Stock Market Live November 21: S&P 500 (SPY)) Regaining Momentum on Rate Cut Hopes

After swinging in red just yesterday, the major indices are regaining lost momentum.

In fact, the S&P 500 is up about 37. The SPDR S&P 500 ETF (SPY) is up about $2.73. The Dow Jones is up 276 points, with the Nasdaq up 155.

All after the Federal Reserve President John Williams suggested that the central bank cut rates in December.  He believes the central bank can lower its key interest rate from here, as labor market weakness poses a bigger economic threat than higher inflation.

As a result, the odds of a rate cut jumped to 70%, as compared to 50-50-coin toss odds yesterday, and from 95% odds last month.

AI stocks are also pushing higher this morning, despite more talk of a bubble, which doesn’t exist. Remember, according to Goldman Sachs, the AI story is just getting started. Also, according to Wolfe Research, as quoted by CNBC, “We continue to believe that concerns over an AI bubble bursting are overblown.”

Even Nvidia CEO Jensen Huang dispelled bubble fears.

“There’s been a lot of talk about an AI bubble. From our vantage point, we see something very different,” the Nvidia CEO told analysts on the quarter’s earnings call as he walked through $57 billion in quarterly revenue, a $65 billion forecast, and sold-out cloud GPUs, as reported by QZ.com. 

Again, there’s no bubble.

Bitcoin Now Trades at $83,882 

With markets melting down and the idea that we won’t see more interest rate cuts this year, Bitcoin is now down to $83,882.

Not helping, Bitcoin ETF withdrawals jumped to $870 million.

Plus, there’s a good deal of market uncertainty, as investors question whether the Federal Reserve will cut interest rates in December. If the central bank holds off on cutting interest rates, Bitcoin could come under even more pressure. After all, when borrowing costs are higher, risk-on assets are less appealing.

However, with Fed President John Williams suggesting a cut, Bitcoin could regain some of its lost momentum. Unfortunately, Williams isn’t the only one deciding on interest rates, so we really have to take what he’s saying with a grain of salt.

With Bitcoin bloodshed, stocks like Strategy (NASDAQ: MSTR), MARA Holdings (NASDAQ: MARA | MARA Price Prediction), and Riot Platforms (NASDAQ: RIOT) have been devastated. However, if we hear more encouraging Fed rate cut news, as we’re hearing today, these names could easily pivot higher.

It’s all a wait-and-see right now. 

If another Fed official comes out with negative rate cut news, the rally will fade off and die. So, be cautious at the moment.