Dow Rallies Despite Surprising Slowdown in U.S. Economy; Crypto Markets Hit $250 Billion
The Dow and broader U.S. stock market extended their relief rally Wednesday amid signs that the Trump administration was planning to restart trade negotiations with China, raising optimism that a prolonged tariff war could be avoided. Crypto markets crossed the $250 billion value mark as Ethereum (ETH), Litecoin (LTC) and Binance Coin (BNB) climbed double digits.
Dow Recovers; S&P 500, Nasdaq Follow
All of Wall Street’s major indexes closed higher, overcoming a volatile start to Wednesday trading. The Dow Jones Industrial Average gained 115.97 points, or 0.5%, to finish at 25,648.02. The blue-chip index was off by as much as 91 points.
The broad S&P 500 Index of large-cap stocks gained 0.6% to 2,850.96. EIght of 11 primary sectors reported gains, with communication services gaining more than 2% and information technology adding 1%.
Surging technology stocks propelled the Nasdaq Composite Index to another large gain. The tech-driven average climbed 1.1% to 7,822.15.
Trade Tensions Weighing on U.S., Chinese Economies
The economies of China and the United States showed surprising weakness at the start of the second quarter, raising concerns that the almost year-long trade war was sabotaging growth.
China’s retail sales growth slowed to 7.2% annually in April, the weakest in 16 years, the National Bureau of Statistics reported Wednesday. Industrial output in the same month rose just 5.4% year-over-year, way below forecasts.
In the United States, retail sales unexpectedly fell 0.2% in April after a surprise gain of 1.7% the previous month, the Department of Commerce reported Wednesday. U.S. industrial production also fell unexpectedly, as output at mines, factories and utilities providers fell 0.5% in April.
On Wednesday, Treasury Secretary Stephen Mnuchin told a Senate subcommittee on Appropriations that the U.S. will likely send an envoy to Beijing soon to resume trade talks. Earlier, President Trump’s top trade adviser said talks with China had reached “a complete stalemate.”
Altcoin Season Returns
After what appeared to be a brief cooling trend, altcoin season is heating up once again. On Wednesday, both small-cap and large-cap altcoins surged, sending the cryptocurrency market toward new six-month highs.
Ethereum was the best-performing large-cap, gaining 17.1% to $241.34. Binance Coin was right behind ether, climbing 15% to $26.70. Meanwhile, Litecoin returned above $100 for the first time since April, gaining more than 12%.
Small-cap cryptocurrencies were also on fire, with Tezos (XTZ) climbing 26.6% to reach 1.75. Bitcoin SV (BSV), IOTA (MIOTA), NEO and Ethereum Classic (ETC) each rose by at least 15%.
Double-digit returns were also reported for Stellar (XLM), Cardano (ADA) and Tron (TRX).
The total market capitalization of all cryptocurrencies reached $252.5 billion, a new six-month high. The market has recovered a swift $150 billion from the December low.
Coins not named bitcoin now account for 42.5% of the overall cryptocurrency market, up from around 40% earlier in the week.
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 and CoinMarketCap.