Dow Gives Up Record High as U.S.-Iran Tensions Escalate; Bitcoin Hits $9,962
The Dow and broader U.S. stock market finished lower on Friday, as geopolitical tensions between the United States and Iran weighed on investors’ sentiment after the downing of an American surveillance drone in the Strait of Hormuz earlier this week.
Dow Gives Back Gains; S&P 500, Nasdaq Fall
All of Wall Street’s major indexes finished lower on Friday. After hitting a fresh intraday record, the Dow Jones Industrial Average reversed course in the final hour, falling 34.04 points, or 0.1%, to 26,719.13.
Energy blue-chips like Exxon Mobil Corp (NYSE: XOM) and Chevron Corp (NYSE: CVX) outperformed the market as oil prices extended their recovery.
The broad S&P 500 Index of large-cap stocks closed down 0.1% at 2,950.46. Seven of 11 primary sectors reported losses, with information technology and industrials companies falling 0.5% on average. Gains were primarily concentrated in energy, health care and utilities stocks.
Sliding technology shares weighed on the Nasdaq Composite Index, which fell 0.2% to 8,031.71.
Persian Gulf Flare-Up
Oil prices extended their rally on Friday after President Trump confirmed that he had ordered a strike on Iran before changing his mind at the last minute.
Trump called off the attack because it was “not proportionate” to Iran’s downing of an American spy drone in the Strait of Hormuz earlier in the week.
….On Monday they shot down an unmanned drone flying in International Waters. We were cocked & loaded to retaliate last night on 3 different sights when I asked, how many will die. 150 people, sir, was the answer from a General. 10 minutes before the strike I stopped it, not….
— Donald J. Trump (@realDonaldTrump) June 21, 2019
Iran says it shot down the surveillance drone because it violated the country’s airspace. The Iranian government has since released photographs of the drone’s fragments. According to The New York Times, a top Iranian military commander said a second American aircraft also violated the country’s airspace but was not shot down, likely because it had 35 people on board.
$10,000 Bitcoin on the Cards
Bitcoin extended its blistering rally into the afternoon session on Friday, as prices came within $40 of an all-time high. The BTC price peaked at $9,962.48 on Bitstamp, having gained 4.1% on the day.
The largest and most influential cryptocurrency has gained more than 18% over the past week, far outperforming most of its major peers. As a result, bitcoin’s dominance rate has jumped back up to 58%, the highest in over a month. Read more: Bitcoin’s Road to $10,000 Outshines Libra as Crypto Market Cap Crosses $300 Billion.
A clean break above $10,000 could generate even stronger buying pressure for bitcoin, as the fear of missing out (FOMO) pulls retail traders back into the mix. As Tyler Winklevoss recently tweeted, 10k bitcoin will eventually lead to $15,000 as FOMO sets in.
A look at the crypto market cap highlights bitcoin’s gravitational pull on altcoins and tokens. The cumulative value of all coins in circulation is back above $300 billion for the first time in over a year. At last check, the crypto market cap was worth $305.5 billion.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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