What Did the Stock Market Do Today? 3 Big Stories to Catch Up On.

Editor’s Note: This article was updated on May 19 to correct references to TPG Pace Beneficial. 

Meme coins, gas prices, SPAC stocks, oh my! Another busy day on Wall Street is wrapping up as investors eye a reopening world. So with all this in mind, what did the stock market do today?

Street sign for Wall Street pictured in front of several American flags representing american stocks

Source: Shutterstock

  • The S&P 500 closed lower by 0.85%
  • The Dow Jones Industrial Average closed lower by 0.78%
  • The Nasdaq Composite closed lower by 0.56%

So what all did the stock market do today? Here are some of the top stories.

What Did the Stock Market Do Today? Talk Crypto Bans.

Bitcoin (CCC:BTC-USD) and its peers have been in a tough spot, and that did not change today. In fact, investors gained something else to worry about following news that China is banning crypto… sort of.

According to a Reuters report, three industry groups announced some changes coming to the crypto scene in China. Financial institutions will no longer be able to provide any services relating to crypto transactions. Additionally, officials want consumers to hear a warning loud and clear. In other words, a huge part of the China crypto news is that the government thinks cryptos are dangerous for consumers, given price volatility.

Understandably, the news rocked investors. However, there is a bit more to the story.

As many crypto bulls pointed out, the China crypto news does not really reflect a new stance. The country has already banned foreign and domestic crypto exchanges as well as ICO platforms. This new guidance targets financial institutions instead of consumers. Additionally, bulls took to Twitter to highlight that consumers could keep their crypto holdings in China.

So what is the bottom line? The China crypto news may not be reason for panic, but it highlights the regulatory pressures in the space. Increased crypto scrutiny in the United States has similarly shaken investor confidence, as has talk of crypto bans in Turkey and India. With Bitcoin and altcoins continuing to grow in mainstream relevance, critics will be quick to point to these regulatory threats.

You can read more about China banning crypto here.

Analysts Are Betting on a Big Bull Run in Oil Prices

Oil prices are a prime example of the supply-demand imbalances at play in the market.

A gasoline shortage is top of mind right now, following the cyber attack on the Colonial Pipeline and the resulting panic buying. Plus, a truck driver shortage that is limiting deliveries to gas stations is also complicating supply. As a result, gas prices just hit their highest levels since October 2014.

In other words, consumers are starting to feel the pinch, but balance may not be coming anytime soon.

In fact, analysts are still bullish on oil, betting that demand will skyrocket even further. This comes as Covid-19 reopening moves front and center, with manufacturing activity rebounding. Consumers are ready to travel, heading to the pump for beach trips. Plus, airlines are reporting increased bookings and adding flights to their schedules. Add in easy monetary policy, and Wall Street sees the perfect recipe for further demand growth.

So what does this mean for investors? Over the summer, expect gasoline prices to remain elevated, and for consumers to feel the pinch. However, if you are betting on oil, analysts are on your side. Expect crude oil prices to rally even more — perhaps as far as $80 per barrel.

At the time of writing, Brent crude is sitting at $68.65.

TPGY Stock Highlights Recent SPAC Woes

Times are tough right now for special purpose acquisition companies. Moves by the U.S. Securities and Exchange Commission to review safe harbor protections and change warrant accounting requirements have hurt pre-merger companies. Post-merger companies have also not escaped these blows. Fisker (NYSE:FSR) confirmed it would be updating its books, and Canoo (NASDAQ:GOEV) now finds itself the subject of investigation.

Broadly, investors have become concerned with SPAC valuations and growth projections, and the current regulatory landscape is not helping.

Today, investors got a clear look at how tricky these SPAC transactions can be, even without external pressure. TPG Pace Beneficial (NYSE:TPGY) found itself falling, after its latest 8-K showed its proposed merger with EVBox was at risk.

Essentially, TPG Pace is planning to merge with electric vehicle charging firm EVBox. Investors have been expecting the deal to close sometime in June. However, the nature of this transaction is not so simple. Parent company Engie is actually carving out EVBox as part of its business, sending the firm public through what is known as a carve-out transaction. TPG Pace says that EVBox and Engie are struggling to get their accounting in order, which could force TPGY to delay its merger.

So what is the bottom line? TPGY says it has the opportunity to postpone the merger until September 2021. However, the bigger picture highlights the tricky spot SPAC stocks are in right now, and the uncertainty investors in these growth-oriented names face.

On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Sarah Smith is the Editor of Today’s Market with InvestorPlace.com. 

Article printed from InvestorPlace Media, https://investorplace.com/2021/05/what-did-the-stock-market-do-today-3-big-stories-china-banning-crypto-tpgy-stock/.

©2023 InvestorPlace Media, LLC