Market Update: Stocks Rise as Canada, U.S. Salvage Free Trade Deal; Bitcoin Holds Its Ground
U.S. stocks finished mostly higher on Monday, as markets cheered a last-ditch effort by American and Canadian negotiators to salvage a new free trade agreement ahead of a self-imposed deadline by the Trump administration. Cryptocurrencies edged lower at the start of the week, though bitcoin came out largely unscathed for a slightly bigger share of the market.
Stocks Mostly Higher
Two of Wall Street’s three leading indexes rose on Monday, with the S&P 500 and Dow back within reach of record levels. The large-cap S&P 500 Index set a new intraday record before paring gains later in the day. The benchmark finished 0.4% higher at 2,924.69, with six of 11 primary sectors recording gains. The Dow Jones Industrial Average jumped 194.67 points, or 0.7%, to close at 26,652.98. Meanwhile, the technology-focused Nasdaq Composite Index stumbled in afternoon trading, falling 0.1% to 8,037.30.
Primary industries were the strongest performers on Monday. Shares of energy, materials and industrials companies rose more than 0.8% on average.
Canada, U.S. Agree on New Trade Accord
After more than a year of negotiation, Canada has officially joined the United States and Mexico in a new trade accord that will replace the decades old North American Free Trade Agreement (NAFTA). The surprise breakthrough happened late Sunday as Canadian and American negotiators raced against a self-imposed deadline set for Sept. 30.
By meeting the deadline, Congress can begin a mandatory 60-day review period before official signoff by the President. This also gives Mexico’s out-going President Enrique Pena Nieto enough time to sign the agreement before his far-left successor, Andres Manuel Lopez Obrador, assumes power.
President Trump lauded the NAFTA replacement as a “historic” deal that will solve many of the deficiencies of the previous regime.
U.S. Trade Representative Robert Lighthizer and Canada’s Foreign Affairs Minister Chrystia Freeland released the following joint statement:
“Today, Canada and the United States reached an agreement, alongside Mexico, on a new, modernized trade agreement for the 21st Century: the United States-Mexico-Canada Agreement (USMCA).
“USMCA will give our workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region.”
Crypto Markets Edge Lower
Cryptoassets maintained a defensive posture on Monday as XRP gave back most of its weekend advance and other leading altcoins failed to rise. The market capitalization of all cryptocurrencies touched a session low of $219.2 billion before rebounding above $220 billion.
Bitcoin, the largest crypto by market cap, was relatively unaffected by the slight downturn. BTC continues to trade between $6,550-$6,600 after fluctuating within a narrow range for most of the day.
Digital assets remain in a holding pattern despite improving market fundamentals and signs of growing adoption among institutions, businesses and even governments. The market remains in a firm downtrend after several failed breakout attempts.
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.