The stock and crypto markets exhibit diverging trends in light of potential trade talks between the US and China.
Trade Talk Outlook
Reports suggest that US and Chinese officials are set to begin talks this week to de-escalate trade tensions. US Treasury Secretary Scott Bessent is scheduled to meet Chinese Vice Premier He Lifeng during his visit to Switzerland from May 9 to 12. The main goal is to outline conditions for a potential settlement, marking the first in-person meeting since the tariff escalation began in March.
Stock Market Reaction
Bessent's comments about trade talks not being 'advanced' led to losses in the stock market. The S&P 500 fell over 2% within 24 hours to $5,604, while the Dow Jones dropped 2.2% and the Nasdaq declined by 1.5%. Experts worry that the market may face increased volatility due to unresolved tariff fears.
Implications for the Crypto Market
As stock prices declined amid uncertainty, the crypto market witnessed a price increase as investors turned to digital assets for hedging. Bitcoin's price surged by 1.9% to $96,264. Ethereum rose by 1.6% to $1,793, while other top altcoins, including XRP and SOL, increased by 0.5% and 1.3%, respectively. However, unchanged interest rates could negatively impact the crypto market.
Thus, the current market situation shows a divergence in trends: stock markets are under pressure from uncertainties in trade talks, while cryptocurrencies continue to attract attention as alternatives.
