Dow Rebounds from Brutal Drop as Treasury Secretary Revives Trade-Deal Hopes; SEC Evaluates New Crypto ETF

The Dow and broader U.S. stock market reversed losses Friday after one of President Trump’s top officials the United States and China held “constructive” dialogue on resolving their trade dispute. The news comes on the very same day that Washington raised tariffs on $200 billion worth of Chinese imports.

Dow, S&P 500 Rebound from Brutal Selloff

Wall Street’s major indexes recovered sharply in afternoon trading, with the Dow Jones Industrial Average full reversing a 359-point drop. The blue-hip index settled up 114.01 points, or 0.4%, at 25,942.37.

Dow Jones

The broad S&P 500 Index of large-cap stocks gained 0.4% to 2,881.40. The index was down as much as 1.6%. Materials, utilities and consumer staples stocks were the biggest gainers.

After falling 1.9% through the morning session, the Nasdaq Composite Index shifted into positive territory, gaining 0.1% to 7,916.94.

Can a Trade War Be Averted?

Optimism on the U.S.-China trade front was revived on Friday after Treasury Secretary Steven Mnuchin said negotiations between the two countries was “constructive.” Mnuchin’s comments came mere hours after the White House hiked tariffs on $200 billion worth of Chinese imports. Those goods are now taxed at a rate of 25% compared with 10% initially.

China has vowed to retaliate to the tariff escalation but has yet to announce formal counter-measures. Beijing expressed “deep regret over the development” before pledging to take decisive action.

“We hope the United States will meet us halfway, and work with us to resolve existing issues through cooperation and consultation,” China’s Ministry of Commerce said in a statement, according to CNN.

President Trump reignited the trade war last weekend by threatening additional tariffs on Chinese imports after Beijing reportedly reneged on a previous deal. Read more: Global Stocks in Meltdown Mode, VIX Spikes Following Trump’s Trade-War Tweets.

SEC Evaluates New Crypto ETF Proposal

The U.S. Securities and Exchange Commission (SEC) has received a new application to list a cryptocurrency exchange-traded fund (ETF), according to new filing documents released Thursday.

According to the official prospectus, Crescent Crypto Asset Management is looking to develop a new crypto-backed ETF in partnership with NYSE Arca. The proposed fund would give investors exposure to bitcoin and Ethereum (ETH), the two largest cryptocurrencies by market cap.

The U.S. securities regulator has rejected dozens of applications to list a crypto ETF over concerns of market manipulation and transparency. The most high-profile rejection came last year after the Winklevoss Bitcoin Trust failed to get the greenlight. VanEck and SolidX re-submitted their application for a physically-backed bitcoin fund in late January shortly after the U.S. government shutdown ended. The proposal is still going through the regulator’s review process.

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. Chart via Stockcharts.com.

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