Crypto trades jumping. Roaring Kitty boosting meme stocks. Broader market ripping on no apparent catalysts.
Animal spirits are on the loose at the dawn of 2025 trading.
Many speculative pockets of the stock market surged Thursday, the first session of the new year, right after the S&P 500 closed out the best two-year run since 1998.
Stocks tied to the price of bitcoin jumped as the cryptocurrency climbed back over $96,000. Microstrategy added 3.6% after surging more than 360% in 2024. Crypto-related companies Coinbase, Robinhood, Mara Holdings and Riot Platforms also traded higher after a big 2024. A crypto token called "fartcoin" skyrocketed 45% and now has $1.38 billion market value.
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Elsewhere, retail traders active on social media were busy playing a guessing game after online personality Roaring Kitty posted a cryptic gif on X featuring a "Chappelle's Show" sketch in which comedian Dave Chappelle plays the late funk musician Rick James.
One of James' songs is titled "Unity," and some believe the meme stock leader, also known as Keith Gill, was referring to Unity Software, whose stock soared 9.1%. Others thought he was back touting his original favorite GameStop, whose shares also caught a bid.
Meanwhile, semiconductor stocks — 2024's big winners — helped lead the market again after the artificial intelligence trade lost some steam at the end of last year. Nvidia gained 3% Thursday.
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What's more, golf stock Topgolf Callaway Brands surged 14.5% on the back of an upgrade at Jefferies to buy from hold. The investment bank said shares of the golf equipment maker looked oversold and raised its price target to 65% above where the name closed the year.
With a pickup in market speculation, broad stock indexes were briefly higher to kick off 2025. The Dow Industrial Average advanced as much as 300 points before losing its momentum to close the day lower.
Thursday's dramatic moves resembled the initial rallies on the back of Donald Trump's election victory in November, as investors bet his pro-business policies would drive companies and the economy to strong growth. Those gains slowed toward the end of 2024 as concern grew that the president-elect's protectionist policies could stir inflation or disrupt supply chains, and as the Federal Reserve signaled fewer interest rate cuts in 2025.
"Many investors assume that the incoming administration's push for deregulation will unleash 'animal spirits,'" Lisa Shalett, chief investment officer of Morgan Stanley Wealth Management, said in a recent note to clients. "But what if it only accelerates the concentration of monopoly power in the hands of a few, diluting the efficacy of broad economic measures and leaving behind even larger swaths of the populace?"
Correction: Online personality Roaring Kitty posted a gif on X featuring a "Chappelle's Show" sketch in which comedian Dave Chappelle plays the late funk musician Rick James. An earlier version misstated the details of the post.
