Dow Snaps Six-Day Winning Streak as China Trade Anxieties Resurface
After a blistering start, the Dow and broader U.S. stock market backtracked on Tuesday, as investors shifted their focus to a nearly year-long trade spat with China that has threatened to disrupt the global economy.
Dow Snaps Winning Streak
All of Wall Street’s major indexes pivoted lower on Tuesday, snapping a dramatic winning streak that began at the start of last week. After gaining more than 200 points, the Dow Jones Industrial Average reversed course to settle down 14.17 points, or 0.1%, at 26,048.51.
The broad S&P 500 Index of large-cap stocks pared losses in the final hour to settle at 2,885.72, where it was virtually unchanged. Four of 11 primary sectors reported losses, with utilities leading the declines. Industrials companies also declined sharply, helping to offset gains in energy, communication services and communications stocks.
The technology-focused Nasdaq Composite Index settled at 7,822.57, little changed from Monday’s close.
Larry Kudlow: U.S. Economy Doesn’t Need China Trade Deal
Larry Kudlow, the director of the National Economic Council, told CNBC on Tuesday that the United States will maintain its solid growth pace with or without a China trade deal. His remarks came less than a week after the Department of Labor said the U.S. economy added just 75,000 workers last month, one of the weakest hiring rates since the financial crisis.
“The U.S. economy is very strong,” Kudlow told CNBC. “I think we’re in pretty good shape and I think we’ll maintain a 3% growth pace this year.”
An annual growth rate of 3% will be hard to maintain. According to the Atlanta Federal Reserve’s GDP tracker, the U.S. economy is on pace to expand just 1.4% annually in the second quarter. That’s less than half the growth clip of the January-March period.
Trade talks with China have been put on hold for more than a month after Beijing reportedly backed out of a deal. The stalemate will likely extend into the upcoming G20 summit in Osaka, Japan, which will host a face-to-face meeting between President Trump and China’s Xi Jinping.
Crypto Markets Range-Bound
Most of the top cryptocurrencies traded mostly lower on Tuesday, though losses were generally contained to a few percentage points. The cryptocurrency market cap hovered just north of $252.5 billion on Tuesday, down roughly $2 billion on the day.
Bitcoin (BTC) drifted further below $8,000 but managed to pare losses later in the session. It was last seen trading just below $7,900, having dropped 0.9%.
Ethereum (ETH), the second largest cryptocurrency, dipped 0.8% to $243.18. XRP’s price edged down 1.5% to $0.3916.25.
Litecoin (LTC) was the notable exception to Tuesday’s modest downtrend, gaining 6.1% to $134.57. With the gain, Litecoin has cemented itself as the fourth-largest cryptocurrency with a total market cap of around $8.4 billion. Bitcoin cash (BCH) was a distant fifth after falling more than 1%.
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.