Market Update: U.S. Stocks Extend Rally as Hurricane Florence Approaches East Coast; Cryptocurrencies Under Pressure
U.S. stocks advanced Tuesday, as surging oil prices boosted energy companies ahead of the anticipated landfall of a category 4 hurricane on the Carolina coast. Meanwhile, cryptocurrencies failed to shake off bearish pressure despite several major breakthroughs on the regulatory and custody fronts.
Stocks Extend Rally
All of Wall Street’s major indexes reported firm gains on Tuesday, with the S&P 500 and Nasdaq extending their rally to two days. The large-cap S&P 500 Index rose 0.4% to 2,887.89, with energy, information technology, consumer discretionary and telecom services leading the way. Each sector rose at least 0.8% by the close. Meanwhile, the tech-driven Nasdaq Composite Index climbed 0.6% to 7,972.47.
Dow industrials also rose after missing out on the Monday rally. The Dow Jones Industrial Average rose 113.99 points, or 0.4%, to close at 25,971.06
The Chicago Board Options Exchange (CBOE) Volatility Index declined for a second consecutive day as calm returned to Wall Street. The so-called fear gauge fell 6.6% to 13.22 on a mean-reverting scale of 1-100 where 20 represents the historic average.
Oil Prices Surge
Crude oil jumped more than 2% on Tuesday as the U.S. east coast braced for Hurricane Florence, a category 4 storm that is expected to make landfall this week. Analysts say damages from the storm could easily top $30 billion based on current meteorological projections.
U.S. West Texas Intermediate (WTI) for October settlement rose $1.85, or 2.7%, to $69.39 a barrel on the New York Mercantile Exchange. Brent crude, the international futures benchmark, climbed $1.79, or 2.3%, to $79.16 a barrel.
President Trump’s sanctions against Iran could send crude prices soaring as global supplies diminish. Fereidun Fesharaki, founder and chairman of consultancy FACTS Global Energy, recently told CNBC that crude barrels could top $100 in the not-too-distant future. Sanctions against the Islamic Republic were re-imposed after the Trump administration formally withdrew from the nuclear accord earlier this year.
Cryptocurrency Sink to 2018 Lows
Altcoins and tokens continued to shed market cap on Tuesday, pushing bitcoin’s dominance rate to new yearly highs. At the time of writing, bitcoin’s share of the overall cryptocurrency market was a hair below 57%, the highest since December. The combined value of all cryptoassets bottomed at $189.5 billion, the lowest since Nov. 1.
Ethereum fell 5.7% to $183, its lowest since May 2017, amid news that ERC-20 tokens had spent tens of millions of dollars worth of ETH, possibly as part of a liquidation for fiat currency. Bitcoin cash was also among the worst performers, falling 6.5% to $437.
Bitcoin continued to hold firm near $6,300 with the market establishing a firm price floor near $6,000. The leading digital currency has seen its volatility decline in recent sessions even as traders continue to offload altcoins and tokens.
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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