S&P 500’s performance
The S&P 500 Index fell ~0.7% to 2,774.02 on July 11. On the same day, the US government threatened to impose new tariffs on goods worth $200 billion imported from China. The escalating trade war between the US and China pressured the S&P 500 the same day. China warned the US and said that it would take strict countermeasures. Ten out of the 11 key sectors in the S&P 500 dropped on July 11.
The SPDR S&P 500 ETF (SPY) fell ~0.7% to $276.86 on July 11. SPY targets to track the returns of the S&P 500 Index. The E-Mini S&P 500 futures rose 0.4% from the previous settlement in early morning trade on July 12.
S&P 500’s sectoral performance
The energy, materials, and industrials sectors fell 2.1%, 1.7%, and 1.6%, respectively, on July 11. These sectors pressured SPY the most on the same day.
The energy sector accounts for ~6.22 % of the S&P 500. The Energy Select Sector SPDR ETF (XLE) fell ~2.1% to $75.73 on July 11. XLE represents the S&P 500 Index’s energy sector.
Brent oil (BNO) futures fell 6.9% to $73.4 per barrel on July 11—the largest one-day percentage drop since February 2016. August WTI oil (USO) futures fell 5% to $70.38 per barrel on July 11. The rising trade war between the US and China could impact US crude oil exports and demand. The trade war pressured oil prices. China is the second-largest US crude oil importer. So far, China hasn’t imposed any tariffs on US crude oil imports.
National Oil Corporation is Libya’s state-owned oil company. On July 11, the company lifted the force majeure notice on eastern oil ports. Restarting key port terminals in Libya also pressured oil prices.
The EIA (U.S. Energy Information Administration) released the oil inventory data on July 11. August WTI oil futures contracts rose 0.71% from the previous settlement in early morning trade on July 12.
August US natural gas (UNG) futures rose 1.5% to $2.83 per MMBtu (million British thermal units) on July 11. Prices rose due to the expectation of easing US natural gas production and short-covering. August US natural gas futures contracts fell 0.11% from the previous settlement in early morning trade on July 12.
The EIA is scheduled to release its natural gas storage data on July 12. A Reuters survey estimates that US natural gas inventories could have risen by 56 Bcf (billion cubic feet) on June 29–July 6. A larger-than-expected rise in natural gas inventories could weigh on natural gas prices.
In this series
In this series, we’ll discuss crude oil’s bearish and bullish drivers.