Market Update: U.S. Stock Rally Pauses amid Rising Bond Yields; Cryptocurrency Market Regains $200 Billion

U.S. stocks traded mostly flat on Friday, as rising bond yields quelled investors’ appetite for riskier assets. Meanwhile, cryptocurrencies regained a key threshold as bitcoin and Ethereum showcased renewed strength.

Stocks End Mixed

All of Wall Street’s major indexes closed near break-even on Friday. The S&P 500 Index finished at 2,905.01, while the Dow settled at 26,154.61. Both indexes were virtually unchanged. Meanwhile, the technology-focused Nasdaq Composite Index edged down 0.1% by the close to finish at 8,010.04.

The CBOE VIX, also known as the fear index, declined for a fifth straight session on Friday. The volatility gauge fell 2.4% to 12.07 on a scale of 1-100 where 20 represents the historic average.

Stocks were pressured after the benchmark U.S. 10-year Treasury yield briefly surpassed 3%. Financial markets have been on edge amid conflicting reports on the status of trade negotiations between China and the United States. On Thursday, China’s Commerce Ministry confirmed that it had accepted Washington’s offer of resuming trade talks in the near future.

Economic Data

U.S. consumer spending weakened more than expected in August, though the general trend remains positive, according to the latest report on retail sales. Receipts at retail stores edged up 0.1% in August following an upwardly revised gain of 0.9% the previous month, the Department of Commerce reported Friday. Analysts had called for a monthly gain of 0.4%.

Americans are feeling better about the economy and their future prospects, according to a closely-watched sentiment indicator. The University of Michigan’s consumer sentiment index strengthened to 100.8 in September, the second-highest reading since 2004 and well above estimates of 96.6.

Meanwhile, U.S. industrial production accelerated faster than expected last month, a sign that factory conditions were improving. Production across manufacturing, utilities and mining companies rose 0.4% in August following a similar gain the month before, the Federal Reserve reported Friday.

Cryptocurrency Market Regains $200 Billion

The cryptocurrency market extended its recovery beyond $200 billion on Friday, as Ethereum added to its double-digit gains and bitcoin stabilized near $6,500. The crypto market cap peaked at $204.2 billion and was last spotted at $2202.7 billion.

Billionaire investor Mike Novogratz believes that the worst of the bear market is over and that a bullish breakout could be imminent. Citing data from Galaxy Digital’s crypto price index, he said prices have “retouched the highs of late last year and the point of acceleration that led to the massive rally/bubble.”

However, not everyone is convinced that altcoins and tokens will be part of any future rally. BitPay executive Sonny Singh recently told Bloomberg that his firm has “never been more bullish on bitcoin but that altcoins and tokens “will never come back … in the same way a bitcoin will come back.”

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