U.S. equities and stock exchange traded funds slipped Monday as the energy sector weakened after the Gulf Coast energy hub was inundated by Tropical Storm Harvey.
Dragging on the equities market, energy companies in the S&P 500 declined 0.8%.
Hurricane Harvey, the most powerful storm system to hit Texas in over half a century, caused flooding and paralyzed refined crude oil production. With the extensive damages putting a pause on normal refinery operations, the diminished demand from refiners has caused oil prices to fall – West Texas Intermediate crude oil was down 3.1% to $46.4 per barrel – and weighed on the broader energy sector.
“What it tells you is a slight risk-off trade. But nothing that is really shaking up the markets,” Matt Lloyd, chief investment strategist at Advisors Asset Management, told Reuters.