3 Jul

S&P 500 and Crude Oil Prices Diverged on July 2

WRITTEN BY Gordon Kristopher

S&P 500’s performance 

The S&P 500 rose ~0.3% to 2,726.71 on July 2. The rise in technology stocks supported the S&P 500 on the same day. Eight out of the 11 key sectors in the S&P 500 advanced on the same day. However, escalating trade war tensions between the US and other leading economies limited the upside for the index.

The SPDR S&P 500 ETF (SPY) rose ~0.2% to $271.86 on July 2. SPY seeks to track the S&P 500 Index’s performance. E-Mini S&P 500 futures rose 0.07% from the previous settlement in early morning trade on July 3.

S&P 500 and Crude Oil Prices Diverged on July 2

S&P 500’s sectoral performance  

The technology, utilities, and communication services sectors rose ~0.9%, ~0.7%, and 0.6%, respectively, on July 2. These sectors supported SPY the most on the same day.

The energy sector, which accounts for ~6.3% of the S&P 500 Index, fell 1.5% on July 2. The energy sector was the top percentage loss on the same day. The Energy Select Sector SPDR ETF (XLE) fell 1.5% to $74.82. XLE represents the S&P 500 Index’s energy sector.

Commodities 

August WTI crude oil (USO) futures fell 0.28% to $73.94 per barrel on July 2. The prices fell due to the rise in crude oil production from Russia and Saudi Arabia. August WTI crude oil futures contracts rose 0.8% from the previous settlement in early morning trade on July 3. The prices could have risen due to the expectation of a decline in US crude oil inventories by ~3.3 MMbbls (million barrels) last week.

August US natural gas (UNG) futures fell 2.1% to $2.86 per million British thermal units on July 2—the lowest closing since May 21. The prices fell due to the expectations of weak demand for natural gas and record natural gas production. August US natural gas futures contracts fell 0.03% from the previous settlement in early morning trade on July 3.

The iShares S&P GSCI Commodity-Indexed Trust (GSG) fell 1.4% to $17.66 on July 2. GSG aims to track an index composed of a diversified group of commodities futures.

In this series  

In this series, we’ll discuss OPEC and Russia’s crude oil production. We’ll also discuss US crude oil production and some crude oil price forecasts.

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