The Dow Jones Industrial Average and S&P 500 indexes, which house most of the US energy stocks, rose as crude oil prices jumped more than 2% despite the Biden administration’s announcement that it will release 50 million barrels from the Strategic Petroleum Reserve to counter output cuts by producers in the OPEC+ alliance.
India and the United Kingdom followed up with announcements of a 5-million barrel and 1.5-million barrel release from their reserves, respectively, and China, South Korea and Japan are also expected to join the US plan.
“The coordinated SPR release was smaller-than-expected,” Ed Moya, analyst at online trading platform OANDA, said, explaining the rise in the Dow and S&P 500.
Moya also noted that technology stocks on the Nasdaq Composite index fell for a second day in a row on concerns about overvaluation of the Big Tech sector amid soaring US inflation that could force the Federal Reserve into a faster-than-anticipated rate hike.
“The Nasdaq is getting punished as investors scale down their mega-cap tech bets as margin worries grow and Treasury yields continue to rise” on inflation worries, Moya said.
At the close, the Dow was up 195 points, or 0.6%, at 35,814, while the S&P 500 closed up 8 points, or 0.2%, at 4,691.
Stocks of oil majors, particularly rallied, with Exxon up $1.62, or 2.6%, at $63.13 and Chevron rising $2.39, or 2.1%, at $116.30.
The Nasdaq Composite, which groups Big Tech names such as Facebook, Amazon, Apple, Netflix and Google, finished down 80 points, or 0.5%, at 15,775.