US equity indexes

On February 28–March 7, US equity indexes had the following correlations with US crude oil April futures:

  • the S&P Mid-Cap 400 (IVOO): -60.6%
  • the S&P 500 (SPY): -77.3%
  • the Dow Jones Industrial Average (DIA): -89.1%

Analyzing Oil’s Rise and Equity Indexes

These three equity indexes have exposure of ~5.1%, ~5.9%, and 5.2% to the energy sector, respectively. The equity indexes fell 2.3%, 1.3%, and 1.7%, respectively, in the trailing week. US crude oil April futures fell 1% during this period. US crude oil prices ended in the red due to weakness last week.

Oil’s rise and equity indexes

The correlations indicate an inverse relationship between oil and these US equity indexes. In recent months, movements in the broader market dominated oil prices.

On February 28–March 7, the Energy Select Sector SPDR ETF (XLE) fell 0.2%—the least decline among the SPDR ETFs that break the broad market into subsectors. US equity indexes were in the red, which might have dragged XLE.

The Industrial Select Sector SPDR ETF (XLI) fell 2.5% and underperformed the SPDR ETFs in the last five trading sessions. During this period, the Communication Services Select Sector SPDR ETF (XLC) rose 0.6%—the outperformer among sector-based SPDR ETFs. Most of the SPDR ETFs ended in the red.

Next, we’ll discuss the important price levels for US crude oil next week.

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