U.S. Stocks Slump Ahead of Big Earnings Reports; Crypto Markets Stabilize After Volatile Week

The Dow and broader U.S. stock market extended their slump on Wednesday, as investors geared up for high-profile earnings reports from Wall Street’s biggest tech firms. Meanwhile, cryptocurrencies stopped their hemorrhaging, with Litecoin leading an oversold rally that extended to most major assets.

Dow Slides; S&P 500, Nasdaq Follow

The major U.S. indexes remained under pressure midweek, as market participants evaluated ongoing trade tensions between the United States and China. The Dow Jones Industrial Average fell 115.78 points, or 0.4%, to 27,219.85.

Dow Jones Industrial Average falls more than 100 points to settle near session lows. | Source: Stockcharts.com.

The broad S&P 500 Index of large-cap stocks closed down 0.7% at 2,984.42. Nine of 11 primary sectors reported declines, with industrials falling more than 2%. Shares of energy companies were down more than 1% on average.

Meanwhile, the technology-focused Nasdaq Composite Index fell 0.5% to finish at 8,185.21.

Earnings Coming in Droves

Technology stocks will headline earnings in the latter half of the week, with Dow blue-chips IBM Corp (NYSE:IBM) and Microsoft Corp (NASDAQ:MSFT) scheduled to report on Wednesday and Thursday, respectively. Streaming giant Netflix (NASDAQ:NFLX) will also report its quarterly financial results after the bell Wednesday.

Alcoa Corp (NYSE:AA), Texas Instruments Inc. (NASDAQ:TXN) and American Express Inc. (NYSE:AXP) are also on deck this week.

Second-quarter earnings season is off to a good start. JPMorgan, Citigroup, Wells Fargo and Goldman Sachs all reported better than expected profits, highlighting the resiliency of America’s largest banks.

Taken together, S&P 500 companies are projected to report an earnings decline of 3% in the second quarter, according to FactSet. That would mark the second straight quarter of year-over-year declines, the first such fear since 2016.

Crypto Markets Stabilize

After a weeklong correction, cryptoassets are showing signs of stabilizing Wednesday, raising cautious optimism that the worst of the downturn had passed.

Bitcoin, the largest and most influential cryptocurrencies, tested $9,000 earlier in the day but has since recovered above $9,700, according to CoinMarketCap. Bitcoin’s dominance rate remains well above 65%.

Litecoin led the altcoin segment on Wednesday, climbing 12.7 to $89.83. The silver to bitcoin’s gold bottomed near $77 earlier in the week, culminating a 46% drop from the yearly high.

Most of the top cryptocurrencies were reporting gains through the afternoon session. Ethereum, XRP, bitcoin cash and EOS each rose by at least 4%.

The total cryptocurrency market cap was valued at $266.7 billion, rebounding $18 billion from Wednesday’s low.

Crypto markets show signs of stabilizing after volatile week. | Source: CoinMarketCap.

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.

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