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.

Dow Jones Industrial Average

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).

Coin rankings
Flush of green: top coins surge on Wednesday. | Source: CoinMarketCap.

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.

Crypto market cap
Crypto markets extend recovery past $250 billion. | Source: CoinMarketCap.

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.

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