Market Update: U.S. Stocks Struggle to Regain Ground Following Tumultuous Week; Bitcoin Stabilizes After Tether-Induced Spike

U.S. stocks traded lower on Monday, as markets failed to sustain a rebound following last week’s massive rout. Cryptoassets traded firmly higher after Tether’s controversial stablecoin lost its peg to the U.S. dollar.

Stocks Settle Lower

The large-cap S&P 500 Index drifted between gains and losses before settling down 0.6% at 2,750.79. Most primary sectors reported losses, with information technology falling 1.4%. Shares of energy companies closed down 0.6%.

Underperforming tech shares put the Nasdaq Composite Index on a lower path. The index settled down 0.9% at 7,430.74.

The Dow Jones Industrial Average declined 89.44 points, or 0.4%, to close at 25,250.55.

The major indexes bounced back sharply on Friday but still finished firmly lower for the week with losses ranging from 3.7% to 4.2%.

Rising bond yields have placed downward pressure on stock markets over the past two weeks. Since hitting more than seven-year highs, the yield on the benchmark 10-year U.S. Treasury yield has fallen back below 3.20%.

Economic Data Mixed

U.S. retail sales rose much less than expected in September, though other measures of consumer spending signaled strong momentum heading into the fourth quarter. Receipts at retail stores nudged up 0.1% last month following a similar gain in August, the Department of Commerce reported Monday. Analysts in a median estimate had called for a gain of 0.5%.

However, stripping away automobiles, gasoline, food services and building materials, receipts rose 0.5%. So-called core retail sales are more closely aligned with the consumer spending component that drives more than two-thirds of gross domestic product.

Consumer spending is being aided by tax cuts and a surging labor market. The national unemployment rate fell to 3.7% in September, the lowest in 49 years.

A second report from the Commerce Department on Monday showed business inventories rose 0.5% in August after climbing 0.7% the previous month.

Bitcoin Trade Volumes Surge

Bitcoin’s 24-hour trade volumes surpassed $7 billion on Monday for the first time in six weeks as investors cut ties to USDT, a controversial stablecoin that is used as a quote currency in crypto transactions. The leading digital currency peaked at $7,788.00 on Bitfinex, which processes a large volume of USDT transactions. That peak was roughly $900 higher than the highest price observed on exchanges that do not offer USDT trades.

At last check, bitcoin still had a large premium on Bitfinex, with prices up 6.2% to $6,724. The price quoted on CoinMarketCap is $6,579. Total turnover in BTC across all digital currency exchanges spiked to $7.1 billion.

USDT was down more than 6% at $0.94, with investors seemingly losing confidence in the coin. The stablecoin would later recover around $0.973.

The cryptocurrency market cap reached a high of around $221 billion on Monday before paring a large chunk of those gains to reach $210 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