US stocks traded higher on Monday after bitcoin (BTC-USD) rose to a new record, as investors prepared for the Federal Reserve’s final policy decision of the year later in the week.
The Nasdaq Composite (^IXIC) rose about 0.5%. The S&P 500 (^GSPC) gained 0.3%, while the Dow Jones Industrial Average (^DJI) flatlined after a losing week for these key indicators.
Meanwhile, shares of software company MicroStrategy (MSTR) rose more than 4% on news that the bitcoin buyer is joining the Nasdaq 100 (^NDX). Bitcoin itself rose to an all-time high above $106,000 as hopes for a crypto-friendly Trump administration continued to fly high, before falling back to around $104,000.
Markets are moving away from gas as the Federal Reserve’s final meeting of the year approaches. Wednesday’s interest rate decision is already in the spotlight as Wall Street looks for a catalyst that will revive this year’s stellar stock market rally.
Investors see a final rate cut in 2024 as a certainty, with 97% of traders currently pricing in a 25 basis point move. The bigger question now is whether the Fed is willing to scale back its dot plot, which has planned four more small cuts in 2025, given continued stubborn inflation and potential challenges from the Trump administration.
This week also brings an update to the Personal Consumption Expenditures (PCE) index – the Fed’s preferred inflation gauge – and a November US retail sales figure for insight into consumer resilience.
The Fed’s decision caps a busy week of rate hikes by central banks worldwide, including the Bank of Japan making policy announcements.
Elsewhere, the latest Chinese retail sales figures fell short of expectations, putting pressure on oil prices. Brent (BZ=F) fell slightly to almost $74 a barrel, after rising almost 5% last week, while West Texas Intermediate (CL=F) fell below $71.
On the corporate front, shares of Super Micro Computer Inc. fell. (SMCI) down 4%, recovering from deeper pre-market losses. The struggling server maker will be delisted from the Nasdaq 100.
LIVE 2 updates