Jamie Spencer
U.S. stocks edged lower on Thursday as Wall Street resumed trading after the Christmas holiday, with markets digesting one of the week’s few notable economic data points. The S&P 500 (^GSPC), Nasdaq Composite (^IXIC), and Dow Jones Industrial Average (^DJI) all slipped by 0.1%, as investors weighed mixed signals from the labor market and ongoing volatility in the crypto space.
Modest Declines in Tech and Crypto
Tech stocks led the declines as the 10-year Treasury yield (^TNX) climbed above 4.6%, pressuring growth-oriented sectors. Meanwhile, bitcoin (BTC-USD) fell below $96,000 amid volatile trading, dragging crypto-linked stocks like MicroStrategy (MSTR) down alongside it.
The modest downturn interrupted a promising start to the “Santa Claus rally,” which began earlier in the week with gains of around 1% for all major indexes. The S&P 500 and Nasdaq Composite had moved closer to record levels after rebounding from last week’s Federal Reserve-driven selloff.
Labor Market Data in Focus
With few major economic reports this week, the release of weekly jobless claims took center stage. According to the Labor Department, initial jobless claims fell to 219,000, slightly below expectations of 223,000. However, continuing claims rose by 46,000 to 1.91 million, marking their highest level since November 2021.
This mixed labor data points to a cooling job market, raising questions about the broader economic outlook as Wall Street navigates a period of uncertainty.
GameStop Rides Meme Stock Momentum
One notable standout was GameStop (GME), which climbed as much as 16% over the past five days. The rally gained momentum after a cryptic post by Keith Gill, known as “Roaring Kitty,” on Dec. 25, marking his return to social media after three years of silence.
GameStop shares have surged over 88% in 2024, fueled by renewed interest in meme stocks. However, the stock remains well below its all-time high of over $80 during the infamous short squeeze of 2021.
Broader Market Struggles
Despite isolated gains like those in GameStop, broader market sentiment remains cautious as investors grapple with mixed economic signals. The rising Treasury yields, crypto market volatility, and signs of a softening labor market all contribute to a fragile trading environment as the year winds down.
Looking Ahead
As Wall Street approaches the final trading days of 2024, the focus remains on economic data and corporate developments. Whether the Santa Claus rally can regain its momentum will depend on a clearer picture of the labor market and broader investor sentiment heading into the new year.
