Stock Market Rallies Last Week, Unfazed before Fed Meeting

All the component sectors of the SPDR S&P 500 ETF (SPY) took a surge on Wednesday, September 16, ahead of the Federal Reserves’ meeting that afternoon. The much-awaited meeting over an interest rate hike in the United States has been responsible for volatility across US stock markets for more than a month.

Despite split views on the probable decision about the rate hike for the first time in nearly a decade, US investors seem unfazed on September 16, the day of the meeting.

The above graph shows the movements of the SPDR S&P 500 ETF (SPY), the Energy Select Sector SPDR ETF (XLE), the Volatility S&P 500 Index (^VIX), the United States Oil ETF (USO), and the SPDR Gold Shares ETF (GLD).

We can see the rise in SPY for the second consecutive day when the volatility represented by the volatility index VIX fell 5.28%. Wednesday also saw a rise in the prices of gold and oil. They’re represented by their respective ETFs; namely, GLD and USO. The energy sector saw the greatest surge among its peer sector on September 16.

The energy sector rose 2.83%, the highest rise among all the sectors of SPY. Investors were upbeat due to the rise in oil prices the market has been experiencing since Tuesday, September 15. Crude oil inventories are expected to fall, leading to a further hike in oil prices. The rise in oil prices is certainly going to benefit companies in the energy sector.

Stocks of companies from the independent oil and gas industry such as Apache (APA), Consol Energy (CNX), Newfield Exploration (NFX), Noble (NE), and Marathon Oil (MRO) rose on September 16. The stocks returned 6.46%, 6.21%, 5.65%, 5.39%, and 4.92%, respectively, that day.

Now let’s look at the key players in the US stock market on September 16.