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Market Update: U.S. Stocks on Edge amid NAFTA Doubts; Bitcoin Price Claws Back Above $7,000  

U.S. stocks failed to sustain their record levels on Thursday, as buyers took a breather ahead of the Labor Day long weekend. In cryptocurrencies, bitcoin fell below $7,000 after crossing into overbought territory during the previous session.

Stocks Retreat

All of Wall Street’s major indexes finished lower on Thursday, with the S&P 500 and Nasdaq snapping four days of record gains. The S&P 500 large-cap index finished off 0.4% at 2,901.13. Nearly all major sectors finished lower, with materials and industrials stocks leading the declines. The Nasdaq Composite Index, a proxy for technology stocks, declined 0.3% to close at 8,088.36. Dow industrials fell 137.65 points, or 0.5%, to end at 25,986.92.

The CBOE Volatility Index, also known as the VIX, moved in the opposite direction of stocks. The so-called fear index jumped 10.5% to 13.54, its highest in almost two weeks. VIX trades on a scale of 1-100 where 20 represents the historic average.

Economic Data Largely Positive

The U.S. economy is showing considerable poise in the third quarter, as consumer spending, inflation and employment resume their upward trend.

Personal spending rose 0.3% in July following a similar gain the previous month, the Department of Labor reported Thursday. Personal income from all sources was up 0.4% month-on-month. Both readings matched forecasts.

The core personal consumption expenditures (PCE) index – the Federal Reserve’s preferred measure of inflation – improved to 2% annually in July compared with 1.9% the previous month. The U.S. central bank targets inflation at 2% annually.

Initial jobless claims rose slightly less than expected last week and continued to hold near five-decade lows, underscoring the health of the labor market. The number of Americans filing for first-time unemployment benefits rose by 3,000 to a seasonally adjusted 213,000, the Labor Department said in its weekly report.

Labor economists will release the August nonfarm payrolls report next Friday.

Bitcoin Leads Cryptocurrencies Lower

Cryptocurrencies followed bitcoin’s lead on Thursday, as the total market capitalization fell $12 billion from its recent peak. On a 24-hour basis, digital assets were down $7 billion to $221 billion, according to CoinMarketCap.

All major assets in the top-ten by market cap traded lower, including bitcoin, which fell 2.8% to $6,834. The leading digital currency is now at risk of falling below the 200-day moving average, which could generate stronger corrective headwinds in the short term. At current levels, bitcoin accounts for 53.4% of the total crypto market cap.

Ethereum, XRP and bitcoin cash were each down at least 3.9% over 24 hours, based on latest available data.

Earlier in the day, Hacked reported that Yahoo Finance had enabled bitcoin, Ethereum and Litecoin trades directly on its platform, potentially opening the door to wider adoption among mainstream and institutional investors.

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.

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