U.S. Stocks Rise on China’s Evolving Industrial Blueprint; Cryptos See Modest Progress following Heavy Selling

U.S. stocks rebounded sharply on Wednesday as investors shifted from apprehension to optimism on China trade negotiations. Cryptocurrencies stemmed early-week volatility but failed to muster much of a rally as trade volumes dropped.

Relief Rally

Wall Street’s major indexes recovered sharply midweek, shifting the balance back in favor of the bulls for the time being. The large-cap S&P 500 Index climbed 0.5% to 2,651.07, with sectors ranging from information technology to consumer discretionary posting large gains. Five of 11 primary sectors reported gains in excess of 1%. Real estate and utilities were the only laggards on the day.

The Dow Jones Industrial Average jumped 157.03 points, or 0.6%, to 24,527.27. The blue-chip index was up 450 points earlier in the session.

Meanwhile, the technology-focused Nasdaq Composite Index closed up 1% at 7,098.31.

China in the Spotlight

Investors got the go-ahead to bid up stocks amid reports that China was seeking to replace industrial policy that favored domestic companies across a range of vital industries. The new plan will reportedly open the door to foreign companies looking to set up shop in the world’s second-largest economy. As Hacked reported on Tuesday, the policy in question is called the Made in China 2025 plan.

The Wall Street Journal reported Wednesday that the blueprint was already being re-drawn in an effort to appease the Trump administration amid ongoing trade negotiations. Earlier this week, China agreed to reduce tariffs on U.S. automobiles to 15% from 40%.

Efforts to renegotiate free trade agreements comes in the wake of a face-to-face meeting between presidents Trump and Xi earlier this month. Both leaders held productive talks on the sidelines of the G20 summit in Buenos Aires, Argentina. This included a three-month truce not to escalate the trade war.

Cryptos Get Some Relief

Cryptocurrencies saw modest upside on Wednesday, as the majors recovered slightly from their most recent beating that nearly drove values to new yearly lows.

Bitcoin, XRP and Ethereum all recorded gains in excess of 2%, helping engineer a broad-based recovery in the market. Bitcoin was back above $3,500, while XRP returned above the vital 30-cent mark. Looking further down the market rankings, EOS jumped 8% to overtake bitcoin cash for sixth spot on the list. The digital currency was last seen trading just above $2.00.

Most coins ranked in the top-20 traded higher on Wednesday. The combined market cap rose to $111 billion as a result. However, trade volumes fell by nearly $800 million to $12.2 billion, with BitMEX seeing a drop off in activity compared with the heavy selling pressure observed earlier in the week. BitMEX has emerged as a popular venue for shorting bitcoin, which has wreaked all sorts of havoc on the leading digital currency and the market as a whole.

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 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