Market Update: Retailers Lifts Wall Street as Focus Shifts to Geopolitics 

U.S. stocks snapped back to health Wednesday after positive quarterly results from one of America’s biggest retailers propelled discretionary shares higher. However, gains were tempered by the resumption of geopolitical tensions on the Korean peninsula after Kim Jong-un threatened to pull out of a planned summit with the United States next month.

Stocks Rally

All of Wall Street’s major indexes ticked higher in mid-week trading, with the S&P 500 Index gaining 0.4% to 2,722.46. Discretionary shares were among the best performers, with multi-line retail surging.

Retailers rose sharply after Macy’s reported better than expected quarterly results. The department store exceeded expectations for same-store sales and boosted its targets for the fiscal year.

The Dow Jones Industrial Average climbed 62.52 points, or 0.3%, to close at 24,768.93.

Meanwhile, the technology-driven Nasdaq Composite Index jumped 0.6% to finish at 7,398.30.

Equities faced a brisk sell-off Tuesday as benchmark 10-year U.S. Treasury yields surged to their highest level since 2011. The declines were accompanied by a sharp rise in expected volatility, with the CBOE VIX reaching its highest level in a week.

The VIX gave back much of those gains Wednesday, closing down 8.2% at 13.43.

Diplomatic Tensions in Korea

North Korea cancelled high-level talks with the South on Wednesday and threatened a unilateral withdrawal from a planned summit with U.S. President Donald Trump to protest ongoing military exercises in the region.

The decision came as the United States and South Korea staged joint military drills in the region. Pyongyang’s state-run Korean Central News Agency (KCNA) called drills a “provocative military racket” and “undisguised challenge” to its sovereignty.

North Korean leader Kim Jong-un and U.S. President Trump are scheduled to meet in Singapore June 12. The White House confirmed that it expects talks to proceed next month.

“The president is ready if the meeting takes place,” said White House spokesperson Sarah Sanders. “If it doesn’t, we’ll continue the maximum pressure campaign that’s been ongoing.”

Cryptocurrencies Stabilize Following Sell-Off

Digital currencies held relatively steady Wednesday after an overnight sell-off wiped nearly $25 billion from the collective market cap.

The total value of all cryptocurrencies in circulation stabilized at $380 billion Wednesday, according to data provider CoinMarketCap. Values peaked above $396 billion earlier in the day.

All major assets are down compared with 24 hours ago, with the heaviest losses reported among altcoins. Bitcoin cash (BCH) fell more than 6% to $1,272 following Tuesday’s hard fork.

Stellar XLM was down almost 7% at $0.329. Cardano and EOS each fell more than 5%.

Bitcoin prices swung lower by 2.7% to trade at $8,307. Its share of the total market strengthened to 37.3%.

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.

Chief Editor to and Contributor to, 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