Market Update: Stocks Pare Losses as Trump Exits Iran Nuclear Deal
U.S. stocks cut their losses on Tuesday after President Trump abandoned the 2015 Iran nuclear accord, setting the stage for renewed sanctions against the Islamic Republic.
All of Wall Street’s major indexes reversed losses to finish flat on Tuesday. The large-cap S&P 500 Index erased losses 0.5%, closing flat at 2,671.92. Seven of 11 primary finished lower.
Utilities stocks were the biggest decliners; as a sector, they fell 2.5%. Shares of telecom services plunged 1.3%. On the opposite side of the ledger, energy shares rallied 0.8% and financials finished 0.7% higher.
The Dow Jones Industrial Average was down triple digits in afternoon trading before reversing course to settle at 24,360.21, where it was virtually unchanged from the previous close. Meanwhile, the technology-heavy Nasdaq Composite Index closed at 7,366.90, also little changed.
The CBOE Volatility Index, also known as the VIX, reversed gains to finish slightly lower for the day. Wall Street’s favorite fear gauge slipped 0.3% to close at 14.71, where it continued to trade below the historic average.
Trump Abandons Iran Nuclear Deal
President Trump on Tuesday formally withdrew the United States from the Iran nuclear deal, setting the stage for the resumption of sanctions against Tehran. The landmark agreement, which was signed in 2015, provided Iran with sanctions relief in exchange for key limitation to the country’s nuclear program.
President Trump described the nuclear accord as “the worst deal ever” despite the fact that it was brokered by six superpowers, including the U.S., U.K., Russia, France, China and Germany.
Sanctioning Iran will likely mean a sharp drop in the country’s oil exports, a move that could help OPEC rebalance global crude market leading to higher prices. The Iranian government has come out against costlier crude, arguing instead that a $60-$65 per barrel range is more appropriate.
Cryptocurrencies Fail to Extend Rally
The global cryptocurrency market headed lower no Tuesday, as bitcoin and the major altcoins failed to hold intraday gains. By the afternoon, cryptocurrencies were valued at $436.2 billion, a decline of roughly $6 billion over the previous 24 hours. At their highest point, crypto assets had a combined market cap of $448.3 billion.
All major cryptocurrencies recorded declines on Tuesday. Bitcoin fell nearly 2% to $9,255, reversing earlier gains that saw prices climb back above $9,400.
Bitcoin cash declined more than 4% to $1,592. Litecoin prices also fell 3.8% to $159.
Hacked reported earlier that the parent company of the New York Stock Exchange was considering launching its own bitcoin trading platform and that talks had progressed beyond the early concept stage.
According to The New York Times, Intercontinental Exchange (ICE) is interested in developing its own crypto exchange that would make digital assets available to large institutional investors.
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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.
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