Market Update: Wall Street’s Roller Coaster Continues as Dow Rebounds 669 Points

U.S. stocks rebounded sharply on Monday, with the Dow recouping nearly 700 points on reports that China has offered to buy more American-made semiconductors. The two superpowers engaged in a tit-for-tat tariff war last week after President Trump announced new import levies on Chinese goods.

Wall Street’s Best Day Since 2015

In a dramatic relief rally, U.S. stocks on Monday posted their biggest single-day advance since 2015. The Dow Jones Industrial Average rose 669.40 points, or 2.8%, to 24,202.60. All but one of the Dow’s 30 index members finished in positive territory.

The broader S&P 500 Index rebounded 2.7% to close at 2,658.55, with all 11 primary sectors finishing higher.

Shares of information technology companies surged 4%. Financials were also up 3.4% as a sector. Overall, no S&P 500 sector rose less than 0.9%.

Surging tech shares drove the Nasdaq Composite Index to gains of 3.3%, with the benchmark closing at 7,220.54.

Even with the recovery effort, stocks remain well below last week’s levels, with the Dow and S&P 500 still trading in negative territory for the year.

A measure of 30-day volatility known as the CBOE VIX fell 15.4% to close at 21.03, The so-called “fear index,” which trades on a scale of 1-100, spiked on Friday to its highest level since mid-February.

Trade Tensions Ease

According to multiple reports, China has offered to buy more U.S. semiconductors in an attempt to stave off an escalating trade war between the two countries. President Trump slapped China with $60 billion in import duties last week, which triggered swift retaliation from China.

President Trump has vowed Market Update: Wall Street’s Roller Coaster Continues as Dow Rebounds 700 Points

to fight back against China’s unfair trade practices, including reversing Washington’s $375 billion deficit with the Asian country.

It remains to be seen whether the Trump administration will arrive at the same conclusion as investors: namely, that a trade war is in nobody’s best interest. The president had previously stated that a trade war was not only a good thing, but easily winnable. Although Trump has faced significant backlash for his protectionist agenda, his pursuit of tariffs is legal and well aligned with his campaign promise.

Cryptocurrencies Extend Slide

Monday was another down day for global cryptocurrencies after Twitter formally announced a ban on digital currency ads. In doing so, the social media giant joins Facebook and Google in shutting down crypto marketing.

Bitcoin fell more than 8% to a low of $7,865, but saw its share of the market rise to nearly 45%. At the time of writing, bitcoin’s total market cap was $134.4 billion, according to CoinMarketCap.

Losses extended to the top-10 digital currencies and beyond, with Ethereum, Ripple XRP, bitcoin cash and Litecoin plunging at least 9%. Cardano, EOS, NEO and IOTA were down at least 10% apiece.

The combined market cap for all coins fell from $332 billion to $301 billion on Monday for a loss of more than 9%.

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.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, 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