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Crude Oil Futures and the S&P 500’s Price Action

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S&P 500’s performance  

The S&P 500 rose ~1.1% to 2,734.62 on June 1. The index rose due to better-than-expected US jobs data and easing geopolitical tensions between the US and North Korea. Eight of the ten key sectors in the S&P 500 rose on June 1.

The SPDR S&P 500 ETF (SPY) rose ~1% to $273.6 on June 1. SPY aims to track the performance of the S&P 500 Index.

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S&P 500’s sector-wise performance 

The technology, material, and financial sectors rose 1.7%, 1.5%, and 1.1%, respectively, on June 1. These sectors supported the S&P 500 the most.

The energy sector, which accounts for ~6.1% of the S&P 500, rose 0.5% on June 1. The Energy Select Sector SPDR ETF (XLE) rose ~0.5% to $76.38 on June 1. XLE represents the S&P 500 Index’s energy sector.

The equity and commodity market sentiments impact each other depending on the magnitude of moves and various fundamental factors affecting each market.

Commodities 

July WTI oil futures fell 1.8% to $65.81 per barrel on June 1—the lowest closing since April 10. Prices fell due to record US crude oil production and the strong US Dollar Index. Monthly US crude production hit a record high of 10.47 million barrels per day in March. The U.S. Energy Information Administration released the data on May 31. The United States Oil ETF (USO) follows active WTI oil futures’ performance. USO fell ~2.2% to $13.25 on June 1.

July US natural gas futures rose 0.3% to $2.96 per million British thermal units on June 1—the highest close since January 31. The prices rose due to the less-than-expected rise in natural gas inventories.

The United States Natural Gas ETF (UNG) follows active natural gas futures. UNG rose 0.6% to $24.03 on June 1.

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US Dollar Index

The US Dollar Index rose ~0.2% to $94.2 on June 1. The Power Shares DB US Dollar Bullish ETF (UUP) rose 0.2% to $24.8 on June 1. UUP aims to track the Deutsche Bank Long USD Currency Portfolio Index – Excess Return. The US Dollar Index and commodities, like crude oil and gold, are usually inversely related.

Series overview 

In this series, we’ll discuss US gasoline demand and Cushing oil inventories. We’ll also discuss the US crude oil rig count and some drivers for oil prices this week.

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