Is Oil Boosting Equity Indexes?

Between September 7 and 14, US equity indexes rose. Last week, the S&P 500 (SPY), the S&P Mid-Cap 400 (IVOO), and the Dow Jones Industrial Average (DIA) rose 1.2%, 1%, and 0.9%, respectively. Energy stocks form about 5.9%, 5.1%, and 5.2%, respectively, of these equity indexes.

Last week, US crude oil October futures rose 1.8%, while the Energy Select Sector SPDR ETF (XLE) rose 2%. XLE saw the highest rise among SPDR ETFs that break the broad market into subsectors. The rise in oil prices may have boosted these broad equity indexes, and could continue to do so. Last week, the Financial Select Sector SPDR ETF (XLF) fell 0.4%.

Last week, major energy subsector ETFs’ price metrics were as follows:

• The VanEck Vectors Oil Services ETF (OIH) rose 4.4%.
• The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 3.5%.
• The VanEck Vectors Oil Refiners ETF (CRAK) rose 2.3%.
• The Alerian MLP ETF (AMLP) rose 0.3%.

US crude oil prices’ rise may have boosted most of these energy ETFs last week.