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Swings in Oil Have Become the Biggest Threat to Stability in Stocks

  • Crude is largest input to stock volatility: Evercore ISI
  • Oil surges as much as 35% on expectations for production cuts
Russian Oil Drilling Platform As Specter Of $20 Oil Recedes

Photographer: Andrey Rudakov/Bloomberg

Fluctuations in oil always have a role in setting prices for equities. But among all the various market-derived influences that exist in the world right now, they’re the biggest.

Changes in crude explain more than a fifth of the S&P 500’s volatility, according to an analysis by Evercore ISI. That’s the most of any macro influence the firm tracks, including correlation between stocks, investor sentiment, and the shape of the yield curve.