Wall Street Stocks Edge Higher with Nasdaq in the Lead

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Key Takeaways

Wall Street stocks finish Wednesday modestly higher as Nasdaq leads the gains
European bourses drop as Omicron variant fears still prevail over Europe

What’s on Focus in the Markets?

Stocks on Wall Street finished Wednesday’s regular session slightly higher after investors piled into every sector in equities a day earlier. As a result of the slowdown in financial markets, the Dow Jones Industrial Average was flat, while the Nasdaq Composite led the gains.

In more detail, the 30-stock Dow Jones finished just above the flatline. In contrast, the Nasdaq Composite advanced over half a percent as tech stocks maintained their positive sentiment.

This said Meta Platforms (formerly Facebook) added over 2% on the day. Also, Apple posted a gain of 2.2%, while Tesla finished higher by 1.6%.

In that context, the broader stock market paused its aggressive upside swing from Tuesday. Then, equities globally posted their best day for the year as all major stock indexes rose.

What’s New Around the Markets?

Now, as the market mood is shifting every day, stocks whipsawed as traders weighed the potential impact of Omicron. The new strain of Covid-19 has appeared to be more transmissible than previous variants.

To this end, in Europe, stocks were pressured by Covid-19 jitters and fears of new restrictions and even lockdowns. While governments around Europe are struggling to contain the spread of the virus, investors take a cautious approach to equities.

In turn, the pan-European Stoxx 600 slipped on Wednesday, after completing its best two-day gain of 2021. The region-wide index was led lower by losses in technology and consumer stocks.

What’s Next for Traders and Investors?

Further, the US Federal Reserve is preparing to have its final meeting of the year next week, on Dec. 14-15. With this in mind, the US central bank is expected to present more details over its tapering process. Last month, Fed officials initiated the so-called taper, or reduction, of monetary support.

While the Fed had supported the US economy by $120 billion a month, it cut off $15 billion in November. Given the surging inflation, however, policymakers at the Fed might be prompted to speed up the pace of the stimulus reduction.

On this note, some economists expect the Fed’s emergency stimulus will be completely withdrawn by March next year. Also, once tapering is done, the bank is looking to start raising interest rates. This is expected to happen sometime in mid-2022.

The vast monetary stimulus has been largely responsible for pushing inflation higher. It also contributed to driving investors into stocks from every asset class, including cryptocurrency.

What’s the Latest News on Bitcoin?

In cryptocurrency markets, the price of bitcoin remained pinned near $50,500 on Wednesday. The leading digital asset halted its upside swing after the steep selloff which began and ended on Saturday. Since then, the orange coin has gained about 20% to the current market price of around $50,000.

In addition, Ether, the second-biggest coin, finished the day higher by about 3%. The price of the Ethereum token hit a session high of $4,450.

Despite the recent slide in crypto prices, analysts remain confident the fast-emerging asset class will have a bright future. To that end, retail investors and Wall Street pros are showing increased interest to dive into cryptocurrency as the market is growing every day.