Market Update: U.S. Stocks Rebound Sharply as Earnings Season Underway; Cryptos Stabilize After Wild Monday

U.S. stocks rebounded sharply on Tuesday, with the Dow adding more than 500 points as traders set their sights on corporate earnings. Meanwhile, cryptocurrecy prices hovered in a narrow range as trade volumes returned to normal.

Stocks in Recovery Mode

All of Wall Street’s major bourses posted large gains on Tuesday, with the large-cap S&P 500 Index advancing 2.2% to 2,810.05. All 11 primary sectors contributed to the gains, with shares of information technology and the closely related communication services companies leading the rally.

A strong performance in technology sent the Nasdaq Composite Index surging. The tech-laden average jumped 2.9% to close at 7,645.49.

Meanwhile, the Dow Jones Industrial Average rose 547.87 points, or 2.2%, to 25,798.87.

The CBOE Volatility Index, commonly known as the VIX, plunged 17.3% to 17.62 on a scale of 1-100 where 20 normally represents the long-term average. The so-called fear gauge spiked to six-month highs last week during the height of the stock-market selloff.

Corporate Earnings in the Spotlight

Wall Street is gearing up for another high-flying earnings season, with analysts at FactSet forecasting one of the best quarters since 2011. A trio of bank earnings last Friday kicked off the earnings quarter, with Citigroup Inc. (CI), Wells Fargo & Co (WFC) and JPMorgan Chase & Co (JPM) all reporting sound numbers.

Shares of Goldman Sachs Group Inc. (GS) rose sharply on Tuesday after the Wall Street mega bank reported better than expected per-share earnings. Morgan Stanley (MS) saw its share price rally after posting a 20% jump in profits on the quarter as revenues also increased. UnitedHealth Group Inc. (UNH), a Dow blue-chip, also posted firm gains after reporting top- and bottom-line results that were higher than expected.

Johnson & Johnson (JNJ), another Dow company, also reported better than expected earnings and revenue for the most recent quarter.

Cryptos Hold Steady

Bitcoin and the wider cryptocurrency market traded within a narrow range on Tuesday, as turnover fell more than 40% from the previous day’s high. In the process, Tether’s USDT stablecoin rose modestly after losing its one-for-one peg with the U.S. dollar.

Since peaking above $221 billion at the start of the week, the cryptocurrency market capitalization has stabilized around the $210-$212 billion range. Bitcoin, the largest crypto by market cap, traded steady at $6,575. The bitcoin price continues to trade at a significant premium on Bitfinex and other digital currency exchanges that facilitate trading of USDT.

As Hacked reported earlier, Tether took $300 million worth of USDT tokens out of circulation last week. One of the transactions, worth $100 million, was carried out on Oct. 9 with the remainder being moved five days later.

USDT plunged by as much as 6% on Monday, which triggered a sharp rise in the value of bitcoin and commensurate gains in the broader market.

The combined value of all cryptocurrencies currently hovers just above $211 billion, according to CoinMarketCap. Daily trade volumes amounted to roughly $12.2 billion.

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