The US stock market continued to rise ahead of Friday’s opening bell, with the Dow flashing triple-digit gains and its sister indices making similarly-bullish strides. Bitcoin, though, entered the day with little momentum as the cryptocurrency market demonstrated a lack of conviction.
As of am 8:21 am ET, Dow Jones Industrial Average futures had gained 157 points or 0.65 percent while S&P 500 and Nasdaq futures had climbed 0.45 percent and 0.48 percent, respectively.
The three major US stock market indices had recorded solid advances on Thursday. The Dow closed at 24,370.10 after rising 162.94 points or 0.67 percent, the S&P 500 ended the session at 2,635.96 after rising 0.76 percent, and the tech-heavy Nasdaq put the 7,000 mark further in its rearview mirror following a daily gain of 0.71 percent.
Thursday’s rally was partially sparked by a Wall Street Journal report that US officials had held high-level discussions about scaling back tariffs that the US had placed on Chinese imports as part of the ongoing trade war between the two economic superpowers.
According to that report, which cited “people close to internal deliberations,” Treasury Secretary Steven Mnuchin himself had proposed lifting some — or even all — of the tariffs. However, US Trade Representative Robert Lighthizer is not on board with Mnuchin’s plan, as he believes easing off tariffs would convey weakness and take the pressure off Beijing to cut a new deal.
Nevertheless, the indication that one of US President Donald Trump’s cabinet secretaries was pushing to scale back the trade war gave a jolt to major stock market indices including the Dow, which climbed more than 250 points before paring those gains after a senior government official disputed that Mnuchin had recommended cutting tariffs.
To some analysts, that jump was an indication the markets are a “coiled spring” awaiting a trade war resolution.
In any case, Wall Street’s optimists seem to be prevailing, at least ahead of the opening bell. But will they sustain that momentum through Friday’s close?
The stock market rally has not extended to bitcoin or its peers, which eToro Senior Market Analyst Mati Greenspan says are increasingly “apathetic” to what is happening in the wider financial markets.
Since the beginning of 2019, Greenspan said in daily market commentary made available to CCN, “the short-term correlations between bitcoin and gold, the US Dollar, and the stock markets have all moved to near zero. They just DGAF.”
It’s not clear whether the crypto market will sustain this trend throughout the year, but if it does then bitcoin could position itself as a viable economic hedge, if and when a recession arrives.
In the meantime, the bitcoin price enters the day with a 24-hour increase of 0.48 percent, currently trading at a global average of $3,651.
The flagship cryptocurrency is down 1.10% from where it was a week ago, owing to a multi-stage sell-off that put the market dangerously close to what some — but not all — analysts have identified as a crucial support level.
Daily altcoin returns have been mixed, with ripple (XRP) and bitcoin cash signaling losses of around 0.75 percent while EOS, tron, and IOTA, have all climbed at least 1 percent.
Featured Image from Shutterstock. Price Charts from TradingView.
Last modified: May 20, 2020 12:56 PM