Key Insights
- •The SP500 logged its strongest November reversal on record, gaining 5% since the November 21 low.
- •The index added approximately $2.75 trillion in market value in just one week, signaling a sharp return of risk appetite.
- •The rally raises questions about whether improving equity sentiment could spill over into crypto markets.
Equity markets have staged a dramatic turn, turning heads to the crypto news arena. By Nov. 28, the SP500 was up 1.55% for the day, recouping roughly $2.7 trillion of value lost in the prior week’s swoon. The surprise rally, fueled by dovish Fed talk and easing bond yields, has sent the benchmark within a hair of its all-time high. That surge has analysts and investors asking if risk-on sentiment will spill back into crypto. According to Bloomberg and market observers, U.S. stocks wiped out a $2.7 trillion market-cap loss on Nov. 21, roughly equal to the entire crypto market cap, which was then about $3 trillion. In crypto news commentary, the turnaround is being framed as potentially "historic," a test of whether risk appetite can revive in digital assets now that equities have rebounded.
Stocks Surge on Fed Hopes
U.S. stocks started Thanksgiving week with a broad rally. On Nov. 28, the Nasdaq jumped 2.7% and the SP 500 rose 102 points to 6,705. Major tech and AI-related stocks led the advance as market odds of a Fed rate cut surged. Fed funds futures showed roughly an 85% chance of a 25-bp cut in December, up from 42% a week earlier. Investors cheered speeches from Fed officials hinting at easier policy, and yields fell. The U.S. 10-year yield dipped to 4.05%. Reuters reported that dovish Fed signals and strong labor data "lend support" to rate-cut bets, driving stocks higher. Even with U.S. government shutdown worries, bulls kept buying the dip. One analyst observed that with weaker-than-expected payrolls data, the S&P "recovered from early weakness to turn positive," cementing the Fed-cut narrative. Deutsche Bank’s rosy call – projecting the SP 50 at 8,000 by 2026 – also helped revive investor risk appetite.
Crypto News: Crypto Market Trails, Then Stabilizes
Crypto markets have so far taken a back seat in the rally. Last week’s stock swoon hammered crypto with Bitcoin falling from about $125,000 in early October to the mid-$80,000s, dragging total crypto market cap down to $3 trillion. The equities’ $2.7T wipeout put crypto sentiment into "extreme fear," with Bitcoin at seven-month lows and $829 million of crypto liquidations that day. Crypto news media also flagged the slump: "the slide in bitcoin...dropped below $90,000," and warned that "Bitcoin serves as a risk proxy for equities." Since then, however, crypto has begun to steady. Bitcoin rebounded to around $88–90K by late Nov. 25, and by Nov. 28 it had climbed above $91,000. Implied volatility indices confirm the shift. Bitcoin’s 30-day implied volatility index has plunged even as BTC price recovered above $91K, erasing the mid-month spike.
Even crypto insiders have taken notice. The Kobeissi Letter highlighted the stock rebound, noting that as the S&P crossed 6,800 "asset owners are winning." That comment underscores the sentiment shift: when equities climb, crypto traders often feel emboldened. In fact, coiled volatility indices now hint at a synchronized year-end rally for stocks and crypto.
Fed Policy, Liquidity and Crypto News
Despite the rebound, analysts caution that risks remain. Data due this week, especially U.S. retail sales and Fed minutes, could test sentiment. The recent rally is partly "mechanical," a repricing of Fed expectations. If incoming data undercut the dovish view or credit conditions sour, stocks could stumble again. One crypto strategist warned that markets are still on edge: "investors are dealing with too many unknowns," and any new uncertainty could push risk assets lower.
Nevertheless, many see room for further gains if the Fed does ease on rate cuts. Traders have all but locked in a December cut, and lower rates typically bolster growthier assets. U.S. tech earnings have mostly surprised on the upside, and consumer indicators so far show resilience. If the year ends with a Fed pivot and Christmas spending, risk-on appetite could strengthen. In crypto news circles, the speculation is that regained bullishness in stocks could "spill over" into digital assets.