U.S. Stocks Backtrack on Trade Uncertainty; Bitcoin Plunges Below $9,500

The Dow and broader U.S. stock market traded mixed-to-lower on Tuesday after President Trump poured cold water on the prospect of an imminent trade deal with China. Meanwhile, cryptoassets plunged anew, with bitcoin testing its lowest levels in over three weeks.

Dow, S&P 500, Nasdaq Under Pressure

Wall Street’s three major indexes struggled to regain their footing after eking out fresh records on Monday. The Dow Jones Industrial Average traded within a 108-point range before settling down 23.53 points, or 0.1%, at 27,335.63.

Dow Jones Industrial Average drifts from record territory. | Source: Stockcharts.com.

The broad S&P 500 Index of large-cap stocks declined 0.3% to 3,004.04, with seven of 11 primary sectors reporting losses. The bulk of the declines were concentrated in energy and information technology stocks.

Sliding technology shares weighed on the Nasdaq Composite Index, which fell 0.4% to 8,222.80.

U.S.-China Trade Deal Sill “A Long Way to Go”

The United States and China still have “a long way to go” before reaching a new trade agreement, President Trump told reporters on Tuesday. Trump said additional tariffs targeting Chinese imports could be on the way.

Just a few weeks ago, Treasury Secretary Steven Mnuchin said both sides were about “90% of the way” toward a new agreement. The nature of the hold up isn’t entirely clear at this point, although China’s industrial policy and Washington’s blacklisting of Huawei are likely factoring into the fray.

Negotiations are resuming after Trump and Chinese counterpart Xi Jinping agreed to suspend hostilities at the most recent G20 meeting in Osaka, Japan.

The nearly year-long trade war appears to have hastened China’s economic slowdown. On Monday, Beijing reported that annual gross domestic product (GDP) expanded just 6.2% in the second quarter, the weakest in 27 years.

The U.S. economy likely experienced a brisk slowdown in the second quarter, with the Atlanta Fed pegging Q2 growth at just 1.6%, according to the latest estimate.

Bitcoin’s Punishing Reversal

Bitcoin and the broader cryptocurrency market plunged anew on Tuesday, as coin values continued to unwind from last month’s bull run. Bitcoin, which now accounts for nearly 67% of the overall cryptocurrency market, plunged more than 11% to a low of $9,467. It was last down 10% at $9,735, according to CoinMarketCap.

Bitcoin’s correction deepens; BTC/USD briefly falls below $9,500. | Source: CoinMarketCap.

No major cryptocurrency in the top 30 was spared from the punishing reversal. Double-digit losses were reported by Ethereum, bitcoin cash, Litecoin and EOS. Many of these coins broke below critical support areas, with ether falling below $200, XRP losing the 30-cent handle and Litecoin crashing below $80.

Markets looked poised to recover late Monday but saw their gains quickly fizzle. The total cryptocurrency market cap is now worth $261.8 billion, a decline of roughly $130 billion from last month’s high.

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. Charts via Stockcharts.com and CoinMarketCap.

 

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