U.S. equities and stock exchange traded funds were little changed Tuesday as falling oil prices dragged on the energy sector.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were flat Tuesday.
Energy companies in the S&P 500 were among the worst performers Tuesday, falling off 1.0% as crude oil futures declined over 1% on concerns that the Organization of Petroleum Exporting Countries’ output cuts may not be enough to put a dent into the global supply glut that has depressed the market for three years.
Moreover, financial companies in the S&P 500 also weighed on markets as the sector dipped 0.5%.
“We’re in a period of time where the first-quarter data was slightly weak and people are wondering if the data was an anomaly or is there something more there,” Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management, told Reuters.
Many market observers are now trying to gauge economic data to prognosticate the future path of the markets as U.S. equities look expensive relative to historical averages, especially after many trimmed expectations for pro-growth policy changes out of the Trump administration.
“Right now, better economic data and earnings have given the Trump agenda the benefit of the doubt, but at some point, stocks will need that catalyst from fiscal stimulus and deregulation,” Michael Arone, chief investment strategist at State Street Global Advisors, told the Wall Street Journal.
Fed Bank of St. Louis President James Bullard, though, stated that the new administration will eventually need to fulfill the bullish expectations that have driven markets higher.
“Washington does have to deliver at some point,” Bullard told Bloomberg TV. “That is a concern going forward, whether the honeymoon period would end at some point and maybe the reality of American politics would settle in.”
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