Yahoo Finance Energy-Related SPDR Indexes Rally as Crude Inventory Falls
Global Markets Ride on Crude Rally, Macro Data
US markets trade positively as crude prices strengthen
US markets were trading on a higher note on Wednesday, May 25, 2016, as crude prices continued to rise following a sharper-than-expected decline in inventory figures. A fall in crude inventories indicates higher demand for crude prices, which led to a rally in oil futures yesterday.
Crude oil inventory fell by 4.2 million barrels in the week ended May 20, 2016, in comparison to expectations of a decline of 2.5 million barrels. This gave way to the lowest fall since April.
At 2:00 PM ET on May 25, the S&P 500 VIX Index had dropped by 4.5% while the S&P 500 Futures Index had risen by 0.82%. The NASDAQ Futures Index rose by 0.84%, and the Dow Jones Industrial Average rose by 0.92%.
Markets gear up for potential Fed rate hike in June
Meanwhile, speculations of a hike in the Federal Reserve rates increased for the upcoming FOMC meeting in June. Hawkish comments by Fed policymakers have been driving losses in safe-haven assets. Gold prices continued to drop on May 25, and the SPDR Gold Shares ETF (GLD) fell by 0.35% at 1:30 PM ET.
May’s flash services PMI (purchasing managers’ index) was released at 51.2, lower than April’s reading of 52.8. It was the lowest reading in the last three months.
Impact on ETFs across sector SPDR indexes
That being said, the majority of the SPDR ETFs were trading positively as of 1:30 PM ET on May 25, following the rise in crude and commodity prices. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose by 2.7%. The Energy Select Sector SPDR ETF (XLE) rose by 1.5%.
The SPDR S&P Metals & Mining ETF (XME) and the SPDR S&P Biotech ETF (XBI) rose by 4.0% and 1.8%, respectively, while the Financial Select Sector SPDR ETF (XLF) rose by 1.2%.
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