Stocks Climb on Trade Optimism; Bitcoin Breaks $100K Amid Crypto Deal Buzz

Optimism about the trade deal triggered gains yesterday across major U.S. stock indices.
Crypto market sentiment improved as bitcoin surged and Coinbase announced a major acquisition.
Geopolitical risk in South Asia and trade negotiations with China may drive market volatility.

Markets finished yesterday on a positive note, lifted by renewed optimism that the ongoing trade war may be turning a corner. The S&P 500 closed up 0.6%, while the Nasdaq Composite gained 1.1%. Small-cap stocks led the advance, with the Russell 2000 jumping 1.9%. The Dow Jones Industrial Average also posted a 0.6% gain.

The increases indicate market sentiment improved following President Trump’s announcement that a trade deal framework had been reached with the United Kingdom. Although details were sparse and the US already runs a trade surplus with the UK, the announcement was seen as a potential catalyst for broader trade negotiations, especially with China.

Meanwhile, talks between US and Chinese officials are set to take place this weekend in Switzerland, and markets will be watching closely for signs of progress.

Evidence of how sensitive the market remains to trade developments came early yesterday, when a post from Trump suggesting tariffs on China could be reduced to 80% sent S&P 500 futures on a volatile ride, trading within a 40-point range. That’s especially notable considering the day’s total expected move was just under 40 points—highlighting how much influence trade rhetoric still carries.

Crypto action abounds

Bitcoin pushed back above $100,000, bringing renewed energy to crypto in general. Coinbase (COIN), despite missing earnings estimates, announced plans to acquire Deribit—the world’s largest bitcoin and ether options exchange—in a $2.9 billion deal. Shares of Coinbase were down 1.6% in premarket, though the acquisition, combined with the crypto rally, may signal a more favorable regulatory and investment environment under the current administration. Also noteworthy: shares of Strategy, a bitcoin proxy, hit new yearly highs, more than doubling from their March lows.

In geopolitical developments, tensions between India and Pakistan are escalating. Yesterday, India reported intercepting missiles and drones launched by Pakistan. With many global companies shifting manufacturing from China to India, the region’s stability is increasingly important to investors. Any conflict could present supply chain disruptions with global consequences.

End of the week

Heading into the weekend, markets remain focused on US–China trade talks and technical levels. The S&P 500 is approaching its 200-day moving average, a level not often surpassed on the first attempt. If no news emerges from the trade talks in Switzerland today, expect increased volatility.

Amid ongoing trade uncertainty, sticking to long-term investment plans remains essential.

JJ Kinahan is CEO of tastytrade from IG—which includes tastylive, tastyfx and tastycrypto. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan

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Stocks Climb on Trade Optimism; Bitcoin Breaks $100K Amid Crypto Deal Buzz