Market Update: S&P 500, Nasdaq Hit Record Highs; Bitcoin Eyes Potential Breakout

U.S. stocks rose sharply on Friday, with two of Wall Street’s major indexes hitting record highs after Federal Reserve Chairman Jerome Powell defended the central bank’s approach to interest rate hikes. Meanwhile, bitcoin’s slow and steady recovery accelerated in afternoon trading, which prompted a wider rally in the cryptocurrency market.

Stocks Rise

The large-cap S&P 500 Index rose 0.6% to 2,874.69, its first record close since January. The Nasdaq Composite Index rose 0.9% to a new record high of 7,945.98. The Dow Jones Industrial Average gained 133.37 points, or 0.5%, to 25,790.35.

Materials and information technology stocks were the strongest performers on Friday. All but one of the 11 primary sectors tracked by the S&P 500 finished in positive territory.

The CBOE VIX, also known as the fear index, declined 3.1% to 12.02, the lowest in more than two weeks. The VIX trades on a scale of 1-100 where 20 represents the historic average.

Fed’s Powell Points to Further Rate Hikes Ahead

Federal Reserve Chairman Jerome Powell has defended his policy committee’s decision to raise interest rates gradually, arguing that the recent string of moves are necessary to prevent the market from overheating.

Speaking at the annual Jackson Hole Symposium in Wyoming, Powell said he wanted to “explain today why my colleagues and I believe that this gradual process… remains appropriate.”

“The economy is strong. Inflation is near our 2% objective, and most people who want a job are finding one … If the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate,” he added, according to Reuters.

The Fed’s policy-setting board is widely expected to raise interest rates at its forthcoming meeting in September. Based on current Fed Fund futures prices, traders also believe that another upward adjustment will be initiated in December.

Bitcoin Grinds Higher

The bitcoin price traded noticeably higher Friday, as the bulls eyed a corrective rally following a week of mostly tepid moves. At the time of writing, BTC was valued at $6,704 on Bitfinex for a gain of 2.7%. The leading digital currency traded as high as $6,716.60.

Unlike the previous rally, which was triggered by the temporary closure of a popular derivatives trading platform, the recent uptrend appears to be organic in nature. As Hacked predicted all week long, BTC is generating higher bids following the successful defense of a key resistance.

The broader cryptocurrency market followed bitcoin higher, with all major altcoins and tokens recording gains. The cryptocurrency market is currently valued at $216.4 billion, the highest since Wednesday. Trading volumes increased by $1 billion compared with 24 hours ago to $11.8 billion, according to CoinMarketCap.

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