On December 31, 2024, the New York Stock Exchange was abuzz with activity. The new trading year for 2025 began with a bang as crypto trades soared, fueled in part by the enigmatic “Roaring Kitty,” who once again stirred excitement in meme stocks. In the broader market, a flurry of enthusiasm was evident, even in the absence of clear catalysts.
Speculative sectors of the stock market experienced a significant boost in early trading on Thursday, marking the first session of the new year. This follows a remarkable two-year performance by the S&P 500, the best since 1998.
Stocks linked to Bitcoin saw a surge as the digital currency climbed past $96,000. Notably, Microstrategy saw a 4% increase in premarket, capping off a remarkable 360% rise over 2024. Other crypto-related companies like Coinbase, Robinhood, Mara Holdings, and Riot Platforms also made considerable gains following a successful previous year.
In another corner of the market, social media-savvy retail investors were on high alert. Roaring Kitty, an influential online persona, shared a mysterious post featuring the late musician Rick James, sparking a wave of speculation. Many investors interpreted this as a nod to Unity Software, whose shares shot up by 10% in premarket trading. Others speculated a renewed focus on GameStop, which also saw its shares rise before the market opened.
Semiconductor stocks, which thrived in 2024, held strong once again, gaining momentum after the artificial intelligence hype waned towards the year’s end. Broadcom experienced a 2% uptick, while Nvidia climbed 1.6%.
Adding to the market’s movement, Topgolf Callaway Brands saw an 8.5% jump following Jefferies’ upgrade from a hold to a buy rating. The investment bank highlighted the stock as oversold, increasing its price target to 65% above the previous year’s close.
As speculation surged, broader stock futures pointed towards an optimistic start to 2025. Dow futures rose by as much as 300 points, while S&P 500 futures increased by 0.8%, and Nasdaq-100 futures climbed by 1%.
Thursday’s market behavior mirrored the initial optimism seen after Donald Trump’s election victory back in November. Investors at that time had hoped his pro-business strategies would fuel economic growth. However, the rally cooled towards the end of 2024 as fears of heightened inflation due to protectionist policies emerged, alongside signals from the Federal Reserve indicating fewer interest rate cuts in 2025.
Lisa Shalett, Morgan Stanley Wealth Management’s chief investment officer, offered a thought-provoking perspective in a client note. She noted that while there’s an assumption that upcoming deregulation will ignite ‘animal spirits,’ there’s a risk it could accelerate monopoly power, weakening broad economic initiatives and leaving many behind.
