Shares of energy companies fell sharply as traders braced for a hawkish statement from the Federal Reserve midweek.
Energy stocks have lagged the broad market somewhat in early 2023 after leading the 11 S&P 500 sectors last year, as hopes for a peak in inflation and interest rates fade.
Investors have forgotten the old stock-market adage ‘”don’t fight the Fed,” said Mike Wilson, strategist at brokerage Morgan Stanley, in a note to clients. Natural gas futures plunged to their lowest level since April 2021.
“In addition to the Fed, earnings and a jobs report, energy traders will pay close attention to an OPEC+ meeting that could see output remain steady,” said Edward Moya, senior market analyst at foreign-exchange brokerage Oanda Group.
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