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Does the Energy Sector Impact the S&P 500?

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S&P 500’s performance 

The S&P 500 rose ~1.0% to 2,666.94 on April 26 due to the rise in technology, consumer discretionary, and energy stocks. Nine out of the ten major sectors in the S&P 500 rose on April 26.

The SPDR S&P 500 ETF (SPY) rose ~1.0% to $266.3 on April 26. SPY seeks to follow the S&P 500 Index’s performance.

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S&P 500’s sectoral performance 

The technology, consumer discretionary, and energy sectors rose 1.8%, 1.6%, and 1.5%, respectively, on April 26. These sectors supported SPY the most on April 26.

The energy sector accounts for ~6.2% of the S&P 500 Index. The Energy Select Sector SPDR ETF (XLE) rose ~1.5% to $74.61 on April 26. XLE represents the S&P 500 Index’s energy sector.

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 US crude oil futures rose 0.2% to $68.19 per barrel on April 26. Prices rose due to rising geopolitical tension and the expectation of an extension of ongoing supply cuts. The United States Oil ETF (USO) rose ~0.4% to $13.7 on April 26. USO aims to track active WTI crude oil futures’ performance.

May 2018 US natural gas futures contracts rose 1.3% to $2.81 per MMBtu (million British thermal units) on April 26—the highest settlement since February 2. These contracts expired on April 26. June US natural gas futures rose 1.1% to $2.83 per MMBtu on April 26. Prices rose due to the larger-than-expected withdrawal in US natural gas inventories on April 13–20. The EIA released the data on April 26. The United States Natural Gas ETF (UNG) rose 0.5% to $23.05 on April 26. UNG seeks to track active natural gas futures.

The iShares S&P GSCI Commodity-Indexed Trust (GSG) rose 0.4% to $17.4 on April 26. GSG seeks to track an index composed of a diversified group of commodities futures.

Series overview 

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

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