week of turbulent trading. The S&P 500 gained 1% while the Nasdaq Composite rose 0.9%. The Dow Jones Industrial Average climbed 1.1%, adding nearly 500 points.

However, these Friday gains couldn’t offset losses from earlier in the week. The S&P 500 dropped almost 2% for the week. The Nasdaq fell close to 3% over the same period.

Both indexes hit their lowest levels since September during Thursday’s trading session. Markets have been grappling with concerns about an AI-fueled bubble. Even strong earnings from major tech companies haven’t been enough to ease these worries.

New York Fed President John Williams provided some relief on Friday. He stated he sees room for interest rate cuts in the “near term.” His comments caused traders to reassess their expectations for the Federal Reserve’s December meeting.

Rate cut odds jumped from 40% on Thursday to 75% by Friday. Williams’ remarks come as the Fed appears deeply divided heading into its final 2025 meeting. The Federal Reserve previously cut its target rate by 50 basis points to address inflation and economic concerns.

Lower interest rates typically make riskier assets more attractive to investors. This happens because government bond yields decrease when rates fall. Investors then seek higher returns in other markets.

Tech Earnings Fail to Boost Markets

Nvidia reported strong quarterly results with sales rising 62%. The growth came from robust demand for AI data centers. Initial market reactions were positive across tech and AI-related assets.

The optimism didn’t last long. Both Nvidia’s stock and broader markets sold off after the earnings announcement. Investors began questioning whether AI stocks represent a bubble.

Nvidia stock ended Friday down nearly 1%. The chipmaker’s strong performance couldn’t overcome broader market concerns. Markets remain cautious about exposure to speculative growth assets.

Bitcoin Faces Worst Month Since 2022

The cryptocurrency market experienced severe pressure this week. Bitcoin fell to $80,500 on Friday, marking a six-month low. The drop represents a sharp decline from record highs reached just over a month ago.

Bitcoin is now on track for its worst monthly performance since 2022. That year saw a major collapse in cryptocurrency markets. The current sell-off has been magnified by persistent liquidity issues.

BlackRock’s iShares Bitcoin ETF saw its largest daily withdrawal of the year. This signals risk aversion among institutional investors. Retail trading saw brief revival on positive tech news but couldn’t sustain momentum.

Ether also experienced double-digit percentage drops. Bearish sentiment has increased across the crypto market. Traders are focusing on downside protection through put options.

Consumer Confidence Drops

Consumer sentiment deteriorated in November according to University of Michigan data. The confidence reading fell to 51. Americans remain worried about higher prices and potential job losses.

The Fed rate cut by 50 basis points aimed to address both inflation and sluggish economic indicators. However, the positive effects have been limited by macroeconomic uncertainty. Global growth prospects remain unclear.

Institutional flows into crypto have been subdued despite the rate cuts. Regulatory discussions in the US continue to create uncertainty. Coinbase and other exchanges are expanding globally amid this regulatory environment.

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