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Decoding Drivers for the S&P 500 and Crude Oil

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Updated

S&P 500’s performance 

The S&P 500 rose ~0.91% to 2,846.07 on July 25—the highest closing since January 29. The US and the European Union agreed to work towards removing tariffs on industrial goods. President Trump also said that the US would work towards increasing its liquefied natural gas and soybean exports to Europe. The news supported the S&P 500 on July 25. All of the key sectors in the S&P 500 rose on July 25.

The SPDR S&P 500 ETF (SPY) rose ~0.85% to $284.01 on July 25. E-Mini S&P 500 futures fell 0.25% from the previous settlement in early morning trade on July 26.

S&P 500’s sectoral performance  

The industrials, healthcare, and technology sectors rose 1.52%, 1.28%, and 1.25%, respectively, on July 25. These sectors supported the S&P 500 the most on the same day.

The energy sector, which accounts for ~6.1 % of the S&P 500, rose 0.83% on July 25. The Energy Select Sector SPDR ETF (XLE) rose ~0.83% to $76.13 on July 25. XLE represents the S&P 500 Index’s energy sector.

Crude oil 

Brent oil (BNO) futures rose 0.7% to $73.93 per barrel on July 25. September WTI oil (USO) futures contracts rose 1.1% to $69.30 per barrel on July 25. Oil prices rose due to a larger-than-expected drop in US crude oil and gasoline inventories. Cushing inventories also dropped by 1.1 million barrels on July 13–20 for the tenth straight week. The prices also rose due to several other drivers. However, the bearish drivers could pressure oil prices. September WTI oil futures contracts rose ~0.1% from the previous settlement in early morning trade on July 26. On July 26, Saudi Arabia suspended crude oil exports through the Red Sea shipping lanes due to militant attacks on the two big oil tankers. 

In this series 

In this series, we’ll discuss crude oil’s bearish and bullish drivers.

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