US stocks continue week-long dip amid massive Bitcoin sell off
- 20th May 2021
- Posted by: Hakeem
- Category: Stock
After a chaotic day at the financial market, Dow Jones futures, S&P 500 futures, and Nasdaq futures all sank somewhat late Wednesday. Overnight, the spotlight was on Cisco results, the Ford F-150 Lightning, and Bitcoin’s price swings which tanked related stocks in Wall Street.
Cisco shares fell 5.62 percent in extended trade after the data centre networking hardware maker announced earnings projections for the current quarter that was lower than expected.
The swings in futures came after a roller-coaster session on Wall Street prompted by a rapid sell-off in several speculative parts of the market due to a precipitous decrease in bitcoin price. Bitcoin-related stocks, such as Tesla, Coinbase, and MicroStrategy, led the market down Wednesday, with bitcoin falling as much as 30%.
The major indexes tested key levels Wednesday morning while Bitcoin cratered, only for equities and cryptocurrencies to rebound well off lows. The S&P 500 and Dow Jones found support at their 50-day moving averages while the Nasdaq held above last week’s lows. Still, they all closed down for a third-straight session. The S&P 500 fell 1.6 percent to its session low but recovered most of its losses to close down just 0.3 percent as the market stabilized and bitcoin rose off its low. After dropping 580 points at one point, the blue-chip Dow completed the session approximately 160 points lower. The Nasdaq Composite, which is heavily weighted in technology, finished the day flat, reversing a 1.7 percent loss.
Furthermore, Bitcoin plummeted to a little over $30,000 on Wednesday morning, then swiftly rebounded, though the price was still substantially lower than Tuesday. Bitcoin has been falling in value since Tesla (TSLA) CEO Elon Musk turned on the biggest digital asset last week, but Musk offered some new support on Wednesday.
Coinbase (COIN) hit a new low after an outage on Wednesday morning. Before paring losses, Microstrategy (MSTR), Grayscale Bitcoin Trust (GBTC), and other Bitcoin plays dropped down.
Buy signals were flashed by Target (TGT), Facebook (FB), Google parent Alphabet (GOOGL), Maravai LifeSciences (MRVI), and Trip.com (TCOM). However, the current market situation is not conducive to fresh purchases.
Commodity-related stocks, such as miners, metals, and fertilizers, have all declined as crude oil, copper, lumber, and other commodity prices have fallen. Airlines, which had shown promise the day before, retreated on Wednesday. Financials were also a problem.
The first official indication that the Federal Reserve is considering slowing bond purchases came from policymakers at the Fed. The announcement boosted Treasury yields and the dollar, but it didn’t seem to have much of an effect on stocks.