Why falling oil prices could actually drag the stock market down

Mark Hulbert

The S&P 500 does better when crude prices are higher

Last Updated: June 24, 2025 at 11:12 a.m. ET
First Published: June 24, 2025 at 7:35 a.m. ET

Be wary of predictions about how the U.S. stock market will respond to oil price fluctuations. A careful review of the historical record shows that the relationship between oil prices CL00 BRN00 and the S&P 500 SPX is extremely complex.

That’s because the correlation between crude oil and stocks has not been stable over time. For several decades prior to 2000, for example, that correlation was negative, as you can see in the chart below. During those decades, higher oil prices in a given month led to below-average stock-market returns in the subsequent month.