What a day. We saw the morning start with a new iteration of the Reddit stocks rally, and the afternoon close with new fears about digital ad companies. In between, what did the stock market do today? And what else do you need to know?
To start, the major indices had a choppy day. The S&P 500 closed down 1.31% while the Dow Jones Industrial Average closed down 0.39%. Once again, the tech-heavy Nasdaq Composite struggled, shedding 2.7% on Wednesday.
A quick look at the top movers will also highlight the oddness of the trading day. SOS (NYSE:SOS), a Chinese cryptocurrency mining company, popped on a rebuttal to a short-selling report. KemPharm (NASDAQ:KMPH) continued to climb thanks to positive ADHD drug data. Fiverr (NYSE:FVRR) experienced an e-commerce sector slump.
Want to make sense of the noise? And what else did the stock market do today? Take a look at these three big stories with InvestorPlace.
What Did the Stock Market Do Today? Hurt Tech Stocks.
Tech stocks were making big moves on Wednesday for a variety of reasons.
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) stumbled after its Google announced major changes to its ad selling business. Following a decision to phase out third-party cookies, Google says it will no longer sell ads that target individual users. This comes as the company promises to not use or otherwise invest in technology that allows it to track web users from site to site. Instead, the digital ad leader will focus on privacy sandboxes, targeting groups of similar users to still deliver personal experiences.
For other digital ad stocks like The Trade Desk (NYSE:TTD) and Snap (NYSE:SNAP), sector-wide pressure brought bad news on Wednesday. Lawmakers and consumers talk a lot about internet privacy. The move from Google seems to align with those concerns, and could force companies to follow suit. Is it time to panic? No. Google will still be watching us, just not explicitly selling ads based on our individual actions. Plus, companies like Facebook (NASDAQ:FB) are digging their heels in to support the business of personalized, targeted advertisements.
Facebook is also digging its heels into the political ad game. Today, the company announced it will lift its ban on political ads, something that came into effect after allegations the social media site contributed to misinformation and inflaming voters.
One other thing to watch? The yield on the 10-year U.S. Treasury note trekked back toward 1.5% today. Bond yields rise with inflation rates, and typically lead growth-oriented equities to stumble. We are seeing that today with mega-cap tech stocks.
Will Ashton Kutcher Make a SPAC Comeback?
Ashton Kutcher led the way with celebrity-backed special purpose acquisition companies in 2008.
Now, it seems that every celebrity is entering the stock market with a blank-check company. Dave Portnoy stirred up a buzz yesterday with his VanEck Social Sentiment ETF (NYSE:BUZZ), a way of leveraging the r/WallStreetBets craze. Colin Kaepernick saw his social justice SPAC, Mission Advancement (NYSE:MACCU) debut today. And Tony Hawk is now serving on the advisory board of Iron Spark I, a company focusing on the branded consumer space.
This Hollywood meets Wall Street phenomenon is truly indicative of the popularity of special purpose acquisition companies. They are bringing early stage companies in hot themes to the public markets. Lucid Motors, for instance, promises to disrupt Tesla (NASDAQ:TSLA). Instead of waiting for it to build up its automotive pipeline and factory footprint, investors can get in now through Churchill Capital IV (NYSE:CCIV). CCIV will complete a reverse merger with Lucid and help it skip the IPO process.
For context, Goldman Sachs thinks SPACs could generate more than $700 billion in acquisition activity over the next two years. Right now, the firm sees $103 billion in capital searching for acquisition targets.
Get ready. Soon your favorite actress, Instagram influencer or athlete will be leading a SPAC… if they are not already. Publicly traded skinny tea, here we come!
Crypto Craze Continues
Bitcoin (CCC:BTC) and its peer cryptocurrencies have no shortage of critics. Treasury Secretary Janet Yellen has called cryptos speculative, and cautioned that they could be dangerous for some investors. Massachusetts Sen. Elizabeth Warren echoed those concerns — and was even broader in her criticisms. Her interest in the space? Growing income inequality, and the complicating role Bitcoin could play in her proposed ultra-millionaire wealth tax.
But despite the criticism, the crypto craze continues.
Today, we saw BTC make its way back above $50,000. Altcoins like Ethereum (CCC:ETH), Stellar Lumens (CCC:XLM) and XRP (CCC:XRP) also gained on the day.
For picks and shovels plays, like the cryptocurrency mining companies, this means today brought a bullish catalyst. Take SOS for example. After falling hard on a short-selling report from Hindenburg Research, SOS shares have been recovering. Today they closed roughly 20% higher along with the rally in Bitcoin and bullish reports from firm Scorpio VC.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.