US Stock Market Overview – Stocks Drop Led by Energy, Utilities Buck the TrendTariffs weigh on riskier assets
US stocks moved lower on Wednesday as riskier assets sold off on Wednesday following news that the US is considering imposing new tariffs against the EU. US coronavirus infections are spreading throughout Florida, Texas and Arizona. All sectors were lower, led down by Energy, as crude oil tumbled following news that US production had increased in the latest week. Utilities were the best performing sector in a down tape. The VIX volatility index increased on Wednesday climbing back to the 33 handle. Gold prices hit a new 7-year high but failed to buoy metals and mining stocks.
Energy Shares Weigh on Major Average
Energy shares were the worst-performing sector in the S&P 500 index. A 6% decline in crude oil following the Energy Department release of their inventory report. The EIA reported that crude oil inventories increased by 1.4 million barrels from the previous week. Gasoline inventories decreased by 1.7 million barrels last week. Distillate fuel inventories increased by 249,000 barrels last week Total commercial petroleum inventories increased last week by 3.9 million barrels last week. Total demand over the last four-week period averaged 17.1 million barrels a day, down by 17.0% from the same period last year. Gasoline demand averaged 8.0 million barrels a day, down by 17.5% from the same period last year.
Tariff Rhetoric Weighs on Riskier Asset
The United States proposed tariffs are for approximately 3-billion in exports from France, Germany, Spain, and the UK which weighed on stock prices. It is related to the ongoing US-EU fight over aircraft subsidies. The WTO in the past has allowed the US to retaliate against a large illegal subsidy to European aircraft company Airbus.