Market Update: U.S. Stocks Rise Ahead of China Trade Talks; Cryptocurrencies Rebound Sharply

U.S. stocks advanced Thursday, bolstered by optimism that China and the United States will revive trade negotiations later this month.

Stocks Rise

All of Wall Street’s major indexes booked solid gains as rebounding tech shares provided much of the catalyst. The large-cap S&P 500 Index rose 0.5% to 2,904.18, with seven of 11 primary sectors recording gains. Information technology and healthcare were the strongest performers.

The Nasdaq Composite Index rose 0.8% to 8,013.71. The Dow Jones Industrial Average climbed 147.07 points, or 0.6%, to 26,145 99.

The CBOE Volatility Index, also known as the VIX, fell 5 4% to 12.43. The so-called “fear index” trades on a scale of 1-100 where 20 represents the historic average. Most of the time, VIX trades in the opposite direction of the S&P 500.

China-U.S. Trade Talks in Focus

China has welcomed the Trump administration’s offer to revive trade talks between the two superpowers, according to Beijing’s Ministry of Commerce. Ministry spokesman Gao Feng confirmed Thursday that both countries were planning a new round of negotiations later this month.

“The escalation of trade conflicts doesn’t benefit either side’s interests,” Gao said Thursday.

The news helped sooth investors’ fears of a more protracted trade war after President Trump threatened to tax virtually all of China’s exports to the U.S. Last week, Trump indicated that tariffs on $200 billion of Chinese goods could be implemented “very soon.” He also threatened levies on an additional $267 billion worth of Chinese-made products.

Meanwhile, efforts to renegotiate the North American Free Trade Agreement (NAFTA) have paused momentarily after Canada’s envoy retuned home following another round of failed talks. Canada has reportedly made concessions on its dairy industry but has yet to budge on the Chapter 19 dispute resolution mechanism.

Cryptocurrencies Bounce

Cryptocurrencies staged an impressive relief rally on Thursday, as altcoins and tokens bounced off oversold levels. The combined value of all digital currencies rose by as much as $15 billion to $201 billion, according to CoinMarketCap. The market bottomed at yearly lows during the previous session.

At the time of writing, the crypto market was capitalized near $199 billion.

Ethereum rose 17% after plunging to 16-month lows on Wednesday. The second-largest cryptocurrency by market cap is now sitting at $206, according to latest available data. All major altcoins and tokens followed ether’s lead, with EOS, Monero and Tron putting up the biggest gains.

Bitcoin, which has gradually decoupled itself from the broader market, broke $6,500 for the first time this week. In doing so, BTC’s price cut above the 50-period moving average, a positive sign for the bulls.

The Thursday rally was accompanied by a sharp rise in trading volume. Twenty-four hour turnover rose 15% to $13.7 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