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S&P 500 and Crude Oil Fell in the Same Direction

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Updated

S&P 500’s performance 

The S&P 500 fell ~0.03% to 2,671.92 on May 8 due to a decline in the utility sector. Six out of the ten key sectors in the S&P 500 dropped on May 8.

The SPDR S&P 500 ETF (SPY) was flat at $266.9 on May 8. SPY aims to track the performance of the S&P 500 Index.

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S&P 500’s sectoral performance 

The utilities, health care, and real estate sectors fell 2.5%, 0.8%, and 0.7%, respectively, on May 8. These sectors pressured SPY the most on May 8.

The energy sector accounts for ~6.2% of the S&P 500 Index. The energy sector rose ~0.8% on May 8, which limited the downside for the S&P 500. The Energy Select Sector SPDR ETF (XLE) rose ~0.8% to $74.54 on May 8. XLE represents the S&P 500 Index’s energy sector.

The sentiment in the equity and commodity markets could impact each other depending on the magnitude of the moves and various fundamental factors affecting each market.

Commodities 

June WTI oil futures contracts fell 2.4% to $69.06 per barrel on May 8. Prices fell due to profit-booking and the strong US Dollar Index. However, President Trump’s announcement about imposing new sanctions on Iran limited the downside for oil prices. The United States Oil ETF (USO) fell 0.3% to $14.06 on May 8. USO aims to track active WTI oil futures’ performance.

June US natural gas futures fell 0.3% to $2.73 per MMBtu (million British thermal units) on May 8. Prices fell due to rising production and mild weather forecasts. The United States Natural Gas ETF (UNG) rose 0.1% to $22.33 on May 8. UNG seeks to follow active natural gas futures’ performance.

The iShares S&P GSCI Commodity-Indexed Trust (GSG) rose 0.3% to $17.7 on May 8. GSG seeks to track an index composed of a diversified group of commodities futures.

Series overview  

In this series, we’ll discuss Iran’s crude oil production and the API’s US crude oil and gasoline inventories. We’ll also discuss the US Dollar Index and some crude oil price forecasts.

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