Market Update: Stocks Rebound as Syria War Talk Fades; Cryptocurrencies Crack $300 billion
U.S. stocks rebounded on Thursday, with the Dow adding nearly 300 points after President Trump clarified his position on renewed Syrian warfare. Meanwhile, the cryptocurrencies cracked $300 billion for the first time in two weeks as optimism returned to the market.
Stocks Recover as Volatility Ebbs
All of Wall Street’s major indexes finished higher on Thursday, more than offsetting the previous day’s slump.
The Dow blue-chip index added 293.60 points, or 1.2%, to close at 24,483.05. Twenty-four of 30 index members contributed to the rally, led by Intel Corp (INTC), The Boeing Company (BA) and DowDuPont (DD).
The broader S&P 500 Index rose 0.8% to 2,663.99, led by financials and technology stocks. Six of the S&P 500’s 11 primary sectors recorded gains.
A strong tech sector propelled the Nasdaq Composite Index to gains of 1%. The average closed at 7,140.25.
A measure of implied volatility over the next 30 days declined sharply on Thursday as calm returned to Wall Street. The CBOE VIX, Wall Street’s preferred measure of investor anxiety, fell 8.7% to 18.49. That was its lowest settlement in two weeks.
Trump and Syria
President Trump made a series of clarifying tweets Thursday that seemed to have removed the urgency of a Syrian missile strike. “Never said when attack on Syria would take place,” the president tweeted from his @realDonaldTrump Twitter handle.
Trump is weighing a military strike on the Assad regime over an alleged chemical attack that killed dozens of civilians. However, many have questioned the narrative that the Assad regime carried out the attacks given that the president’s forces and its allies have been making steady gains for many months.
International inspectors were on its way to Syria Thursday to investigate the alleged chemical weapons attack.
In a speech at the United Nations Thursday, Russia’s U.N. Ambassador Vassily Nebenzia warned the Trump administration against attacking Syria’s sovereignty.
“We hope that there will be no point of no return — that the U.S. and their allies will refrain from military action against a sovereign state,” he said.
Cryptocurrencies Hit Multi-Week Highs
Crypto assets extended their weeklong recovery on Thursday, with the total market cap rising to $309.5 billion.
Bitcoin and Ethereum led the rally, each rising 11% or more. Bitcoin reached a high of $7,765, bringing its total market cap north of $130 billion. Meanwhile, ether’s price point jumped to $475.
Bargain hunters and the winding down of tax season appear to be the major catalyst for the recent rally. We predicted earlier in the week that selling pressure would likely begin fading after the Apr. 17 Tax Day for U.S. traders.
It is estimated that U.S. crypto investors owe the IRS $25 billion in capital gains taxes for 2017. That represents about 20% of the capital gains haul the IRS expects to collect for the year.
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.