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Commodities and the S&P 500 Are Feeling the Heat

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Dec. 4 2020, Updated 10:52 a.m. ET

S&P 500’s performance  

The S&P 500 fell ~0.5% to 2,693.13 on April 19, 2018, due to a decline in consumer staples and real estate stocks. Eight out of the ten major sectors in the S&P 500 fell on April 19, 2018.

The SPDR S&P 500 ETF (SPY) fell ~0.5% to $268.8 on April 19, 2018. SPY targets to follow the S&P 500 Index’s performance.

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S&P 500’s sectoral performance 

The consumer staples, real estate, and technology sectors fell 2.8%, 1.7%, and 1.1%, respectively, on April 19, 2018. These sectors pressured SPY the most on April 19, 2018.

The energy sector, which accounts for ~6% of the S&P 500 Index, rose 0.1% on April 19, 2018. The Energy Select Sector SPDR ETF (XLE) rose ~0.1% to $73.65 on April 19, 2018. XLE represents the S&P 500 Index’s energy sector. Integrated energy companies, Chevron (CVX) and ExxonMobil (XOM) account for ~40% of XLE’s holding. Chevron fell 0.01% to $123.7 on April 19, 2018, while ExxonMobil rose 0.3% to $79.4 on the same day. Chevron and ExxonMobil are scheduled to release their 1Q18 earnings results on April 27, 2018.

The sentiment in the commodities and equities markets can impact each other depending on the magnitude of the moves and various fundamental factors affecting each market.

Commodities 

June 2018 US crude oil futures fell 0.2% to $68.33 per barrel on April 19, 2018. Prices fell due to profit-booking. The United States Oil ETF (USO) fell ~0.8% to $13.7 on April 19, 2018. USO aims to track active WTI oil futures’ performance.

May 2018 US natural gas futures fell 2.9% to $2.66 per MMBtu (million British thermal units) on April 19, 2018—the lowest settlement since April 10, 2018. Prices fell due to warm weather forecasts. The United States Natural Gas ETF (UNG) fell 2.3% to $22.09 on April 19, 2018. UNG aims to track active natural gas futures.

The iShares S&P GSCI Commodity-Indexed Trust (GSG) fell 0.4% to $17.39 on April 19, 2018. GSG aims to track an index composed of a diversified group of commodities futures.

Series overview  

In this series, we’ll discuss US natural gas inventories, production and consumption, and natural gas price forecasts.

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