After trading with indecision on Tuesday, the S&P 500 weakened and fell lower on Wednesday. Weakness in the energy, financials, and utility sectors weighed on the market.
Increased caution in markets
The markets are more cautious due to ongoing geopolitical tensions between the US and North Korea. Political uncertainty in European nations like France and the United Kingdom also decreased the risk appetite in the market. On the other hand, the market is also cautious amid a lack of clarity regarding President Trump’s pro-growth policies. Market participants are expecting strong 1Q17 earnings reports, which could help the market stay at higher levels.
Important market drivers
On Thursday, an important market driver was the fall in oil prices. The unexpected rise in gasoline inventory levels weighed on the energy sector. The S&P 500 reversed earlier gains and fell lower due to weakness in the energy sector. The S&P 500 Energy sector fell 1.4% on Wednesday. IBM (IBM), Marathon Oil (MRO), and Newfield Exploration (NFX) were the top three losers in the S&P 500 on April 19. IBM opened lower and closed the day at $161.69—a fall of 4.9% to the lowest levels since December 6. Marathon Oil and Newfield Exploration fell due to weakness in the energy sector on Wednesday.
The S&P 500 VIX Index (CBOE Volatility Index) measures uncertainty in the market. On April 19, it rose 3.5% to 14.93. It’s measured on a scale of 1–100 with 20 as the historical average. It’s also called the “fear index.” Generally, it moves opposite to stocks’ movements—it rises when the S&P 500 falls. The Dow Jones Industrial Average closed at 20,404.49—a fall of 0.58%. Unlike the S&P 500 and Dow Jones, the NASDAQ Composite Index closed positive on Wednesday. It rose 0.23% on April 19 and closed the day at 5,863.03.