Oil Price vs S&P 500
WTI crude closed at $95.85 on April 23, 2026; SPY traded near $708 the same week. Year-to-date 2026, WTI gained approximately 31 percent (from $73 in early February to $95.85) on the Iran war oil shock, while SPY gained approximately 4 percent.
Also known as: WTI Crude Oil (WTI_AV, crude oil, OIL, WTI live) · S&P 500 ETF (SPY) (ETF_SPY, S&P 500, SPX, SP500)
Why This Comparison Matters
WTI crude closed at $95.85 on April 23, 2026; SPY traded near $708 the same week. Year-to-date 2026, WTI gained approximately 31 percent (from $73 in early February to $95.85) on the Iran war oil shock, while SPY gained approximately 4 percent. The relationship between oil and equities is regime-dependent and not consistently directional. Demand-driven oil rallies (strong global growth) typically support equities. Supply-driven oil shocks (OPEC cuts, geopolitical disruption) act as taxes on the economy and pressure equities. Falling oil can signal demand destruction (bearish equities) or oversupply (mixed). The April 2026 setup combines Iran war supply shock with broader Fed-cut-anticipation risk-on rotation, producing oil and equities both elevated but with oil leading.
The April 2026 Configuration
WTI $95.85 (April 23, 2026), SPY $708 (April 2026). The WTI/SPY ratio is approximately 0.135 (WTI per SPY share). The 12-month range is approximately 0.10 to 0.15. The 5-year range is 0.05 to 0.18 (2022 oil spike to $124 with SPY ~$420 produced ratio ~0.30). Above 0.16 indicates oil-tax pressure on equities; below 0.10 indicates demand weakness.
WTI year-to-date 2026 gained 31 percent from $73 February low to $95.85 April. SPY gained 4 percent year-to-date. Iran war drove most of the WTI gain (Feb 2026 escalation lifting WTI from $73 to $105+ peak, retraced to $95.85 on ceasefire optimism).
Despite the supply shock, SPY held up well through the Iran war. The combination of Fed cut expectations (consensus 2-3 cuts in 2026) plus AI capex narrative plus partial Iran ceasefire confirmation produced equity resilience. The pair captures the unusual setup: oil up materially without equity stress, indicating broader macro factors offsetting the oil-tax effect.
Why the Oil-Equity Relationship Varies
Three distinct mechanisms drive oil-equity relationships across regimes. First, demand-driven mechanism: when oil rises on strong global growth, equities rise too. Both reflect the same underlying growth strength. 2003-2007 commodity supercycle saw oil rally from $30 to $147 with S&P 500 also rising from 800 to 1,500 (positive correlation).
Second, supply-shock mechanism: when oil rises on supply disruption (OPEC embargo 1973, Iran revolution 1979, Iraq invasion of Kuwait 1990, Iran war 2026), oil acts as economic tax. Each $10 oil rise reduces consumer discretionary spending capacity by approximately $50 billion annually in the US. Equities typically compress under sustained supply-shock oil rallies above $100.
Third, demand-collapse mechanism: when oil falls on demand collapse (2008-09 GFC, 2014-2016 commodity bust, 2020 COVID), both oil and equities fall together. The shared driver is recession. The 2020 COVID episode saw WTI briefly negative and SPY -34 percent simultaneously.
Historical Oil-Equity Correlation
60-day rolling correlation between WTI and SPY varies dramatically. Long-run average is approximately 0.30 (modestly positive). Three regime patterns.
Demand-driven regime (2003-2007): correlation 0.50-0.70 (both rallying on global growth). Supply-shock regime (1973-1974, 1990, 2022 Russia-Ukraine, 2026 Iran war): correlation -0.20 to -0.40 (oil up, equities down). Risk-off regime (2008-09 GFC, 2020 COVID): correlation 0.50-0.70 (both falling together on recession).
Conditional Forward Response (Tail Events)
How S&P 500 ETF (SPY) has historically behaved in the 5 sessions following a top-decile or bottom-decile daily move in WTI Crude Oil. Computed from 1,289 aligned daily observations ending .
Following these triggers, S&P 500 ETF (SPY) falls 0.20% on average over the next 5 sessions, versus an unconditional baseline of +0.24%. 128 qualifying events; S&P 500 ETF (SPY) closed positive in 48% of them.
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Frequently Asked Questions
What are current WTI and SPY levels?+
WTI $95.85 on April 23, 2026; SPY $708 in April 2026. WTI/SPY ratio approximately 0.135 (12-month range 0.10-0.15, 5-year range 0.05-0.18). WTI year-to-date 2026 gained ~31% from $73 February low to $95.85 on Iran war shock. SPY gained ~4% YTD. 60-day correlation ~0.10 (essentially uncorrelated). Iran war drove most of WTI gain (Feb 2026 escalation lifting from $73 to $105+ peak, retraced on ceasefire optimism). Despite supply shock, SPY held up well due to Fed cut expectations, energy-sector gains, and mega-cap tech resilience.
Why does oil-equity relationship vary by regime?+
Three mechanisms. First, demand-driven (2003-2007 commodity supercycle): oil and equities both rise on global growth. Correlation 0.50-0.70. Second, supply-shock (1973-74, 1990, 2022 Russia-Ukraine, 2026 Iran): oil acts as economic tax. Each $10 oil rise reduces consumer discretionary spending by ~$50 billion annually US. Equities compress under sustained supply-shock above $100. Correlation -0.20 to -0.40. Third, demand-collapse (2008-09, 2014-2016, 2020 COVID): both fall together on recession. Correlation 0.50-0.70 positive. The current April 2026 ~0.10 reflects mixed dynamics with Fed cuts offsetting Iran supply-shock effects.
How did Iran war affect the pair?+
Most direct supply-shock test in 20+ years. WTI rose from $73 (early Feb) to $105+ peak (late Feb), 44% in 30 days. SPY initially fell 5% on Iran escalation, then recovered to flat-to-up by late Feb as Fed cut expectations strengthened. SPY held up better than typical supply-shock because: energy sector +18-25% offsetting compression, Fed cut acceleration supporting multiples, mega-cap tech (~30% of SPY) minimal oil-cost exposure. Through April ceasefire: WTI -10% from peak, SPY recovered fully and beyond. Demonstrated SPY resilience to supply shocks but with significant sector dispersion.
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