Market Update: Stocks Bounce Back from Their Worst April Start in 89 Years

U.S. stocks advanced briskly on Tuesday, with the major indexes nearly reversing yesterday’s massive slump as investors brushed off geopolitical risks ahead of corporate earnings season.

Stocks Stage Relief Rally

The large-cap S&P 500 Index was up 1.3% by the close to settle at 2,614.45. All 11 primary sectors finished in positive territory, led by a 2.1% gain for energy stocks.

Information technology shares also bounced back from Monday’s rout, as the so-called FAANG stocks recovered. Shares of Facebook, Amazon, Apple, Netflix and Google parent Alphabet rose between 0.5% and 1.5% on Tuesday. The S&P 500’s technology index rose 1% as a result.

The Dow Jones Industrial Average rose 489.17 points, or 1.7%, to close at 24,033.36. Meanwhile, the Nasdaq Composite Index rallied 1% to close at 6,941.28.

Despite the gains, the major indexes were unable to completely offset Monday’s declines, which ranged from 1.9% and 2.7%. The losses marked Wall Street’s worst start to the second quarter since 1929, the year that kick started the Great Recession.

The CBOE VIX, commonly known as the “fear index,” fell 10.7% on Tuesday to close at 21.10. Vol spiked more than 18% at the start of the week.

Interestingly, stocks were on the way down earlier in the day after President Trump attacked Amazon for undermining the U.S. postal service. The president, who campaigned on a strongly protectionist agenda, triggered huge declines in the stock market last month by imposing new tariffs on commodity imports as well as Chinese goods.

Investors were much more optimistic on Tuesday ahead of what’s expected to be a robust corporate profit season. Analysts have revised their forecasts to show expectations of 17.3% growth in first-quarter profits. If projections hold, that would mark the best quarter since Q1 2011.

Cryptocurrencies Follow Bitcoin Higher

The cryptocurrency market rose as much as 8.3% on Tuesday, gains that were nearly identical to bitcoin’s daily recovery. The total market recovered to $281.3 billion, a new five-day high, according to CoinMarketCap.

Bitcoin’s recovery took prices to a daily high of $7,529. As bitcoin’s share of the market grows, its ability to influence altcoin prices has also risen. When the crypto market was valued at $830 billion, bitcoin’s share of the pie was less than a third. It now accounts for 45% of the total market cap.

The market’s ten largest cryptocurrencies all put up strong gains on Tuesday, with Litecoin leading the rally. LTC was up nearly 12% on the day to trade at $132.37. Ethereum also recovered 7.5% to $414. Ripple’s XRP advanced nearly 10% to $0.55.

Speculation about a possible takeover of the Japan-based Coincheck exchange was an important driver behind the latest recovery attempt. According to the Nikkei Asian Review, a publicly-traded company by the name of Monex could be ready to offer $10 million USD to acquire the exchange. Based on latest reports, the deal could be finalized as early as this 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.

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