Dow Posts Modest Gains as U.S.-China Trade War Ravages Oil Prices

The Dow and broader U.S. stock market traded in positive territory Thursday, overcoming a volatile session that saw escalating trade tensions between the United States and China drag oil prices sharply lower. Meanwhile, bitcoin continued to demonstrate its utility as a non-correlated asset by being virtually unaffected by trade-war hostilities.

Dow, S&P 500, Nasdaq Finish Higher

U.S. stocks opened slightly higher on Thursday but struggled to hold gains as the session progressed. All three major indexes flipped green by the close.

The Dow Jones Industrial Average would eventually settle up 43.47 points, or 0.2%, at 25,169.88.

Dow Jones

Verizon Inc. (VZ) was the Dow’s biggest laggard after an analyst at UBS downgraded the stock and implied that it may have already peaked.

The broad S&P 500 Index of large-cap stocks drifted between gains and losses before finishing higher. It closed up 0.2% at 2,788.87. Most of the 11 primary sectors finished in positive territory, led by information technology. On the opposite side of the ledger, losses were primarily concentrated in the energy sector.

The technology-heavy Nasdaq Composite Index also reversed losses Thursday, gaining 0.3% to 7,567.72.

Oil Selloff Intensifies

Crude oil plunged anew on Thursday after U.S. government data revealed a much smaller than expected drop in weekly stockpiles. The impact of the U.S.-China trade war on global growth and energy consumption was also a factor in the sharp pullback.

U.S. West Texas Intermediate (WTI) for July settlement reached a session low of $56.33 a barrel on the New York Mercantile Exchange. It would eventually settle down $2.27, or 3.9%, at $56.54 a barrel. Brent crude, the international futures benchmark, fell $2.93, or 4.2%, to $66.52 a barrel.

Earlier in the day, the U.S. Energy Information Administration (EIA) said commercial crude stockpiles fell by 300,000 barrels for the week ended May 24. Analysts had called for a decline of 1.4 million barrels.

Bitcoin Holds Steady

After climbing above $280 billion on Thursday, cryptocurrency markets pivoted lower in the afternoon session. The total market capitalization of all coins settled around $275 billion, with most of the large-cap assets trading mixed-to-lower.

Cryptocurrency Market Cap

Bitcoin’s dominance index has declined substantially in recent weeks, though this is hardly a bearish sign for the largest cryptocurrency. The bitcoin price continues to trade well north of $8,600 as investors show a strong reluctance to sell.

Compared with 24 hours ago, bitcoin’s price was little changed. It remains on track for a double-digit weekly return.

With the exception of Tether (USDT), all of the top 2o cryptocurrencies are on pace for solid weekly gains. Among them, 16 have returned 10% or more.

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.

Featured image courtesy of Shutterstock. Charts via Stockcharts.com, Barchart.com and CoinMarketCap.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi