The stock market hit new record highs Wednesday, with the Dow Jones Industrial Average rising up to 200 points to surpass its previous peak in August, thanks to upbeat earnings reports and a strong rally in Bitcoin prices.
The Dow rose as much as 0.6% to a new record high before paring back gains somewhat, while the S&P 500 was up 0.3%, less than 0.2% shy of its own record.
Investor sentiment got a boost as third-quarter earnings largely continued to come in above expectations: Through Wednesday morning, some 86% of S&P 500 companies have topped estimates, according to data from Refinitiv.
Shares of Verizon rose over 2%, after topping earnings estimates earlier in the day, while Netflix and United Airlines both posted better-than-expected results after the market closed Tuesday.
The price of Bitcoin, meanwhile, hit a new all-time high of $66,893 following weeks of positive momentum for the cryptocurrency, after the first Bitcoin-linked ETF, released by ProShares, rallied on its first day of trading Tuesday.
Adding to the buzz is hedge fund billionaire Paul Tudor Jones, worth $7.3 billion according to Forbes’ estimates, who told CNBC on Wednesday that he prefers Bitcoin over gold as a hedge against inflation.
“Earnings remain the main driver of the advance as results continue to come in ahead of expectations,” says Vital Knowledge founder Adam Crisafulli. “Anticipation of a fiscal deal in Washington (a rough framework could be in place by the end of the week) and indications of Xi dialing back his regulatory campaign in China are also adding to the market’s enthusiasm.”
Since the previous highs in August, the market has been weighed down by a myriad of factors, including the Covid delta variant, reports of surging inflation and the removal of government stimulus.
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“Bitcoin’s bullish momentum could last a lot longer, but the global energy crisis should not be ignored,” writes Oanda senior market analyst Edward Moya. “Cryptocurrency energy consumption could draw scrutiny from many governments that are battling energy shortfalls,” he argues. Moya says the price of Bitcoin may well hit $75,000, but reaching $100,000 will be “difficult,” at least until the global energy crisis is resolved.
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