S&P 500 advances with oil prices dropping and the Fed into focus

• US Stock markets open with gains as the oil reversal gathers pace.
• Easing concerns about supply shortages and COVID-19 in China are weighing energy markets.
• All eyes are on the outcome of the Federal Reserve's meeting.

US stock markets have opened in a moderately positive tone on Tuesday, with oil prices pulling back for the second consecutive day and all eyes on the US Federal Reserve’s monetary policy meeting.

The S&P 500 Index advances 1.25%, while the Nasdaq Technological Index and the Dow Jones Industrial Index are 1.93% and 0.99% up respectively at the time of writing.

Oil prices dive from highs on easing supply concerns

Concerns about an oil supply shortage on the back of sanctions to Russia seem to be fading on hopes that Saudi Arabia and the United Arab Emirates would be ready to increase production.

Beyond that, the fast-spreading COVID-19 outbreak in China, which has already forced to impose lockdowns in some cities, is contributing to pulling oil prices lower. The benchmark US West Texas Intermediate has dropped nearly 30% from last week’s highs at $126 per barrel to levels below $93 so far.

On the other hand, investors are awaiting the conclusion of the two-day monetary policy meeting, starting today. The Fed is widely expected to be hiking interest rates for the first time in three years aiming to bring inflation under control.

Down to sectors, Consumer Discretionary stocks, 2.7% higher and Technology, 1,96% up are leading gains with only Energy and Materials in the red with 4.62% and 0.08% respective declines.

Technical levels to watch